Japan¡¯s biggest life insurer is considering taking on a little more risk with its investments in collateralized loan obligations (CLOs), as it looks for ways to eke out better returns abroad.
Nippon Life Insurance last year joined other 911±¬ÁÏÍø institutions that are buying CLOs ¡ª financial products made up of leveraged corporate loans ¡ª to diversify investments. They have typically focused on the highest-rated notes, which are seen as the least risky but offer lower returns.
"There could be a situation where we cannot secure enough spreads with the triple A-rated tranche,¡± Nippon Life Chief Investment Officer Keisuke Kawasaki said in an interview. "If that happens, we¡¯re thinking about enhancing the yields by including some double A-rated ones.¡±
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