Another Samurai bond offered
Japan proposes ¥200bil to help Malaysia address its huge debt
JAPAN has offered another ¥200bil (RM7.4bil) to Malaysia in the form of yen-denominated bonds to help Malaysia address its huge debts.
The offer was made by Prime Minister Shinzo Abe to Tun Dr Mahathir Mohamad during their bilateral meeting on Tuesday.
Malaysian officials confirmed the Samurai bond offer but clarified that it would be issued, if needed, after six months of the first ¥200bil Samurai bond to be issued before March next year.
An official said the offer was unexpected but felt that it was a signal of confidence in the Malaysian government under Dr Mahathir.
“The Finance Ministry will decide on the additional 200 billion yen. We did not expect the additional offer.
“Abe raised it at the meeting as he has confidence when Dr Mahathir explained our fiscal,” said one official.
Dr Mahathir thanked Abe after the talk for his assurance that Japan would help in solving the country’s financial problems in the future when needed.
The Prime Minister in his press conference with the Malaysian media before departing for Kuala Lumpur yesterday indicated that the additional bond offer would be at the lowest rate at 0.65%.
“This bond is the lowest when we compared with previous loans which we pay up to 7% interest,” he added.
When tabling Budget 2019, Finance Minister Lim Guan Eng revealed that the Japanese government had offered to guarantee up to ¥200bil for the issuance of 10-year Samurai bonds via the Japan Bank of International Cooperation (JBIC) at an indicative coupon rate of 0.65% to be issued before March next year.
Dr Mahathir also said Malaysia was getting the JR Kyushu Railway Company’s cooperation to look into the problem of the national railway to ensure the services were fully beneficial to the nation.
“Currently, our train services are almost completed – double tracking and electrification.
“However, only 30% is being used and there is (another) 30% of unused potential railways,” Dr Mahathir said.
Abe has promised a possible yen loan with a primary focus in transportation, education and human resource development pending a study to be conducted.
Japan is sending a team of experts from its rail companies at the end of this month with a view to improve passenger and cargo transportation.