Observation on How COVID-19 Affected the Securitization Market in Japan

Despite the pandemic-related slowdown in economic activities, the securitization market in Japan has remained open. The sudden change in the workstyle of securitization professionals at the beginning of the year 2020 did not prevent securitization transactions from closing, nor were there any disruptions or noticeable slowdowns. This article takes a closer look at the impact of COVID-19 on the Japanese economy and the Japanese securitization market and compares this to massive natural disasters of the past. TOPICS: Fixed income and structured finance, developed markets, financial crises and financial market history Key Findings ▪ Despite the abrupt change in the working practice of the securitization professionals at the beginning of 2020, new deals kept flowing to the market. ▪ Because the pandemic is not a financial crisis, its impact on the Japanese asset securitization market differs from what was observed during the Great Financial Crisis of 2007–2009. ▪ I note some resemblance of my recent experience to my experience during the major disasters in Japan’s recent past.