Japan’s Norinchukin Bank bought more than ￡2 billion (US$2.9 billion) of UK mortgage-backed bonds sold by Cerberus Capital Management, people familiar with the matter said.
The cooperative lender, which serves as the central financial institution for Japanese farmers and fisherman, acquired senior-ranking notes in a ￡6.1 billion deal that priced earlier this month, said the people, who asked not to be identified because they were not authorized to talk about it.
Cerberus sold the bonds secured by mortgages from failed UK lender Northern Rock PLC, which it acquired last year.
Japanese investors are replacing their bond holdings in favor of riskier assets abroad as negative yields erode the appeal of Japanese government bonds.
Eight of 11 Japanese regional banks surveyed by Bloomberg last month said they had begun or were considering asset reallocation, with foreign bonds and real-estate investments among the most popular products.
Masahiro Mikami, a Tokyo-based spokesman for Norinchukin Bank, declined to comment on whether the bank had bought the bonds.
Officials for Cerberus and Morgan Stanley, which arranged the transaction — known as Towd Point Mortgage Funding 2016-GR1 — also declined to comment on the allocation of the deal.
BIG DEAL
The transaction was the largest sale of asset-backed debt in Europe in more than nine years, people familiar with the matter said on April 5.
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