RETAIL INVESTMENT | Tony Chua, Australia

Westpac begins offering Samurai bonds—source

The lender reissued yen-denominated bonds after a year-long hiatus due to global financial crisis.

A banker, who declined to be identified as he's not authorized to discuss the matter, said Westpac told investors it plans to price five-year, fixed-rate bonds at between 45 basis points and 55 basis points more than the yen swap rate and similar-maturity floating-rate notes at a spread of between 60 basis points and 70 basis points more than the three-month London interbank offered rate for yen.

Westpac is also marketing seven-year, fixed-rate bonds at between 55 basis points and 70 basis points, and 10-year, fixed-rate notes at between 65 basis points and 80 basis points, the banker said. A basis point is 0.01 percentage point, according to a report in Bloomberg.

Sales of Samurai bonds plunged to 1.3 trillion yen ($14.2 billion) last year from 2.3 trillion yen in 2008 after defaults by Lehman Brothers Holdings Inc. and Iceland’s Kaupthing Bank shook investors.

Westpac filed a document with Japan's Finance Ministry on 6 January stating that it will decide final terms on a five-year bond sale in mid-January.

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