Uniqlo Operator Fast Retailing Prepares $2 Billion Bond Sale

TOKYO, Japan — Billionaire Tadashi Yanai's Fast Retailing Co., operator of the Uniqlo apparel brand, is preparing to sell as much as 250 billion yen ($2 billion) of bonds next week in its first public debt offering.

The company began marketing about 100 billion yen of five- year notes at 25 to 31 basis points over Japanese government debt Friday, according to a person familiar with the deal. Asia’s largest clothing retailer is also marketing about 30 billion yen each in three-year, seven-year and 10-year bonds for sale late next week. The size of the whole deal is currently capped at 250 billion yen, the person said.

Japan Credit Rating Agency Ltd. scores Fast Retailing at AA, its third-highest investment grade. The average yield premium on Japanese corporate bonds with an AA rating was 19 basis points as of Dec. 3, according to data from SMBC Nikko Securities Inc.

A 250 billion yen sale would be the biggest public offering to domestic institutional investors by a Japanese company in the fiscal year beginning April, according to data compiled by Bloomberg. Local issuance of such notes has dropped 33 percent so far this fiscal year to 5.56 trillion yen, as record cash holdings by firms and higher bank lending have damped demand.

Fast Retailing reported a decline in Japanese same-store sales last month as “unusually hot weather” stifled sales of winter clothing. The company’s stock fell as much as 3.4 percent Friday in Tokyo and marked its biggest weekly drop since the five days ended Sept. 4.

Nomura Holdings Inc. said in a statement Nov. 27 that it was co-managing a bond deal for as much as 250 billion yen for Fast Retailing, together with securities units of Mitsubishi UFJ Financial Group Inc. and Sumitomo Mitsui Financial Group Inc.

By Finbarr Flynn, with assistance from Tesun Oh; editors: Andrew Monahan, Ken McCallum, Chris Bourke.