RBS Plans First U.K. Government-Backed Yen Bond Sale

RBS Plans First U.K. Government-Backed Yen Bond Sale

March 6 (Bloomberg) -- Royal Bank of Scotland Group Plc, the biggest state-controlled U.K. bank, plans to sell its first bonds in yen that are guaranteed by the British government.

RBS is managing its own sale of euroyen notes and will offer them to investors “in the near future,” according to an e-mail sent to potential buyers today. Yuk-Min Hui, a Hong Kong- based spokeswoman at RBS, hasn’t yet responded to an e-mail seeking comment.

The sale will add to $39 billion of government-guaranteed bonds that Edinburgh-based RBS has sold since November in dollars, euros, pounds, Australian dollars and Swiss francs, data compiled by Bloomberg show. RBS joins General Electric Capital Corp., Morgan Stanley and Barclays Plc in tapping Asia’s local-currency bond markets for lower-cost borrowing.

While the U.K. government owns 58 percent of RBS, the state’s stake in voting shares may rise to 75 percent and its “economic interest” may jump to as much as 95 percent, Chief Executive Officer Stephen Hester said last month.

The bank reported a net loss of 24.1 billion pounds ($34 billion) for 2008 compared with a profit of 7.3 billion pounds a year earlier. The loss is the biggest ever reported by a U.K. company, surpassing the 22 billion pounds Vodafone Group Plc posted in 2006.

Lloyds TSB Bank Plc, a unit of Lloyds Banking Group Plc, in January sold 16 billion yen of three-year U.K. government- guaranteed floating-rate notes priced to pay 40 basis points more than the London interbank offered rate for yen, Bloomberg data show.

Euroyen notes are yen-denominated bonds sold by non- Japanese borrowers outside Japan. A basis point is 0.01 percentage point.

BLOOMBERG