Two of America’s best-known companies borrowed in yen in Tokyo on Friday, and the price of admission went up. Berkshire Hathaway Inc. sold 182.3 billion yen, about $1.1 billion, of bonds in Tokyo, paying wider spreads on several maturities than it did in April. IBM Corp. finalized terms on about 108.8 billion yen, roughly $680 million, in its first yen deal in about a decade.
Berkshire scales back
Berkshire, which hired banks for the sale earlier this week, split the deal into five tranches of three, five, seven, 10 and 30 years. The three-year notes were the biggest piece at 92 billion yen with a 2.624% coupon. The five-year notes, 57.3 billion yen, priced at 75 basis points over yen swap rates with a 3.007% coupon, at the wide end of the 70-to-75 point guidance. The 10-year came at 90 basis points and 3.661%, and the 30-year at 105 basis points and 4.571%, inside the roughly 110 points first floated.
In April, Berkshire sold 272.3 billion yen with spreads of 70, 90 and 100 basis points on the five-, 10- and 30-year notes. This time it dropped the 15- and 20-year maturities it had considered and raised about a third less. The bonds settle Nov. 19 and are expected to carry Aa2 and AA ratings. It is Berkshire’s second yen deal since Warren Buffett handed the chief executive job to Greg Abel, and the conglomerate has historically used yen debt to fund its stakes in Japanese trading houses.
IBM returns to Tokyo
IBM marketed up to seven maturities from three to 30 years, with initial spreads ranging from about 70 to 80 basis points over Japanese government bonds for three-year notes to about 155 basis points over swaps for 30-year debt. Mizuho, MUFG and SMBC Nikko led the deal. A full breakdown of final tranche sizes wasn’t immediately available.
Alphabet finishes bigger than planned
Alphabet Inc. wrapped up its first Hong Kong and Singapore dollar bonds at about $3.8 billion, up from a target of about $3 billion, after drawing more than $7 billion of orders. The Hong Kong portion totaled HK$16 billion: HK$7.5 billion of two-year notes at 4.35%, HK$7 billion of five-year notes at 4.70% and HK$1.5 billion of 10-year notes at 5.20%. In Singapore it sold S$2.28 billion across four tranches, from S$370 million of two-year notes at 2.50% to S$680 million of 30-year notes at 3.80%. The notes settle Nov. 19.
The three deals show U.S. borrowers shopping for investors well beyond the dollar market as AI spending and refinancing needs swell. They also show those investors have room to be choosy: strong names are still getting deals done, but not always at the spreads they paid earlier in the year.
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