Berkshire Hathaway Inc. sold ¥90 billion ($628 million) of bonds on Friday in its smallest yen deal ever in a market rocked by an escalating trade war.
All six tranches in the offering by Warren Buffett’s firm, ranging from three years to 30 years, offered higher premiums than the previous yen note sale in October. Three-year notes, the biggest part of the offering today, had a spread of 70 basis points compared with 49 basis points in the prior sale.
“Generally speaking, even if an issuer paid the maximum spread that it can offer, investors may not be able to buy in the current market condition,” said Shunsuke Oshida, head of credit research at Manulife Investment Management Japan. “Although they want to increase their exposure, they would want to wait for the market to calm down.”
The following table shows the increase in yield premiums for comparable tenor bonds today versus the previous yen offering in October:
Berkshire pushed ahead with the yen deal even as market volatility prompted several Japanese companies including Suntory Holdings Ltd. and Nissin Foods Holdings Co. to cancel sales. Buffett has been tapping the Japanese corporate bond market since 2019, and his yen fundraising has been closely watched by investors because his purchases of shares including trading firms have bolstered optimism in the past toward the nation’s equity market.
