Total corporate bond issuance in FY 2008 second largest on record+

TOKYO, March 20 Kyodo -
Total corporate bond issuance in fiscal 2008 is set to top 9.5 trillion yen,
marking the second-largest level on record after 10.55 trillion yen in fiscal
1998, according to a study by Mizuho Securities Co. made available Friday.
Major companies with high levels of creditworthiness have been scrambling to
float bonds and raise funds prior to the March 31 end of fiscal 2008 against
the backdrop of the global economic slowdown which has undercut their
performance, researchers at the brokerage house said.
Companies with low credit ratings have been facing even greater difficulties in
floating bonds, leading to bipolarization in the bond market, they said.
Corporate bond issuance in fiscal 2009 starting April 1 is expected to total
around 6 trillion yen, the study showed.
The number of monthly bond issues plunged temporarily after the collapse of
Lehman Brothers Holdings Inc. shook global financial markets.
But the Japanese bond market has witnessed a series of large-scale issues since
the start of 2009, including bond issues of 200 billion yen by Toyota Motor
Corp. and 400 billion yen by Panasonic Corp.
Major home electronics manufacturers such as Sharp Corp. and Ricoh Co., which
have traditionally maintained ample liquidity, have also been forced to enter
the bond market to raise funds.
Companies are due to redeem 6.3 trillion yen worth of bonds during fiscal 2009.
Of the total, companies with credit ratings of single A or lower are expected
to redeem 3.5 trillion yen worth.
Firms with lower ratings are likely to face difficulties in floating bonds
during the business year and could be left with no alternative but to apply for
bank loans, the researchers said.
Yasunobu Katsuki, chief credit analyst at Mizuho Securities, said, ''The
situation in the bond market is likely to remain severe until the latter half
of fiscal 2009.''
==Kyodo