Japan Housing Finance Agency Bonds Sold At Record-Low Yields

Japan Housing Finance Agency Bonds Sold At Record-Low Yields The Japan Housing Finance Agency sold $3.4 billion of residential mortgage-backed notes priced to yield 1.34%, the lowest yield in its five-year history.

According to a Bloomberg News report, the bonds were priced 40 basis points (bps) above Japan's 10-year benchmark government debt. The sale was the agency's largest in a year.

Investors are buying residential-mortgage backed securities, or RMBS, that have a top credit rating and still pay a premium as the yield on Japan's benchmark 10-year debt fell to 0.93% this week, the lowest since November 2010. The notes offered the same extra yield as the preceding sale on March 16, according to data compiled by Bloomberg.

‘The low rate could work as an incentive for home buyers,’ says Toshitsugu Kanatani, chief deputy director at Japan Housing's market operations department, in an interview with Bloomberg. ‘The coupon was set at this level as a result of supply and demand after our careful conversation with investors.’


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