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September 24, 2017

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Nomura sells US$325 mil. in accrual bonds

Nomura Bank International announced on Thursday it has issued US$325 million in 30-year accrual bonds in Taiwan, marking the first bond issued by a Japanese institution on the island in years.

The bond was listed on the GreTai Securities Market (櫃檯買賣中心) in Taiwan this past Tuesday and offered to institutional investors in Taiwan, according to CNA. The bonds' guarantor is Nomura Holdings Inc.(野村控股), the bank's parent company, with SinoPac Securities (永豐金證券) being the lead financial advisor and E. Sun Bank (玉山商業銀行) and KGI Securities Co. (凱基證券) associate financial advisors.

CNA reported that Standard & Poor's has assigned the issuer a long-term rating of A-.

The 30-year bonds, which will mature in 2044, were issued at par and bear an internal rate of return of 4.95 percent a year, Nomura said in a statement. Even so, investors are allowed to redeem bond funds once per year.

"This bond issuance is a first not just for Nomura, but also for a Japanese financial institution issuing an onshore bond in Taiwan in recent years," said Amy Tsao (曹慧姝), president of Nomura in Taiwan.

An accrual bond is a debt security that doesn't pay interest but is traded at a deep discount, rendering profit at maturity when the bond is redeemed for its full face value. It is also known as a "zero coupon bond."

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