Sanitary products company looks to clean up with convertible

Japanese manufacturer Unicharm announced today that it will raise up to JPY80.5 billion ($956.9 million) by issuing euroyen convertible bonds, providing a further sign of the growing interest from Japanese companies in issuing convertibles.

The offer consists of JPY30 billion and JPY40 billion in 2013 and 2015 zero coupon convertible bonds respectively, and may be increased by a further Y10.5 billion if the arrangers choose to exercise options granted to them by the company.

The sanitary napkin and diaper manufacturer intends to use the proceeds to fund the repayment of short-term borrowings of JPY60 million which were used by the company to fund the acquisition of Unicharm PetCare. The company also intends to use any net proceeds to pay off capital gains tax associated with the merger of Unicharm PetCare into the company.

The move follows last week’s announcement by compatriot Nidec that it would raise up to $1.18 billion in Japan’s largest convertible bond issue in almost two years. The motor manufactuer intends to use the proceeds to finance new acquisitions in south east Asia and to expand its European factories as part of its ambitious bid to become the world’s leading motor maker.

Sawai Pharmaceutical, Japan’s second-largest generic drug maker, also revealed plans last week to issue as much as YPY30 billion ($357 million) in convertible bonds in filings with Japan’s finance ministry.