Domestic banks in Korea are jumping into synthetic collateralized debt obligation deals, looking for balance-sheet investments which offer attractive yields. Officials noted Woori Bank and Shinhan Bank have dipped their toes into the market in recent months (DW, 5/19) while Kookmin Bank and Korea Development Bank are at earlier stages and are studying the products. Officials at Kookmin and KDB declined comment.
"We're starting to see more banks looking at these products for their own books," said a marketer at a European house in Seoul. Global CDOs have traditionally been a hot seller with the larger insurers in the country, but bankers are seeing additional firms getting comfortable with the products and ready to plunge in to pick up additional yield over domestic bonds.
