Merrill Lynch Japan has been appointed by the Tokyo metropolitan government as structuring advisor for a proposed collateralized loan obligation (CLO) aimed at financing small- and medium-sized businesses in the city.

Under the plan, credit associations known as shinkin banks throughout Tokyo will originate loans, which will be transferred to Shinkin Trust Bank, the trustee of the transaction. Shinkin Trust will issue trust certificates to a special purpose company that will then issue notes backed by the cashflows on the loans, said a securitization banker at Merrill.

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