OLB executes first synthetic securitisation

OLB has executed a synthetic securitisation of corporate loans. The transaction is the German bank’s first synthetic risk transfer trade and is riding a wave of capital relief trades from the German Landesbanken.

According to market sources, the sold mezzanine tranche was sized at €50m-€70m and priced in the double digits. The transaction is the latest significant risk transfer trade from a German Landesbank following deals by Helaba, LBBW and Bayern LB last year (see SCI’s capital relief trades database).

The trade has enabled the bank to reduce its risk-weighted assets by up to €450m and improved the CET1 ratio by around 40bps. OLB plans to further grow the use of synthetic technology and use the capital released from the transaction for organic and inorganic growth, including the financing of the acquisition of Degussa Bank which was announced in September 2022. Degussa Bank serves individual and business borrowers across a broad range of financial products. The lender is a so called ‘’worksite bank’’ offering banking branches for employees on the premises of partner companies in Germany. 

Degussa Bank’s regional retail customer focus on industrial and economic centres in Western and Southern parts of Germany is complementary to OLB’s core presence in the North of Germany and adds scale to OLB’s retail banking franchise across the country. Upon completion, the acquisition will allow OLB to expand its client base by approximately 340.000 clients.

Unicredit acted as the arranger in the transaction.

Stelios Papadopoulos