Nomura Holdings Inc. is urging investors buy Tokyo Electric Power Co. bonds after a report that the government plans to cap the utility's cleanup costs at the wrecked Fukushima No. 1 nuclear power plant.
The yield premium on Tepco's 1.155 percent notes due in 2020 fell to 343.4 basis points over government bonds Friday, its lowest in a month, and down from a record of 699 in September 2011. That compares with an average spread of 461 basis points for debt worldwide with the same B level credit-rating, the least since February 2011, according to Bank of America Merrill Lynch index data.
"Keep buying Tepco bonds and the faster the better," said Toshihiro Uomoto, chief credit strategist in Tokyo at Nomura, the nation's biggest brokerage. "It is a big, big change" if a cap is placed, he said.
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