Public Offering Bonds and Joint Local Government Bond

  • The following types of publicly offered Local Government bond exist:
    • National publicly offered Local Government Bonds
  • Local Governments sell bonds to a broad range of investors nationwide through securities companies, banks, and others as underwriters. The following 49 Local Governments issue national publicly offered bonds (as of FY2010).

The following 49 Local Governments issuers natiowwide public offeriwg LGB as of FY2010

Of the above, the Local Governments that offer jointly issued Local Government bonds are the 35 underlined ones.(as of FY2010)

  • National publicly offered bonds are usually coupon bearing with maturities of 5 years and 10 years. The 5-year notes have been issued since July 2000. Recently, more maturities have been offered, including 15-year, 20-year, and 30-year superlong bonds.
  • Issuance terms for national publicly offered bonds used to be standardized, but some are now decided individually based on negotiations with the underwriting syndicate. Examples include Tokyo metropolitan government bonds since FY2002, Yokohama city bonds since FY2004, and Kanagawa prefecture and Nagoya city bonds since April 2006. Other Local Governments offering bonds were asked by the Ministry of Internal Affairs and Communications in a 14 August 2006 memo to consider setting issuance terms independently starting in September 2006.
  • Local Government with jointly negotiated issuance terms have been offered since April 2003. To increase the size of their offerings and thereby effectively and reliably raise financing, the 27 Local Governments that offer Local Government nationally began joint issuances in accordance with Article 5-7 of the Local Finance Act. The local governmet that offer jointly issued Local govenment bonds are 28 ones as of2007. They bear joint responsibility for the total issuance amount each month.
  • Joint issuances are designed to protect bondholders through joint responsibility for principal and interest repayment as well as promote demand for local government by enhancing the creditworthiness of the securities.
Article 5-7 of the Local Finance Act:

When local bonds are issued, two or more local public bodies, on approval of their respective assemblies, may issue bonds jointly. Such local public bodies shall be collectively responsible for the redemption of the local bonds and the interest payments.

Planned lssuawce FY2009 <Publicly offered bonds>