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Shibosai Bonds

Moneyzine Editor
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Moneyzine Editor
1 mins
September 21st, 2023
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Definition

The term shibosai bond refers to an indenture privately placed in Japan, in Japanese yen, by a foreign bank or corporation. Shibosai bonds are issued when a corporation wishes to raise capital from private investors located in Japan.

Explanation

Foreign corporations that wish to raise funds in Japan have the option of issuing what are known as shibosai bonds. These bonds are sold by non-domestic entities, including corporations, financial institutions and governments, and are issued in Japanese yen. As is the case with samurai bonds, shibosai bonds are subject to local regulations.

Since the bond is issued in Japan's domestic currency, investors located in Japan are also insulated from currency rate risk. Foreign companies will typically issue these securities if they have plans to establish operations in Japan. The difference between samurai bonds and shibosai bonds is subtle, but important. While samurai bonds are issued to the public via brokers, shibosai bonds have limited distribution, typically sold to, and held by, large financial institutions and banks.

Related Terms

Formosa bond, kimchi bond, Uridashi bond, shogun bond, Eurobond

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