Author Topic: Samurai bonds  (Read 3055 times)

adroth

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Samurai bonds
« on: September 30, 2018, 07:03:54 AM »


What is a 'Samurai Bond'

A samurai bond is a yen-denominated bond issued in Tokyo by a non-Japanese company and subject to Japanese regulations. Other types of yen-denominated bonds are Euroyens issued in countries other than Japan, typically in London.

A company may choose to enter a foreign market if it believes that it would get attractive interest rates in this market or if it has need for the foreign currency. When a company decides to tap into a foreign market, it can do so by issuing foreign bonds, which are bonds denominated in the currency of the intended market. Simply put, a foreign bond is issued in a domestic market by a foreign issuer in the currency of the domestic country. Foreign bonds are mainly used to provide corporate or sovereign issuers with access to another capital market outside their domestic market to raise capital.

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Samurai bonds are denominated in Japanese yen. Thus, Samurai bonds give a company or government an opportunity to expand into the Japanese market without the currency risks normally associated with a foreign investment since the bonds are issued in yen. The bonds are subject to Japanese bond regulations, attracting investors from Japan and providing capital to foreign issuers. Since investor bear no currency risk from holding these bonds, Samurai bonds are an attractive investment security for Japanese investors.

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« Last Edit: September 30, 2018, 07:20:41 AM by adroth »

adroth

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Re: Samurai bonds
« Reply #1 on: September 30, 2018, 07:05:33 AM »
Gov’t debt hits new high of P7.1T
By: Ben O. de Vera - Reporter / @bendeveraINQ Philippine Daily Inquirer / 05:16 AM September 29, 2018

The sale of yen-denominated samurai bonds in August further raised the government’s outstanding debt to a new high of P7.104 trillion.

The latest Bureau of the Treasury data showed that the government’s outstanding liabilities as of August rose by 0.9 percent from P7.044 trillion as of end-July and by 10.5 percent from P6.432 trillion in the same eight-month period last year.

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This ended the eight-year absence of the Philippines in the samurai bond market, as the last issuance was in 2010.

Finance Secretary Carlos G. Dominguez III had said they wanted to tap the samurai market at least every two years.

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As of end-August, domestic liabilities grew 10.1 percent year-on-year.

During this week’s Philippine Economic Briefing in London, Budget Secretary Benjamin E. Diokno noted that “the rule of thumb is that a country with a debt-to-GDP [gross domestic product] ratio below 60 percent is fiscally sound.”

“The Philippines is comfortably below that,” Diokno added, citing that the general government debt-to-GDP at end-2017 was 36.6 percent.

“Those who say we are walking into a debt trap ought to look more closely at the actual terms of the loan contracts we sign. The economic buildup is supported by a sound financing strategy. Our financing mix continues to be inclined toward the domestic market to avoid vulnerability from external markets,” Dominguez, for his part, said.



Read more: https://business.inquirer.net/258117/govt-debt-hits-new-high-p7-1t#ixzz5SXE03SR9
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