Japan's yield-hungry investors are helping turn companies that were once bond-market pariahs into stars.
Olympus Corp., the medical equipment maker that came under fire six years ago for a cover-up of losses, this month sold its first bond to the public since 1996, to strong investor demand. Tokyo Electric Power Co. Holdings Inc. issued its first 10-year notes since before the Fukushima nuclear crisis. Debt of Japan Airlines Co., which emerged from bankruptcy in 2011, now outperforms bonds of domestic rival ANA Holdings Inc.
It's not just higher yields that are attracting investors, according to Mizuho Securities Co. chief credit strategist Hidetoshi Ohashi. Olympus, for example, owns competitive technologies, while JAL has cut unprofitable businesses, and Tepco has government support, he said. But some investors such as Jun Fukashiro at Sumitomo Mitsui Asset Management say that generally speaking bond buyers may be underestimating risks in their hunt for yield.
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