The Dai-Ichi Mutual Life Insurance Co., with over USD255 billion in assets, is looking to purchase a yen-denominated synthetic collateralized debt obligation in the coming months. The insurer aims to invest around USD30 million in a CDO structured on Japanese credits, according to Yuji Nakada, senior assistant manager of the capital markets department in Tokyo.
Dai-Ichi is looking to invest in the equity and rated tranches of a yen-denominated CDO but will wait until the markets stabilize, likely within the next few months. "It's an attractive investment for us," said Nakada, highlighting the high-yield returns available on such products. He continued that as his department focuses on Japanese yen investments, it will not look to take on foreign exchange risk that would accompany a U.S. dollar-denominated product.
The firm has purchased yen-denominated CDOs in the past, according to Nakada, who declined to elaborate. He continued that the insurer is in talks with Deutsche Bank and J.P. Morgan and will base its decision upon pricing and attractiveness of the structure. Atsuko Yoshitsugu, a spokeswoman at J.P. Morgan, declined comment. Spokesmen at Deutsche Bank did not return calls by press time.
