TOKYO (March 8): Malaysia has turned to Japan for its first fundraising in the global debt market since a landmark election last year that returned Prime Minister Mahathir Mohamad to power.

The country sold 200 billion yen ($1.8 billion) of 10-year yen bonds at a coupon of 0.53 percent. The financing underscores how Japan remains a source of cheap funds for foreign borrowers after interest have risen.

The coupon on the note is lower than the 0.65 percent originally indicated by Finance Minister Lim Guan Eng, who visited Japan last month to meet investors.

In a boost, the offering came with a guarantee by Japan Bank of International Cooperation, a state-controlled Japanese lender. Concerns have mounted about Malaysia’s government debt and liabilities.

Mahathir said last year after his election that the number was higher than previously disclosed under the former administration, partly because the state had given guarantees to companies, like 1MDB -- the investment fund at the center of a multibillion corruption scandal -- which couldn’t repay debt.

Mahathir is known in Japan from his earlier stint as prime minister for wishing to cultivate good ties with the country, and he picked Japan for his first overseas visit on return to power last year.

Malaysia’s debt holds the fourth-lowest investment grade at Fitch Ratings, S&P Global Ratings and Moody’s Investors Service, and is a notch higher at A at Japan’s Rating & Investment Information Inc.