Bankers have a proposition for Japanese investors: Why don't youput your money into bundles of junk-rated U.S. loans?
It'll be a classic win-win, as the thinking goes. For Japaneseinstitutions tired of decade after decade of paltry returns onJapanese government debt, they'll earn higher yields; and for theriskiest U.S. companies, they'll get access to a cheaper source offinancing. What could possibly go wrong?
To make it easier for Japanese investors to get to this U.S.debt, bankers have repackaged a dollar-denominated collateralizedloan obligation (CLO) into yen-denominated bonds, using derivativesto hedge out risk related to currency fluctuations.
Continue Reading for Free
Register and gain access to:
- Thought leadership on regulatory changes, economic trends, corporate success stories, and tactical solutions for treasurers, CFOs, risk managers, controllers, and other finance professionals
- Informative weekly newsletter featuring news, analysis, real-world cas studies, and other critical content
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the employee benefits and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
*May exclude premium content
Already have an account?
Sign In Now
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
