(Bloomberg) -- Hokkaido Electric Power Co. dropped Nomura Holdings Inc.’s securities unit for a yen bond sale, after Japan’s securities watchdog announced that it had investigated the brokerage regarding suspected market manipulation in government bond futures and found violations.
The power company made the decision in the light of an expected punishment from the Financial Services Agency and the possible impact on bond management, according to Kenichiro Abe, a group leader in Hokkaido Electric’s finance group.
“We want to be cautious, as this is the first transition bond for us,” Abe said by phone.
This is the second time this year that issuers have changed lead underwriters after Japan’s FSA penalized Mitsubishi UFJ Morgan Stanley Securities Co. in June. The amount of corporate bonds issued in Japan’s domestic market this fiscal year has already exceeded ¥10 trillion ($68 billion), a record for the first half, and the coming months are typically a busy time for brokerages.
Hokkaido Electric is preparing to sell about ¥25 billion of transition bonds across two tranches, and it is scheduled to decide the terms in October. According to a regulatory filing Friday, Mizuho Securities Co., Daiwa Securities Co., SMBC Nikko Securities Inc. and Mitsubishi UFJ Morgan Stanley will lead the sale.
Nomura’s Tokyo-based spokesperson wasn’t immediately able to comment.
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