Banks in Japan might not be able to copy the structure of SMBC’s debut covered bond, resulting in a lack of uniformity in the market that may cause concern among investors. This stands in contrast to Korea, where banks are now exploring issuing in Korean won as there is a law in place that supports these instruments.
The rise of Japanese covered bonds was one of the biggest developments in the market this year.
Sumitomo Mitsui Banking Corporation (SMBC) broke new ground when it issued its inaugural €1bn five year deal in October 2018. At the time, one of the investment banks that helped arrange the