JAL said to plan yen bond as its yield premiums fall

JAL is planning a yen bond sale next month, people familiar with the matter said, in what would be its first debt sale since March last year as its yield premiums fall. The Tokyo-based carrier has hired banks for an offering of about 10b yen ($92m) of five-year notes, said the people. A Japan Airlines spokesperson declined to comment. The yield premium on JAL’s 2023 bonds widened more than 50 basis points to 104 basis points in May last year as the Covid-19 pandemic put the brakes on international travel, but the spread has decreased 25 basis points since then as vaccine roll-outs spark expectations of a gradual recovery in tourism, Bloomberg-compiled data show. Japan Airlines declined earlier this month to issue any profit guidance due to uncertainty surrounding the pandemic as it reported a loss for the year ended March 31. But recent debt offerings by airlines suggests there’s demand among investors for the sector’s notes as they bet on a rebound in passenger traffic after an easing in infections. <br/>