Capital Relief Trades
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SCI Capital Relief Trades Awards 2019
Investor of the Year: European Investment Fund
The European Investment Fund (EIF) provides an unparalleled level of support to the capital relief trades market in Europe, bringing numerous synthetic securitisations across the line. The EIF is not only a key driver of innovation, participating in numerous benchmark transactions across jurisdiction and asset class, but it has also helped open up the risk transfer market to a broader .......
News 31 October 2019
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SCI Capital Relief Trades Awards 2019
Innovation of the Year: FCT Jupiter 2019
Societe Generale’s US$3.4bn FCT Jupiter 2019 transaction has won SCI’s Innovation of the Year Award for introducing a number of ground-breaking structural innovations in connection with the redeployment of released RWA. The deal not only frees up a dedicated capital envelope, whereby capital can be reallocated in favour of positive impact finance assets, but also debuts a pricing reduction feature .......
News 30 October 2019
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SCI Capital Relief Trades Awards 2019
Impact Deal of the Year: Room2Run
As the first-ever synthetic impact securitisation with a multilateral development bank (MDB), Room2Run helped to free up vital capital for the African Development Bank (AfDB) to fund infrastructure projects across multiple African countries. As well as setting the benchmark for how risk transfer technology can be deployed innovatively and to positive effect, the transaction overcame a number of structural and .......
News 29 October 2019
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SCI Capital Relief Trades Awards 2019
Transaction of the Year: Syon Securities 2019
Lloyds Banking Group’s synthetic UK RMBS Syon Securities 2019 was motivated by prudent risk management as part of the bank’s broader plan to support the UK economy, rather than potential regulatory capital benefits. However, Syon’s innovative use of a capital relief structure to achieve those risk transfer aims, combined with the deal’s scalability for the issuer and repeatability for .......
News 28 October 2019
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SCI's latest podcast is now live!
The editorial team discuss the hottest topics in securitisation today...
In this month's exciting edition of the SCI podcast, the team talks about standardised banks and the barriers they face when looking to enter the risk transfer market, Santander's latest securitisation of Finnish auto loans, Kimi 8, as well as a company that is looking to help companies in emerging markets tap synthetic securitisation to optimise their balance sheets.
Don't .......
News 25 October 2019
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SCI Capital Relief Trades Awards 2019
Arranger of the Year: Credit Suisse
Credit Suisse is SCI’s Arranger of the Year in recognition of the variety of structures it has placed and the breadth of its investor base. Since September 2018, the bank has arranged five capital relief trades providing protection on approximately €15bn of reference assets with an aggregate tranche size of approximately €850m.
The transactions included both equity and .......
News 25 October 2019
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SCI Capital Relief Trades Awards 2019
Issuer of the Year: Santander
Santander was one of the banks that actively participated in efforts to extend the STS designation to synthetic securitisations, which culminated in the EBA consultation paper on STS synthetics that was published in September. However, it is the Spanish lender’s prolific issuance and innovative structural achievements that render it SCI’s Issuer of the Year.
According to Steve Gandy, md and .......
News 24 October 2019
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CRE CRT inked
Innovative financial guarantee debuts
Raiffeisen has completed an approximately €95m unfunded financial guarantee that references a €1.2bn portfolio of Austrian, German, Czech and Slovak commercial real estate loans. Dubbed Roof CRE 2019, the significant risk transfer trade differs from previous Roof transactions, given that it combines assets booked in different units of the bank.
Oliver Fuerst, head of active credit management at .......
News 24 October 2019
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Risk transfer round-up - 18 October
CRT sector developments and deal news
Nordea is rumoured to be prepping a corporate capital relief trade for this year. The Nordic lender’s last risk transfer transaction - dubbed Archean I - closed in August 2016 (see SCI’s capital relief trades database).
...... News 18 October 2019Premium Content
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Best in class
SCI Capital Relief Trades Awards winners revealed
The winners of SCI’s inaugural Capital Relief Trades Awards were revealed at a ceremony last night. The selections reflect the vibrancy and innovation evident across the risk transfer market over the last 12 months and emphasise the utility of synthetic securitisation - not only as a risk management tool, but also as a way of mobilising private capital .......
News 18 October 2019
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Optimisation opportunities
Synthetic, true sale options explored for emerging markets
Qbera Capital has plans to deliver innovative balance sheet optimisation strategies to financial institutions and non-bank financial institutions (NBFIs) in emerging markets. With a particular focus on African, Middle Eastern and Indian firms, Qbera Capital is looking at the possibility of utilising various strategies, including true-sale and synthetic securitisation methods, to help these companies achieve both risk transfer and funding .......
News Analysis 16 October 2019
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Positive impact
Capital allocation factor debuts
Societe Generale has completed an innovative risk transfer transaction that, for the first time, incorporates a capital allocation factor that incentivises additional positive impact finance lending. Mariner Investment Group has purchased the junior tranche of notes through its IIFC platform.
Dubbed Jupiter, the US$3.4bn transaction references more than 250 loans in over 40 countries across a variety of .......
News 16 October 2019
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Meaningful constituent?
Perceived difference between IRB, standardised banks narrowing
Recent transactions imply that the difference between how IRB and standardised banks are perceived by capital relief trade market participants is narrowing. However, opinions vary on whether standardised banks can ever become a meaningful constituent in significant risk transfer, given the barriers to entry that remain.
Synthetic securitisation only became a viable option for standardised banks when the .......
News Analysis 14 October 2019
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Framework focus
EBA synthetics paper welcomed, despite concerns
Risk transfer market participants have welcomed the EBA’s discussion paper on STS synthetics (SCI 25 September); in particular, the standardisation that it espouses for capital relief trades. However, concerns remain over the absence of any preferential capital treatment, the collateral requirements and the banning of synthetic excess spread.
Leanne Banfield, counsel at Linklaters, explains: “The discussion at .......
News Analysis 11 October 2019
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CRT line-up finalised
Awards ceremony to round off risk transfer event
The line-up for SCI’s 5th Annual Capital Relief Trades Seminar on 17 October has been finalised. Hosted by Allen & Overy, the event will take place at One Bishops Square, London and features for the first time an industry awards ceremony. Other highlights include a fireside chat between Clifford Chance’s Jessica Littlewood and the EBA’s Christian Moor, as well .......
News 11 October 2019
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Risk transfer round-up - 10 October
Capital relief trade sector developments and deal news
RBS is rumoured to be readying a capital relief trade backed by project finance loans. According to SCI data, this would be the issuer’s first project finance risk transfer transaction (see SCI’s capital relief trades database).
The most active issuer of project finance CRTs has been Santander. SCI data note that five out of the seven such ......
News 10 October 2019Premium Content
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Synthetic RMBS debut
Non-GSE CRT deal prepped
JPMorgan Chase Bank (JPMCB) is marketing what is believed to be the first rated synthetic mortgage risk transfer transaction originated by a US bank – Chase Mortgage Reference Notes 2019-CL1. The deal utilises tranched CDS documentation to transfer credit risk to noteholders, with principal payments based on the actual payments received from a reference pool consisting of 979 prime-quality .......
News 10 October 2019
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Rating challenges
Limited appetite for rated senior mezz
Issuers have typically refrained from seeking ratings on the senior mezzanine tranches of dual-tranche capital relief trades, due to stricter eligibility criteria, cost considerations and the fact that most SRT investors don’t need ratings. Nevertheless, rating senior mezzanine tranches is one way of attracting new investors to the sector (SCI 26 January 2018), thereby helping to expand the .......
News Analysis 7 October 2019
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Risk transfer round-up - 4 October
Capital relief trade sector developments and deal news
HSBC is rumoured to be readying a corporate capital relief trade for 4Q19. According to SCI data, the lender’s last risk transfer transaction was completed in December 2015 and was dubbed Metrix Portfolio Distribution (see SCI’s capital relief trades database).
...... News 4 October 2019Premium Content
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Spanish SRT finalised
Santander completes full-stack auto ABS
Santander has priced a €555.5m true sale significant risk transfer transaction dubbed Santander Consumer Spain Auto 2019-1. The full-stack deal has been driven by new regulatory guidelines on excess spread and adds to this year’s healthy flow of full-stack SRT issuance (SCI passim).
The transaction consists of €440m class A notes (which priced at 45bp), €57.7m class B notes (85bp), .......
News 4 October 2019
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Nascent stages
CRT mezz investor base needs time to develop
The pace of growth of the risk transfer market is likely to be tied to the development of the synthetic mezzanine risk market, which is currently at a nascent stage (SCI 9 August). Traditional capital relief trade investors have limited appetite for mezz, as absolute returns are low, even though the risk/reward proposition is compelling.
“There is .......
News 3 October 2019