Issuance of subordinated bonds by Japanese companies is recovering, and reports indicate that investment appetite is also aligning with the market as M&A and refinancing demand increase.
Issuance of subordinated bonds by Japanese companies is showing signs of recovery, with the instruments once again gaining prominence as a financing option. Some observers say more companies are using subordinated bonds to optimize their capital structures and secure funding for growth.
There is a view that rising financing needs related to M&A are contributing to activity in the subordinated bond market, with companies considering acquisitions and integrations reportedly examining subordinated bonds as a financing option.
Refinancing demand is also cited as a factor supporting subordinated bond issuance, and reports indicate that new issuance is increasing as companies respond to changes in the interest-rate environment and seek to optimize their cost of capital.
Across the market, some observers say investment appetite is aligned with developments in the subordinated bond market. The situation, in which investors’ demand for investment and companies’ financing needs complement each other, is attracting attention.