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Derivatives

Japanese Firm Eyes Credit Boost

ORIX Corp., one of Japan's largest financial services companies with subsidiaries across the globe and JPY5.3 trillion (USD44 billion) in operating assets, is planning to increase its use of credit-default swaps to buy protection on its USD2 billion bond and loan portfolio.

An official in Tokyo said it is considering boosting its purchases of credit-default swaps to cover 25% from 5-10% of its portfolio, because of deteriorating credit quality among Japanese corporates.

Another official at the firm said pricing is the most important factor for selecting counterparties. Firms it has used for credit derivatives transactions in the past include Deutsche Securities and J.P. Morgan. Seiko Adachi, spokeswoman at Deutsche Securities and Atsuko Yoshitsugu, spokeswoman at J.P. Morgan, both declined comment.

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