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Japan Bond Will Provide Some Cash to Alleviate Child Poverty

Ayai Tomisawa

(Bloomberg) -- About one out of seven children live under the poverty line in Japan, one of the highest figures among rich countries, and the coronavirus pandemic could worsen their situation.

Daiwa Securities Group Inc. is trying to help, with a bond sale. The Japanese brokerage priced 75 billion yen ($698 million) of notes in two tranches targeted at individual investors on Tuesday, and a small portion of the funds raised -- 0.15% -- will be used to support poor kids.

“The coronavirus situation has hit economically marginalized people in particular,” said Daiwa spokesman Yuji Kamioka. “We’ve noticed that children living in poverty are suffering, so we decided to take action.”

Daiwa’s debt sale comes as borrowers globally issue bonds to fight the impact of the coronavirus, with $106 billion of funds raised so far, according to Bloomberg-compiled data. Chinese companies have sold the most so-called pandemic bonds, and Bank of America Corp. last week priced a $1 billion issue to fund relief efforts, the first sale from a U.S. financial institution that explicitly links all proceeds to tackling the virus.

In Japan, Mitsubishi UFJ Financial Group Inc. plans to sell about 60 billion yen of sustainable bonds to be used for lending to small- and mid-sized companies whose profits are sagging due to the crisis.

Daiwa is offering three-year notes with a 0.3% coupon and five-year notes at 0.5%, according to filings. Some of the funds that it raised will go to non-profit and non-governmental organizations specializing in supporting vulnerable kids who are often in single-parent households and setting up e-learning platforms for children, as well as providing food to children who aren’t in school.

(Updates with bond pricing details)

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