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Nov 2019

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Japan: Corporate bond maturities rise with ageing population

Source: Asia Insurance Review | Aug 2019

Corporate bond maturities are rising in Japan as insurers and pension fund managers look to align their portfolios to growing longevity in the country, according to a report by Nikkei Asian Review.
 
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 driving corporate Japan’s ultra long-term fundraising. In comparison, Japanese government bonds only offer a maximum maturity of 40 years.
 
Buyers of the Mitsubishi Estate bond included asset managers with pension funds, regional financial institutions and insurers. But the biggest buyer was Sony Life Insurance, according to sources. 
 
The average life expectancy in Japan reached a record 87.26 years for women and 81.09 years for men in 2017. 
Other companies are moving in the same direction. East Japan Railway also plans to issue 50-year bonds soon. A 
 
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