Capital Relief Trades
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New ground for CRTs
Capital relief trades report now available
CRTs – in which banks transfer credit risk to non-bank investors – have become better established and more widely used. New issuance jurisdictions and greater variety of reference assets, issuers and investors have brought the market into new territory, but the regulatory environment remains challenging and there are concerns that growth could stall.
SCI has published its latest special report .......
News 23 October 2018
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Risk transfer round-up - 19 October
CRT sector developments and deal news
Credit Suisse is believed to be readying a Swiss corporate deal from its Elvetia programme. The issuer’s last Elvetia transaction was a Sfr300m ticket referencing a Sfr5bn Swiss mortgage portfolio (see SCI capital relief trades database).
...... News 19 October 2018Premium Content
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Market moves update
Company hires and sector developments in structured finance
CRT poll results
Market Moves 17 October 2018
The results from SCI’s ‘What’s in a name?’ survey are in. Delegates at SCI’s Capital Relief Trades Seminar yesterday were polled as to what the most appropriate term should be for capital relief trades from 11 different choices. Out of over 80 responses, 22% voted for ‘credit risk transfer’, 20% for ‘risk-sharing transaction’, 18% for ‘capital relief .......
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Second wave
Synthetic CRE transactions launched
Santander and NatWest have completed two commercial real estate risk transfer transactions and the market is expecting another CRE deal in 4Q18. This marks the second wave of synthetic CRE transactions, following the first wave last year, with the issuance of three transactions by Santander, Lloyds and Barclays (see SCI’s capital relief trades database). The second synthetic CRE .......
News Analysis 15 October 2018
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Risk transfer round-up - 12 October
CRT sector developments and deal news
Deutsche Bank is believed to be prepping a trade finance transaction from its TRAFIN risk transfer programme for 4Q18. The rumoured deal would be the German lender’s first TRAFIN deal in three years and follows two issuances in June from the GATE and CRAFT programme (see SCI’s capital relief trades database).
...... News 12 October 2018Premium Content
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Compliance costs
Private securitisations caught by disclosure requirements
ESMA’s regulatory technical standards (RTS) regarding securitisation disclosures (SCI 6 September) are expected to boost compliance costs for private deals, given the tight implementation timeframe of the Securitisation Regulation. Market consensus points to a transition period as one potential fix, but that option is fraught with its own challenges.
The RTS notes that all securitisations must .......
News Analysis 5 October 2018
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Risk transfer round-up - 5 October
CRT sector developments and deal news
BNP Paribas is rumoured to be readying a replacement trade for a risk transfer transaction that it completed in 2016. Dubbed Resonance II, it references a €5bn portfolio of corporate loans (see SCI’s capital relief trades database).
Dutch pension fund PGGM made a second loss investment in the 2016 deal. The new transaction is expected to close in ......
News 5 October 2018Premium Content
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Regulatory boost
Positive prospects for project finance CRTs
Santander has completed Fitzroy 2018-1 CLO, a financial guarantee and significant risk transfer transaction that references a £1.12bn portfolio of UK project finance loans. Regulatory clarity over acceptable structures could pave the way for further project finance CRT issuance in the future.
Fitzroy is Santander’s second project finance transaction in two years, following Renew Project Finance CLO 2017-1 .......
News Analysis 3 October 2018
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Risk transfer round-up - 28 September
CRT sector developments and deal news
Santander is believed to be the third capital relief trade issuer readying a commercial real estate transaction in 4Q18, along with Lloyds and RBS.
The lender’s last CRE risk transfer deal was issued in December 2017. Dubbed Red 1 Finance CLO 2017-1, the £87.1m financial guarantee referenced a £916.8m UK CRE portfolio.
The transaction printed alongside two other debut ......
News 28 September 2018Premium Content
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Risk transfer return
Standard Chartered completes trade finance CRT
Standard Chartered has printed its first capital relief trade in three years, dubbed Trade Finance Transaction 2018-1. The bank’s last public trade was a US$135m corporate CLN called Baruntse, which was completed in 2015 (see SCI’s capital relief trades database). It also rolled the Shangren III (Trade Finance) into a new deal in June.
Rated by Moody’s, .......
News 27 September 2018
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CRT line-up finalised
SCI seminar to assess regulatory threats and opportunities
The line-up for SCI’s 4th Annual Capital Relief Trades Seminar – taking place on 16 October at One Bishops Square, London – has been finalised. With Basel 4 impacting all approaches to the calculation of risk-weighted assets, credit institutions are being forced to optimise their portfolios once again. A major theme of the event is therefore how market participants .......
News 25 September 2018
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Inaugural infrastructure CRT launched
Synthetic securitisation marks global first
The African Development Bank (AfDB), alongside Mariner Investment Group, the European Commission, Mizuho and Africa50, has issued a debut US$1bn capital relief trade (CRT) backed by a pan-African portfolio of loans to infrastructure projects and financial institutions. The transaction, dubbed Room2Run, is not just a first for the AfDB, but also marks the first ever transaction of its kind between a multi-lateral .......
News Analysis 20 September 2018
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Risk transfer round-up - 14 September
CRT sector developments and deals news
Santander is rumoured to be readying a corporate CRT for 4Q18. The Spanish bank’s last corporate deal, dubbed Grafton CLO 2016, was inked in December 2016.
The CLN was priced at 10.2% and referenced a £1.25bn portfolio of primarily UK corporate loans (see SCI’s capital relief trades database).
...... News 14 September 2018Premium Content
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Brexit uncertainty highlighted
CRTs unaffected although contract continuity concerns underscored
Brexit has so far had a neutral impact on capital relief trades (CRTs) in terms of structuring and issuance. However, uncertainty remains over how EU law and the CRR will be incorporated into UK law, which is an important issue pertaining to the continuity of CRT contracts.
Steve Gandy, md and structurer at Santander Corporate and Investment Banking, comments: "So far .......
News Analysis 12 September 2018
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Risk transfer round-up - 7 September
CRT sector developments and deal news
Caixabank is rumoured to be prepping an SME significant risk transfer transaction for 4Q18. This would follow a bilateral SME trade that the issuer is believed to have completed in July.
The Spanish bank’s last confirmed transaction was Gaudi Synthetic 2015-1. The deal - inked in February 2016 - was a €121.5m CLN referencing a €2bn Spanish SME ......
News 7 September 2018Premium Content
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SME SRT completed
Intesa taps Italian government guarantee fund
Intesa Sanpaolo has completed a guarantee agreement with Fondo Centrale di Garanzia, the Italian government guarantee fund, to spur economic growth via lending to Italian SMEs. This is the fund’s first synthetic securitisation that includes mid-cap firms (with up to 499 employees), which were previously excluded from its portfolio policies.
Under the agreement, Intesa Sanpaolo will ramp up .......
News 3 September 2018
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Risk transfer round-up - 31 August
CRT sector developments and deal news
Lloyds is rumoured to be readying another commercial real estate risk transfer trade from its Wetherby programme for 4Q18. This would be the issuer’s second post-crisis synthetic CRE deal, following the issuance of Wetherby Securities 2017 last year.
Wetherby Securities 2017 was a £47.1m financial guarantee referencing a £672.9m portfolio of UK CRE. It printed alongside two other ......
News 31 August 2018Premium Content
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Moral hazard addressed
EIF completes SRT with BP Bari
The EIF has completed a guarantee agreement with Banca Popolare di Bari under the SME Initiative for Italy. The transaction consists of a number of structural features designed to reduce moral hazard.
According to Sebastian Dietzsch, associate director at Scope: “The loss claims under the guarantee are based on an expected loss calculation, which minimises cashflows between BP .......
News 17 August 2018
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Risk transfer round-up - 17 August
CRT sector developments and deal news
UBI Banca is believed to be marketing its second-ever capital relief trade. The Italian bank’s inaugural risk transfer transaction, dubbed UBI 2017 RegCap1 and inked last year, was a €100m deal referencing a €1.9bn Italian corporate portfolio (see SCI’s capital relief trades database).
...... News 17 August 2018Premium Content
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SMEs supported
Supranationals driving new credit ecosystem
A new ecosystem is gaining traction in the securitisation market, with supranational institutions stimulating organic origination by non-bank lenders. By facilitating the flow of credit and acting as a bridge to the capital markets, the prevalence of their activity – especially in the SME sector – is creating a new sub-category of transactions.
Supranational institutions are a key .......
News Analysis 16 August 2018
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Risk transfer round-up - 10 August
CRT sector developments and deal news
Banco Comercial Portugues is believed to be prepping a significant risk transfer deal for 4Q18. According to SCI’s capital relief trades database, the Portuguese lender’s last deals were Caravela SME No. 4 and Caravela SME No. 3 in May 2014 and June 2013 respectively.
Barclays is also rumoured to be working on another Colonnade deal for 4Q18, referencing UK ......
News 10 August 2018Premium Content