Downturn in Japanese banking sector poses risks to CLO bid

Several CLO issuers in the US and Europe have come to depend on Japanese investors to anchor triple-A tranches, but observers say Japan’s banks may no longer be able to soak up foreign paper if a bubbling banking crisis forces banks to clean up their act at home.

  • By Alexander Saeedy
  • 13 Mar 2019

Beset by negative interest rates, a shrinking population and a glut of savings, the Japanese economy can scarcely create yielding assets, pushing its banks abroad to buy debt that can offset its loss-making domestic banking sector.

But the limitations of that strategy became apparent when Mizuho announced last ...

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