(Bloomberg) -- Japan’s Norinchukin Bank got a vote of confidence from bond investors on Wednesday, when spreads on the firm’s first dollar issuance since it revealed massive losses tightened significantly in secondary trading.

Most Read from Bloomberg

• Urban Heat Stress Is Another Disparity in the World’s Most Unequal Nation

• From Cleveland to Chicago, NFL Teams Dream of Domed Stadiums

• Singapore Ends 181 Years of Horse Racing to Make Way for Homes

• Chicago’s $1 Billion Budget Hole Exacerbated by School Turmoil

• Should Evictions Be Banned After Hurricanes and Climate Disasters?

The lender’s $500 million five-year green bond was quoted at about 100 basis points above Treasuries, according to credit traders, after pricing at a spread of 123 basis points on Tuesday.

It was the first dollar bond sale by Japan’s largest agricultural lender, commonly known as Nochu, since it warned in June that it may post a loss of ￥1.5 trillion ($10 billion) for the year ending in March, a result of its investments in low-yielding US and European government bonds.

The bond losses have put pressure on Nochu’s credit ratings, but investors got assurance from the fact that Japanese authorities designate the bank as a systemically important lender domestically, a label that increases the odds of government support. Investors were also attracted by Norinchukin offering a wider spread than comparable bonds from its bigger domestic peers.

“It’s likely the bank would get some level of support from the government if needed,” said Yusuke Ueda, chief investment strategist at 5Value Asset. “There are a lot of investors who want to buy Norinchukin’s debt because of the additional spreads on the bonds.”

Bloomberg Intelligence analysts said earlier this week that fair value for five-year dollar debt of Norinchukin was around 115 basis points over Treasuries, compared with a 75 to 85 basis point range for Japan’s megabanks, such as Mizuho Financial Group Inc. Norinchukin’s dollar bond maturing in 2028 was trading at a spread of about 75 basis points before the bank first flagged losses in May. It sold that bond in March of 2023; it was its most recent new issue until Tuesday’s debt offering.

Read also: Nochu’s Spreads Could Tighten to the Megabanks

The tightening in the bank’s bonds is also a sign of investors’ hunt for yield, with bond spreads near record lows for Asian high-grade dollar debt and multi-year lows for US peers, according to Bloomberg indexes.

Proceeds from the new bond will primarily be used to finance or refinance environmental-related projects as defined in the bank’s sustainable-bond framework.