Japan

The Japanese Financial Services Agency (JFSA) published risk retention rules on Friday that allow Japanese investors to avoid capital charges even if they buy debt from non-risk retention compliant deals.

Barclays has prepared new issuance in Japan while it waits out this week’s Brexit drama. The yen market is proving popular among European banks, which are taking advantage of favourable conditions to make total loss-absorbing capacity (TLAC) issuance.

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.

Malaysia has closed the biggest sovereign Samurai bond in 18 years, raising ¥200bn ($1.79bn) from what could be just the first of many such deals to come.

Dollar SSA issuance is expected to pick up next week, thanks to a change in the euro/dollar basis swap that is making issuance in the currency more attractive for euro funders. There was still a smattering of dollar trades this week, including a Sofr-linked floater that broke new ground for the format.

Rating: A1/A+

Charles Pitts-Tucker has been promoted to international head of investment banking at Nomura, alongside a string of other moves at the Japanese bank.

Crédit Agricole put out price thoughts for a non-preferred senior bond in the Euroyen market on Wednesday, getting the ball rolling on its third public debt offering in the space of a week.

The anchoring of European CLOs by Japanese investors, one of which has been claiming the senior notes on most euro CLOs issued in 2019, is likely to continue until at least mid-April, despite the year end for Japanese banks at the end of March, which often slows the market. ICG is the latest manager to launch an issue, with Goldman leading the deal.

Société Générale is enjoying a record year in the Japanese debt markets, after selling its debut deal in Euroyen format late on Friday. The transaction received strong demand from investors, even though it was marketed at the same time as another total loss-absorbing (TLAC) eligible transaction from ING Groep.

UBS is re-balancing its corporate finance business to end its reliance on its Financial Institutions Group with impressive results, writes David Rothnie.

Representatives from the Loan Syndication and Trading Association (LSTA) and the CLO manager community returned from Japan this week following meetings with the Japanese Financial Services Agency, where they made a case for exempting broadly syndicated loan (BSL) CLOs from proposed risk retention rules.