Rakuten sells record ¥400 billion of bonds on retail demand
The 5.5-year bonds carry a 4.37% coupon and were priced at a spread of 200 basis points over the benchmark 10-year Japanese government bond.
Rakuten Group successfully sold ¥400 billion ($2.5 billion) worth of yen-denominated bonds on Friday, marking its largest-ever retail bond offering. The bonds, which mature in 5.5 years, carry a 4.37% coupon rate and were priced at a 200 basis point spread over the benchmark 10-year Japanese government bond. Approximately ¥360 billion of the issuance was allocated to retail investors, while ¥40 billion was directed towards institutional investors.
This significant bond sale underscores the increasing importance of retail investors as a funding source for large corporations. As more individuals move their money from low-yielding deposits into higher-yielding assets like corporate bonds, demand for these securities is growing. Toshiyasu Ohashi, a visiting professor at Chiba University's Graduate School of Accounting and Finance, noted that households are starting to recognize the potential benefits of investing in corporate bonds, especially as inflation erodes the value of cash and deposits.
Since the beginning of 2026, Japanese companies have collectively sold about ¥3.2 trillion worth of retail bonds, with Rakuten's latest offering contributing to this surge. This represents a 15% increase compared to the previous year's record. Ohashi believes that this heightened demand could help address the "chicken-and-egg problem" that has previously hindered the growth of Japan's corporate bond market.
By generating stronger demand, more retail bond issuances may follow, ultimately expanding the overall corporate bond market in Japan.
Despite returning to a quarterly net profit in the April-June period for the first time in six years, Rakuten continues to face challenges. Its mobile business remains unprofitable, and the company anticipates substantial bond redemptions beginning in 2027. To meet its funding requirements, Rakuten plans to utilize a combination of domestic and international bond issuances, as well as asset monetization strategies.
According to lead manager Daiwa Securities, the institutional portion of the bond sale initially targeted a 170-180 basis point spread over government bonds but was ultimately priced at 200 basis points due to strong supply and widening spreads in the secondary market. Final demand for the bonds exceeded expectations, representing roughly 1.3 times the issue size.
Written by urgent.news from Japan Times's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
