Yamato Life Insurance, with JPY300 billion (USD2.3 billion) in assets, is considering making its first purchase of a synthetic collateralized debt obligation in the coming months. "We're studying the possibility," said Yoshimitsu Takano, manager of fixed-income in Tokyo, who runs the insurer's JPY20 billion fixed-income portfolio. He continued that Yamato Life may invest in yen-denominated tranches as they offer higher yield over traditional fixed-income instruments but he said it was too early to estimate the potential size or structure of its investment. He added any CDO it invested in would have to be referenced primarily to Asian credits.
Yamato Life is the product of a recent merger between Yamato Mutual Life Insurance and Azami Life Insurance. Takano noted that the insurer currently invests in both corporate and government Japanese bonds as well as dollar and euro-denominated bonds for the portfolio. Takano noted the insurer has yet to approach potential counterparties for such transactions.
