International rating agency Moody’s Investors Service said today it rated a record ¥3.02 trillion ($25 billion) of collateralised debt obligations (CDOs) in the first quarter of the year. That compares to full-year volume of ¥3.14 trillion in 2002.“The ability of the market to absorb such a huge volume in a single quarter shows that the range of CDO investors is much wider than previously thought,” Moody’s said in the report.
The agency said synthetic CDOs accounted for ¥2.32 trillion, or 77%, of the first quarter’s issuance volume, primarily due to two large synthetic balance sheet collateralised loan obligations (CLOs), worth ¥1 trillion each, issued by Sumitomo Mitsui Banking Corporation and UFJ Bank ahead of the end of the fiscal year-end on March 31.
Up to March 31, Moody’s said 19 out of the total 24 CDO deals in Japan were balance sheet CLOs, accounting for a total volume of about ¥5.23 trillion, or 99% of total volumes. “The surge in balance-sheet CLO issuance was driven by Japanese megabanks - including Mizuho Corporate Bank, Sumitomo Mitsui Banking Corporation and UFJ Bank - for the purposes of meeting BIS regulations,” Moody’s said.
Get similar articles delivered to your inbox
There are no comments submitted yet. Do you have an interesting opinion? Then be the first to post a comment.
Updating your subscription status
Risk IPad Apps