TOKYO : Japan's leveraged loan market remains solid despite a global market lull, an executive at MUFG Bank said, as the country's top bank continues to expand its leveraged lending business to back a growing number of private equity buyouts.
While soaring borrowing costs in other major markets have slowed loan-backed acquisitions in the United States and Europe, Japan's central bank has not joined the global cycle of interest rate rises. Major deals included KKR & Co Inc's $5.2 billion buyout for Hitachi Ltd's logistics arm and Bain Capital's $3.1 billion acquisition of Olympus Corp's microscope unit.
The executive said the Japanese leveraged loan market itself is less susceptible to rate swings than Western counterparts as it's largely dominated by top domestic banks, which tend to hold onto the bulk of debts on their books and provide continuous support to target companies.