Itochu Corp. is preparing a significant dollar note issue as part of a broader plan to diversify its funding sources. This marks the company’s first U.S. dollar bond issuance in five years and reflects its shifting financial strategy. The Japanese trading giant is currently planning to issue between ¥30 billion and ¥50 billion in yen-denominated bonds. In addition, it is considering a $500 million U.S. dollar bond offering. This combined issuance could push its total annual bond sales beyond ¥100 billion.
So far in the current fiscal year, Itochu has already raised ¥71.2 billion through domestic bond sales. If the new plan proceeds as expected, 2025 will mark the company’s largest bond issuance since 1995. Kenichiro Soma, executive officer in charge of finance at Itochu, stated that the company is evaluating market conditions carefully. He emphasized the importance of expanding beyond traditional funding sources, such as bank loans, in order to maintain flexibility and manage risk.
The planned dollar note issue follows a credit upgrade in 2023 that strengthened Itochu’s appeal to debt investors. That upgrade made it easier for the firm to access broader capital markets and reduce its funding costs. By tapping global bond markets, Itochu aims to lower its exposure to domestic interest rate fluctuations. The dollar bond will also allow it to attract foreign investors and increase its international presence.
The dollar note issue comes as Japanese trading companies face growing competition and investor scrutiny. With growth investment capped at ¥1 trillion annually, Itochu seeks to optimize its financing while maintaining shareholder returns. Market analysts suggest the move is well-timed. Global investors are currently seeking higher-quality corporate bonds amid narrowing credit spreads, particularly from stable Japanese issuers.
However, the plan is not without risk. Issuing debt in dollars introduces currency exposure and potential volatility in repayment costs. Itochu must balance those risks with the benefits of cheaper and more diversified capital. Over the next several weeks, the company is expected to make a final decision on the size and timing of the issuances. The outcome could influence other major Japanese firms considering similar steps. In summary, the dollar note issue marks a strategic pivot for Itochu. It reflects a calculated move to expand funding channels, tap international capital, and solidify its position in a competitive corporate landscape.
