Domestic banks in Japan are looking at structuring synthetic collateralized debt obligations to free up capital with a greater sense of urgency as their loan books worsen in tandem with the country's stock market, according to market officials. The success of Mizuho Bank's securitization earlier this year is also causing other banks to look at the structures, according to one credit structurer (DW, 3/31). In addition, Mizuho itself is planning to securitize more of its loan book to free up capital, according to an official at the firm.
Nomura Securities has about five yen-denominated synthetic collateralized debt obligations in the pipeline before year end, according to a firm official. These are driven by Japanese domestic bank's desire to improve their financial position. Go Yajima, senior credit derivatives structurer at BNP Paribas in Tokyo, agreed that there are more of these deals in the pipeline, noting that domestic banks are feeling pressure to clean up their operations and are eyeing CDOs.
In addition to banks in Japan, asset managers such as INVESCO Japan are looking to structure synthetic CDOs (DW, 10/7).
