TOKYO, Feb 9 (Reuters) - Tokyo Electric Power Co (Tepco) has hired six investment banks to sell bonds worth about 100 billion yen ($890 million) in its first debt offering since the 2011 Fukushima nuclear disaster, a person familiar with the deal told Thomson Reuters DealWatch.
The banks - including SMBC Nikko, a unit of Sumitomo Mitsui Financial Group, and Nomura Securities Co, a unit of Nomura Holdings Inc - have been hired as book runners for bonds to be issued by Tepco Power Grid Inc, a Tepco unit.
The utility, once Asia’s largest, was essentially nationalised after Fukushima. It currently faces billions of dollars in costs to dismantle the crippled Fukushima Dai-ichi nuclear power plant, decontaminate the area and compensate victims of the 2011 crisis, when three reactors melted down after being hit by a tsunami.
Tepco is seeking to re-enter the bond market by the end of this fiscal year in March, sources told Reuters and DealWatch last month.
The company must submit a regulatory filing by the middle of this month to complete the debt issue on schedule, said the source, who did not want to be named as he was not authorised to discuss the matter publicly.
The other book runners hired by Tepco are Mitsubishi UFJ Morgan Stanley Securities Co., a unit of Mitsubishi UFJ Financial Group Inc; Mizuho Securities Co, a unit of Mizuho Financial Group Inc; Daiwa Securities Co, a unit of Daiwa Securities Group Inc; and Shinkin Securities Co, a unit of Shinkin Central Bank, the source said.
Tepco and the six banks declined to comment.
The sale, if successful, will mark the return of the company to Japan’s corporate bond market, which it dominated before the 2011 earthquake and tsunami triggered the world’s worst nuclear crisis since Chernobyl in 1986, bringing Tepco to its knees.
Tepco’s plan to sell three-, five- or ten-year bonds initially met with caution from the state-backed bailout body that was created to help the utility pay for compensation for the Fukushima disaster, the source said.
But previously sceptical investors seem to have now become more comfortable with the utility’s outlook after the government provided more details on decommissioning and compensation costs.
The utility, which will see 650 billion yen worth of bonds maturing in the year ending March 2018, wants to restart regular bond issuance to ensure stable refinancing.
$1 = 112.3100 yen Reporting by Issei Hazama, writing by Taiga Uranaka; Editing by Himani Sarkar