(Bloomberg) -- One of the world’s largest cities is turning to international investors to fund environmental objectives in a pioneering bond issuance.
The Tokyo Metropolitan Government plans to raise as much as ¥50 billion ($350 million) from a sale of foreign-currency sustainability notes in October, said Makiko Hashiguchi, director of its bond section. It will mainly target European investors in the first such issuance by a Japanese local government, she said.
The city authority is turning more to the overseas bond markets, especially for debt linked to environmental and sustainable goals, as it reduces funding in the Japanese yen bond market due to interest-rate fluctuations.
“We expect the timing of this foreign bond issue to be attractive to investors, as we anticipate that interest rates will be lowered in the future,” Hashiguchi said in an interview.
This is the first time for Tokyo to raise funds overseas for environmental policy. It hired Goldman Sachs Group Inc. and three other foreign banks as lead managers, said two people familiar with the situation.
Tokyo hasn’t decided the maturities and whether the bonds will be denominated in dollars or euros, Hashiguchi said. She declined to comment on the lead managers of the deal.
--With assistance from Finbarr Flynn.
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