Daiwa SMBC recently launched a USD40 million AAA rated repackaged bond which contains an emissions rights trading component--a first in the Japanese market. "This is not a huge market but attention is growing in Japan," said a market official familiar with the deal. The principle of the seven-and-a-half-year note is linked to AAA rated Federal National Mortgage Association benchmark notes for which the coupons are passed through an investment vehicle and are used for trading strategies in certified emission reductions. Officials in Daiwa's structured derivatives department in Tokyo declined all comment.
Daiwa Floats Emissions Trading Bond
