Buffett’s Berkshire Hathaway Plans Return to Yen Bond Market

(Bloomberg) -- Warren Buffett’s Berkshire Hathaway Inc. is planning a potential return to the yen bond market, just as a drop in the Japanese currency versus the greenback makes investments in the nation’s companies more attractive.    

The U.S. company has mandated banks for a potential benchmark yen-denominated bond offering, according to a person familiar with the matter, who is not authorized to speak publicly and asked not to be identified. The deal may come in the near future, subject to market conditions.

The timing may be opportune. The yen fell to its lowest against the dollar in five years this week and analysts are forecasting more losses as Japan’s dovish monetary policy diverges from its hawkish peers including the Federal Reserve.

Like many investors in a world of low yields, Berkshire has struggled to find high-returning assets. It priced one of the biggest yen bond offerings ever by an overseas firm in 2019, and surprised markets the following year when it announced it had built up stakes of about 5% in Japan’s biggest trading companies.  

The conglomerate sold 160 billion yen ($1.38 billion) of notes with a three-tranche deal in April, and a debt offering in 2022 would be its fourth straight foray into the yen bond market.

Berkshire Hathaway’s cash pile hit new heights at $149.2 billion in the third quarter, surpassing a record set in early 2020, the company said in November.

Berkshire Hathaway has higher ratings than the Japanese sovereign from overseas rating companies and its yen bonds have offered local investors a rare opportunity to pick-up highly rated paper with juicier spreads than on domestic issuer debt. 

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