Nomura Securities is looking to structure constant-maturity synthetic collateralized debt obligations for the first time. "This is a focus for us," said a senior structurer in Tokyo, who notes the aim is to execute the deal within the next few months.
Although spreads are now trading at tight levels again, the structurer said a recent bout of spread widening in Japan, triggered by global uncertainty attributed to the U.S. auto sector, has prompted clients to consider products that could benefit from future spread blowouts. The structurer noted it will take some time to educate clients on constant-maturity instruments but expects the firm to issue CMCDOs before year-end. "This has potential because spreads are so tight," he added, noting it would also be a useful product for clients looking to diversify fixed income portfolios.
Rivals noted that while Nomura is not a leading player in the structured credit market, the firm should be able to complete a few such CMCDS deals this year.
