Equity Tranches Take Center Stage In Japan

Credit officials in Japan are seeing increased demand for equity tranche components in synthetic CDO deals.

  • 21 Oct 2005
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Credit officials in Japan are seeing increased demand for equity tranche components in synthetic CDO deals. "There are very thin spreads at the moment for super senior transactions so we're seeing a move toward equity," explained Yusuke Seki, v.p. and senior credit officer at Moody's Investors Service in Tokyo. In recent months firms such as BNP Paribas have rolled out leveraged super senior deals in Japan (DW, 8/12). But market officials noted increased issuance, as well as a shift in the correlation curve, means super senior tranches are not as attractive in the current environment.

Seki said Moody's has been seeing inquiries into deals including the equity tranche of portfolios--though with some protection included. Long equity/short other tranches have been on the radar screen as well as CPPI-linked deals. "This is a new development being pushed out here," said a credit specialist at a European house, noting his firm expects to close CPPI-linked equity deals in the coming months, as a result of Japanese investors becoming more comfortable with such capital-protected deals.

  • 21 Oct 2005

All International Bonds

Rank Lead Manager Amount $m No of issues Share %
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1 Citi 253,106.92 930 8.89%
2 JPMorgan 230,914.50 1036 8.11%
3 Bank of America Merrill Lynch 221,389.46 762 7.78%
4 Goldman Sachs 171,499.26 554 6.03%
5 Barclays 169,046.60 646 5.94%

Bookrunners of All Syndicated Loans EMEA

Rank Lead Manager Amount $m No of issues Share %
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1 HSBC 27,039.93 106 7.36%
2 Deutsche Bank 25,125.19 81 6.84%
3 Bank of America Merrill Lynch 23,128.33 61 6.29%
4 BNP Paribas 19,315.94 110 5.26%
5 Credit Agricole CIB 18,706.93 106 5.09%

Bookrunners of all EMEA ECM Issuance

Rank Lead Manager Amount $m No of issues Share %
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1 JPMorgan 13,488.13 59 8.47%
2 Citi 11,496.21 73 7.22%
3 UBS 11,302.86 45 7.09%
4 Morgan Stanley 10,864.95 59 6.82%
5 Goldman Sachs 10,434.21 54 6.55%