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Japan-Update

KKR to float yen bonds for investing in Japan

US fund will target companies with long-term growth prospects

TOKYO -- U.S. investment fund Kohlberg Kravis Roberts will issue its first yen-denominated bonds this month to raise funds for investing in Japanese companies it considers good bets to flourish over the long term.

KKR will issue five- and seven-year bonds worth an estimated 30 billion yen ($281 million). If investors show strong interest, it may float more bonds later, possibly with a longer maturity of 20 years. Coupon rates and other details have yet to be determined.

Investment funds generally draw money from institutional investors and use it for corporate acquisitions. Now KKR will also raise funds through bonds to invest in promising Japanese businesses.

KKR expects the bond issue to help it reduce foreign exchange risks and boost its recognition among fixed-income investors in Japan, which in turn will promote its investments in Japanese companies.

Companies that are actively acquiring other businesses are likely to be targeted, as are those with long-term growth prospects, even if their earnings have been slow to grow.

Mizuho Securities and SMBC Nikko Securities will be the underwriters for the bond issue. KKR hopes to keep issuing bonds in Japan at a pace of about twice a year.

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