Credit Suisse prices Ñ64.3 billion samurai bond

Credit Suisse taps the samurai bond market for the first time in four years.
In an effort to diversify its investor base, Credit Suisse Group has priced a three-tranche Ñ64.3 billion ($600 million) samurai bond.

Credit Suisse Group Finance, part of Swiss bank giant Credit Suisse Group, says it sold Ñ20 billion in five-year fixed-rate notes, Ñ7.3 billion in three-year floating-rate notes and Ñ37 billion in five-year floating-rate notes. The five-year fixed-rate notes have a 2.41% coupon.

The three-year floating-rate notes have a spread of 90bp over three-month yen Libor, while the five-year floating-rate notes have a spread of 110bp over the same benchmark. All three tranches were issued at par.

The fixed-rate notes are targeted at life insurance companies, regional banks and pension funds, according to a Credit Suisse source, while the floating-rate notes are targeted at financial institutions and small corporate investors.

The size of the issue was decided based on the response of investors after a roadshow in Tokyo last week, where the Swiss-based bank met 10 likely investors, the Credit Suisse source says.

The sentiment in the Japanese market has turned sour towards samurai bonds in the past few days, mainly affected by the ongoing troubles at Lehman Brothers and the plunge in its share price since the start of the week.

Recently, Citigroup sold Ñ315 billion of three-year samurai bonds with a coupon of 3.22%. A bond analyst says the issue had considerable appeal because of the high yield.

The coupon on the latest Citigroup samurai issue was higher than the 2.66% the bank paid when it sold Ñ186.5 billion of bonds to Japanese investors in June.

Samurais are yen-denominated bonds issued by foreign borrowers in Japan.

The Credit Suisse bonds were issued by Credit Suisse Group Finance (Guernsey), the group's financing subsidiary. Credit Suisse Securities (Japan) was the lead manager for the deal, which is only the second samurai bond issued by Credit Suisse Group and the first in four years.
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