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Bond spotlight

JERA and Kyushu Electric return to the USD bond market

Written by Jeannette Leong

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Japanese utilities continue to access both domestic and offshore bond markets, with conventional and labelled financing developing in parallel as the sector funds Japan’s energy transition. JERA Co., Inc., rated A- by S&P, is a major global LNG player and Japan's largest thermal power generator, is marketing a USD500 million 5-year bond, while Kyushu Electric Power Company (KYUSEL), one of Japan's regional electric utilities with a diversified generation mix, rated A3 with a stable outlook by Moody's, has mandated banks for a 10-year USD benchmark.

Neither deal is labelled, despite both issuers having previously used transition or green financing in JPY. KYUSEL's bonds also include substitution provisions allowing the issuer's obligations to be transferred to KYUDEN Holdings without bondholder consent, ahead of the group's transition to a pure holding-company structure in April 2027.

USD issuance among Japanese utilities continues to broaden, following Chugoku Electric, Kansai Electric, Hokkaido Electric and Tohoku Electric. Offshore USD markets offer deeper liquidity and a broader investor base than the domestic JPY market, though often at a premium. JPY remains the core funding market and principal venue for labelled issuance, while USD is becoming a more regular source of conventional funding diversification.

About the author

Jeannette Leong

Jeannette Leong

Research Associate, APAC

Based in Singapore, Jeannette focuses on credit research and analysis across the Asia-Pacific region. She brings 19 years of fixed income investing experience in emerging markets, Asian fixed income and China’s onshore bond market.

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