Japanese banks are set to turn to retail investors to sell up-coming securitizations, in recognition of the fact that it is not only institutions that are starved of higher yielding securities in Japan's low interest rate environment.
Asahi Bank, for instance, has announced plans to securitize its mortgage portfolio and from the beginning of the next financial year it will be offering the resulting bonds in units of 10 million ($93,000), with the aim of tapping wealthy retail investors. The bank estimates that the bonds will pay a coupon of 30 to 40 basis points over 10-year government bonds for maturities of five to 10 years.
Before that, however, the bank will issue MBS worth around 40 billion with the intention of selling them to other banks and insurance companies.
Daiwa Bank is also looking to target the retail sector, sources in Tokyo added. It is working with Nomura Securities to securitize housing loans worth about 30 billion, in a deal that will be launched in the next month or so, and has plans to securitize up to 200 billion over the next few years. Retail investors will be able to invest in the initial deal and those following via a fund that will be available through Daiwa branches.