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KUALA LUMPUR, Sept 8 (Reuters) - Malaysia says it has agreed with Japan on its second issuance of samurai bonds at a rate of 0.5% for 10 years, its finance ministry said on Sunday.
“The prime minister said Malaysia has gotten the agreement from Japan’s prime minister, Shinzo Abe, for the bond issuance,” according to a statement.
“Japan Bank for International Cooperation (JBIC) will guarantee the samurai bond issuance, and has agreed to reduce the interest rate to 0.5% with term of maturity of 10 years.”
Malaysia had issued a 200 billion yen samurai bond earlier in March, marking its return to the Japanese bond market after 30 years. Its issuance is part of the government’s efforts to raise funds due to huge debts incurred by the previous administration.
Malaysian Prime Minister Mahathir Mohamad, who was elected in a change of government last May, has blamed the previous administration of Najib Razak for saddling the country with debt of more than 1 trillion ringgit.
He said in November that the samurai bond would be issued with low interest rates to pay back some of the “costly” loans taken by Najib’s government.
Reporting by Emily Chow; editing by David Evans