Issues of CDOs in Japan rose eight-fold in 2002 as Japanese banks restructured their balance sheets. Or so says the Moody’s Investors Service, which today released a special report titled 2002 Japanese CDO Review and 2003 Outlook.
According to the report, Japan’s CDO market hosted 28 transactions worth JPY 3.14 trillion (approximately US$ 26 billion), a new record, and about 8 times the volume of 2001. Behind the rise was a surge in the launch by major Japanese banks of balance-sheet CLOs, and once subordinated tranches and super senior classes – unrated in most cases – are included, the total reaches approximately JPY 4.1 trillion.