Malaysia to issue Samurai Bond by March next year

Finance Minister Lim Guan Eng tabling the Budget 2019 in Parliament on Friday, Nov 2, 2018. - Bernama

PETALING JAYA: The Japanese Government has offered to guarantee 200bil yen or RM7.4bil of Samurai bond issuance with 10-year tenure, which is expected to be issued before March next year, says Finance Minister Lim Guan Eng. 

“The confidence in the Prime Minister and in Malaysia cannot be better expressed than the offer by the Japanese Government to guarantee 200 billion yen of 10-year Samurai bonds, or approximately RM7.4bil, via Japan Bank of International Cooperation at an indicative coupon of 0.65%,” he said in his Budget 2019 speech at Parliament on Friday (Nov 2). 

“This 200bil Samurai Bond will be issued before March 2019,” he said. 

“We wish to record our appreciation to the Japanese government for guaranteeing the 200bil yen samurai bond,” he added.

Despite facing fiscal challenges, Lim said the financial sector remains healthy and monetary sector is stable. 
“Sustainable economic growth must be maintained to improve economic well-being, and the higher revenues generated will also help to address our public finances,” he said. 

A samurai bond is a yen-denominated bond issued in Tokyo by a non-Japanese company or entity and subject to Japanese regulations.

A foreign issuer that wants access to the Japanese debt market would issue a bond referred to as a Samurai bond. 

Samurai bonds give issuers the ability to access investment capital available in Japan, according to finance education website Investopedia.   

Prime Minister Tun Dr Mahathir Mohamad later said the proceeds from the Samurai bond will be used to retire some of the costly loans taken by the previous government.  

During his visit to Japan in June, Dr Mahathir has asked Japan to extend it yen credit in the form of soft loans, some of which may be used to retire old loans to offset high borrowing costs.

For full coverage of Budget 2019, go to http://bit.ly/budget2019TheStar