Berkshire lines up banks for its first yen bond deal since April

What happened

Berkshire Hathaway has tapped Mizuho Securities and BofA Securities to arrange a possible benchmark yen bond deal, with timing guided by market conditions. The company has been tapping the yen market roughly twice a year, and it is preparing to raise more funds in Japan.

The backdrop

This would be Berkshire's second yen transaction since Warren Buffett relinquished the chief executive role. The return comes as Japanese companies have cooled domestic bond issuance after a heavy burst of supply in October pushed the extra yield on corporate paper above government bonds wider.

The last deal and what to watch

In April, Berkshire sold six slices spanning three to 30 years, raising ¥272.3 billion ($1.7 billion). That sale ranked among its biggest in yen, trailing only its 2019 debut and its October 2024 issuance. Investors will zero in on the premium Berkshire offers and how much demand the book builds.

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What it means for your portfolio

"Berkshire has name recognition in Japan because of its investments in Japanese stocks," said Takashi Fujiwara, the lead fund manager at Resona Asset Management Co.'s fixed-income unit. "There should be demand for the bonds depending on the spread." In plain English: pricing and investor appetite will set the tone for how Berkshire's next yen raise clears and where high grade yen credit spreads settle.

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