On Friday (April 11th), Berkshire Hathaway, owned by Warren Buffett, the "stock god", has priced a total of 90 billion yen (approximately $626.7 million) worth of six yen denominated bonds.
At the time when Buffett's company is selling yen bonds, US President Donald Trump's threat to impose tariffs is triggering a global trade conflict and causing turbulence in global financial markets. This has led to a comprehensive increase in financing costs and a shortage of long-term bond supply.
Due to market turbulence, while many Japanese companies have put their bond issuance plans on hold, Berkshire Hathaway still chooses to issue bonds.
However, this is the smallest Japanese yen denominated bond issued by Buffett's corporate group, with six maturities ranging from 3 to 30 years. The yield premium of all bonds is higher than Berkshire Hathaway's issuance level in October last year, with 3-year bonds accounting for the largest share, with a yield premium of 70 basis points, far higher than the previous 49 basis points.
The current attitude of investors towards Berkshire Hathaway's issuance of Japanese bonds is that even if the interest rates are high, I still want to wait for the market to stabilize before making decisions.
Shunsuke Oshida, head of credit research at Manulife Investment Management Japan, pointed out that "generally speaking, even if issuers are willing to offer the highest premium allowed by the market, investors may not necessarily buy it in the current market environment. Although they hope to increase their exposure, they are more willing to wait for the market to stabilize before making a move
However, this bond issuance still receives high attention from investors, as the funds raised by Berkshire Hathaway may be used to increase its holdings in Japanese companies.
Last month, Berkshire Hathaway increased its holdings in five major Japanese trading companies, including Mitsubishi Corporation and Itochu Corporation. In February, the company hinted at plans to increase its holdings of Japanese shares in its annual letter to shareholders.
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