Nippon Steel Corp. ’s record-breaking convertible bond offering is highlighting the quest of Japanese companies for cheaper funding than increasingly expensive traditional debt, which sets the stage for more such deals. Japan’s largest steelmaker on Tuesday raised 600 billion yen ($3.9 billion) from an offering of bonds that can be converted into stock, more than it initially planned on the back o...
Nippon Steel Corp. ’s record-breaking convertible bond offering is highlighting the quest of Japanese companies for cheaper funding than increasingly expensive traditional debt, which sets the stage for more such deals. Japan’s largest steelmaker on Tuesday raised 600 billion yen ($3.9 billion) from an offering of bonds that can be converted into stock, more than it initially planned on the back of strong demand. The proceeds will help repay loans taken out for its acquisition of United States Steel Corp. The prospects of a surge in fiscal spending and central bank rate hikes have raised the cost of traditional debt instruments in Japan. The yield on the 10-year government bond hit its highest in almost 30 years in January, and shares have rallied after Prime Minister Sanae Takaichi ’s historic election victory following a campaign in which she promised budget expansion. “It’s not a deal you see every day,” said Bloomberg Intelligence analyst Takeshi Kitaura . More convertible bond deals could be on the way in Japan if more large buyouts were to occur, he said. Read More: Japan Bond Blowout Funnels Corporate Borrowers to Convertibles Investors bid for multiple times Nippon Steel’s deal size, with more than 130 entities expressing interest in each of the offering’s two tranches, according to people familiar with the matter. The top 10 entities took more than 50% of allocations in each tranche — one maturing in 2029 and the other in 2031, the people said, asking not to be named to discuss a private matter. With Nippon Steel’s deal, Japanese companies have raised more than $4 billion so far in 2026 from bonds that can be converted into stock, eclipsing all of last year’s proceeds, according to data compiled by Bloomberg. In 2025, Nissan Motor Co. raised 200 billion yen from the sale of convertible bonds, as part of a broader effort to revamp the carmaker and in the face of a huge loan repayment. The potential wave of issuance by Japanese companies would also raise the ...