CLO Comeback by Japan’s Nochu Adds Fuel to Floating-Rate Fire

The bank for Japanese farmers, fisheries and forestry companies that once ruled the $1 trillion market for collateralized loan obligations is back.

Norinchukin Bank’s return could set up a tough battle with U.S. banks and others that filled the void during a two-year absence, boosting demand for the floating-rate debt -- which is attractive as an inflation hedge -- even as issuance is expected to decline.

Nochu, as the company is known, is a cooperative bank for Japanese agriculture businesses that lends globally. It was the world’s biggest CLO buyer -- at its peak scooping up almost half the ...