Aging Japan gives birth to first 50-year corporate bond

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TOKYO — Corporate bond maturities are rising in Japan as insurers and pension fund managers look to align their portfolios to some of the word’s longest life spans.

A life insurer was among the main buyers of Japan’s first 50-year corporate bond issued by Mitsubishi Estate in April. Policyholders in their 30s and 40s who take out insurance to tide them over financially to age 100 and beyond are providing fuel for corporate Japan’s ultra long-term fundraising.

“This is a bond issue that I can brag about throughout my career,” said Toru Ueno, head of Mitsubishi Estate’s finance unit, who was in charge of the sale of the 50-year corporate bonds. The 42-year-old Ueno will turn 92 when the debt matures.

The bond sale comes amid a renewed debate over pensions in Japan following a controversial government report — later retracted — forecasting how much individuals will need to save for their own old age.

“Who is going to buy it?” Such comments appeared on social media when news of the real estate developer’s offering broke.

Even Japanese government bonds only offer a maximum maturity of 40 years. Nevertheless, although its bonds carry an annual yield of just 1.132%, demand exceeded initial estimates. In response, Mitsubishi Estate increased the issue to 15 billion yen ($139.7 million) up from 10 billion yen.



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