Nomura’s EUR 700M TLAC Notes: A Pillar of Resilience in Regulatory and Market Turbulence

Amid rising regulatory scrutiny and volatile global markets, Nomura Holdings has positioned itself as a beacon of stability through its EUR 700 million issuance of Euro-denominated senior notes under its Total Loss-Absorption Capacity (TLAC) framework. Rated ‘A-‘ by Fitch Ratings on May 19, 2025, this move underscores the firm’s strategic acumen in optimizing its capital structure while bolstering creditworthiness—critical for maintaining investor confidence and navigating regulatory pressures.

The Regulatory Imperative: TLAC as a Strategic Necessity

The EUR 700 million TLAC notes, maturing in 2030 with a fixed coupon of 3.459%, are not merely a financing tool but a deliberate step toward compliance with global regulatory standards. TLAC requirements, enforced since March 2021, mandate systemically important banks to hold sufficient capital to absorb losses without taxpayer bailouts. For Nomura, this issuance directly contributes to its TLAC buffer, reducing reliance on short-term funding and enhancing its ability to withstand shocks in global markets.

Fitch’s ‘A-‘ rating for the notes aligns with Nomura’s Long-Term Issuer Default Rating (IDR), reflecting its strong standalone credit profile and the likelihood of government support in distress scenarios. This rating sends a clear signal to investors: Nomura’s capital structure is robust enough to navigate regulatory demands while maintaining access to affordable funding.

Lowering Funding Costs, Raising Confidence

The 3.459% coupon rate on the TLAC notes is a testament to Nomura’s improved credit standing. Compared to its July 2024 USD senior notes—which carried coupon rates as high as 5.783%—this lower rate highlights the firm’s success in reducing borrowing costs through strategic debt management.

By issuing TLAC-eligible debt at favorable terms, Nomura reduces refinancing risks and locks in long-term capital. This stability is further bolstered by its ¥2,529.2 billion market cap and a stable outlook from both Fitch and S&P, which reaffirm its capacity to meet obligations even in adverse conditions.

Strategic Resilience in Global Markets

Nomura’s TLAC issuance is part of a broader strategy to strengthen its global footprint. The firm’s recent acquisition of Macquarie’s US and European asset management business, coupled with its TLAC-compliant capital structure, positions it to capitalize on cross-border opportunities while mitigating systemic risks.

The EUR 700 million notes also diversify Nomura’s funding base, reducing exposure to yen-denominated liabilities. In a world where geopolitical tensions and interest rate volatility dominate, this diversification enhances liquidity management and investor appeal.

A Compelling Investment Case: ‘Strong Buy’ Technicals

Investors should take note of the ‘Hold’ rating currently assigned to Nomura’s stock, with a price target of ¥870.00—a 14% premium to its May 2025 price. Technical indicators suggest upward momentum:

• Relative Strength Index (RSI): Above 50, signaling buying pressure.
• Moving Averages: The 50-day MA has crossed above the 200-day MA, a classic bullish ‘golden cross.’

The 3.459% coupon on the TLAC notes also offers attractive yields compared to European government bonds, which hover near historic lows. This makes Nomura’s notes a compelling addition to income-focused portfolios, especially amid the search for yield in a low-rate environment.

Final Analysis: Act Now Before the Gap Narrows

Nomura’s EUR TLAC issuance is more than a regulatory box-ticking exercise—it’s a masterclass in capital structure optimization. By securing affordable, long-term funding at ‘A-‘ ratings, Nomura reinforces its creditworthiness, lowers costs, and positions itself as a resilient player in volatile markets.

For investors, the ‘Strong Buy’ technicals and the strategic clarity of Nomura’s actions present a rare opportunity. With TLAC compliance reducing tail risks and its global expansion underway, now is the time to allocate capital before the market fully recognizes the value embedded in this issuance.

Act decisively—Nomura’s path to financial resilience is clear, and its rewards are within reach.