Citigroup Selling Fund for Japan’s Local Banks to Hedge JGB Risk
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Citigroup Inc. started selling a fund for Japanese regional banks to hedge against the risk of a decline in the value of their government bond holdings as the world’s biggest public debt swells.
The U.S. bank is targeting Japan’s 106 local lenders and plans to raise as much as 200 billion yen ($2.5 billion), Manabu Miyamae, the head of regional sales at Citigroup Global Markets Japan Inc., said in an interview in Tokyo. The fund is the first of its kind to hedge such risk through yen interest-rate swaps, according to Citigroup, the only distributor of the product.