Malaysia willing to consider issuing another samurai bond

PUTRAJAYA: Malaysia is willing to consider issuing another Samurai bond if it can obtain rates similar to the 0.63 per cent per annum achieved in the earlier issuance of the 200 billion yen (approximately RM7.3 billion) last week, says Finance Minister Lim Guan Eng.

“If the Japan Bank for International Cooperation (JBIC) is willing to give a similar low rate, we will definitely consider it very seriously,” he told reporters after the commemoration on the successful completion of the Samurai bond issuance here today.

Lim said strong interest from Japanese investors had enabled the samurai bond to be competitively priced at a full cost of 0.63 per cent per annum, lower than the initial projection of 0.65 per cent.

“This is a testament to confidence of Japanese investors in the Malaysian economy and the government's fiscal reforms,” he said.

Lim said the government was firmly committed to fiscal sustainability in order to strengthen Malaysia's economic resilience and achieve sustainable, as well as equitable growth.

He said proceeds from the Samurai Bond issuance would provide a breathing space for the government to honour its debt obligations.

“The proceeds will be used to finance infrastructure development and not for debt repayment. This will free up the government revenue sources that can be used to pay its debts,” he said.

Japanese Ambassador to Malaysia Makio Miyagawa said Japan is willing to provide the assistance should Malaysia decide to issue another Samurai Bond in the future.

“Japan is ready to assist Malaysia to issue other bond with similar terms,” he said.

Miyagawa said the assistance with the bond issuance would hopefully help Malaysia reduce its debt obligations and grow its economy.

“The Malaysian government is now moving towards the right direction in reducing debts and cleaning up all the dust. For this purpose, we are very happy to help Malaysia,” he said.

A samurai bond is a yen-denominated bond issued in Tokyo and subject to Japanese regulations.  The government has successfully issued its Samurai Bond last week with an oversubscription of more than 1.6 times at 324.7 billion yen against 200 billion yen offered.

The bond was guaranteed by JBIC with a maturity tenure of 10 years with a full cost to the government at 0.63 per cent per annum.

Proceeds from the bond issuance would be used to fund infrastructure developments, including the construction of schools, hospitals, roads and utilities. - Bernama