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Capital Relief Trades

Capital relief trades are deals put together by banks to sell on to investors to reduce the bank's regulatory capital requirements. Such deals can take many forms, but SCI focuses on those where synthetic or securitisation structures are utilised. Those deals can be broken down into the following broad categories (deals can be combinations of these categories): CDS - credit default swaps: in the capital relief trade context, this denotes deals that utilise such instruments to transfer credit risk. CLN - credit-linked note: in the capital relief trade context, this denotes the deal is structured as a note with an embedded credit derivative. Fin gtee - Financial guarantee: a means of structuring a capital relief trade, whereby the investors benefit from a guarantee that all the issuer's obligations will be met. Funded: where a capital relief trade is understood to have been structured using a credit derivative (CDS, CLN, synthetic CDO etc) with the protection seller making an initial payment. Unfunded: where a capital relief trade is understood to have been structured without an initial payment being made under the credit derivative (CDS, CLN, synthetic CDO etc). True sale: a capital relief trade based on a cash securitisation structure rather than a synthetic securitisation structure.


  • TRAFIN relaunched

    Deutsche Bank replaces trade finance CRT

    Deutsche Bank has refinanced its TRAFIN 2015-1 deal with the issuance of a new trade finance capital...

    News Analysis    5 December 2018
  • Colonnade issuance continues

    Barclays completes corporate capital relief trade

    Barclays has completed Colonnade Global 2018-2, a US$110m financial guarantee that references a US$1...

    News    5 December 2018
  • SCI Start the Week - 3 December

    A review of securitisation activity over the past seven days

    Market commentary European ABS activity remained subdued last week, with spreads drifting wider, du...

    News    3 December 2018
  • Tighter pricing

    Latest Elvetia trade completed

    Credit Suisse has completed a Swiss corporate and SME significant risk transfer trade from its Elvet...

    News    30 November 2018
  • Tough approach

    PRA guidance puts UK CRT issuers at a disadvantage

    The UK PRA’s latest significant risk transfer guidance is putting UK capital relief trade...

    News Analysis    30 November 2018
  • Basel 4 impact will 'vary massively'

    Regulatory changes represent 'complete overhaul'

    Regulatory changes coming into effect next year will have a major impact on the way European banks c...

    News Analysis    29 November 2018
  • Risk transfer round-up - 23 November

    CRT sector developments and deal news

    Credit Suisse is believed to be pricing a risk transfer transaction from its Elvetia programme on Mo...

    News    23 November 2018
  • SCI Start the Week - 19 November

    A review of securitisation activity over the past seven days

    Market commentary Pepper Group is prepping an Australian RMBS that is expected to include a short U...

    News    19 November 2018
  • Risk transfer round-up - 16 November

    Capital relief trade sector developments and deal news

    Deutsche Bank is rumoured to be executing a bilateral trade finance capital relief trade from its TR...

    News    16 November 2018
  • Dual speed

    Standard Chartered follows with tranche carve-up

    Standard Chartered has completed a US$297.5m financial guarantee that references a US$3.5bn trade fi...

    News Analysis    14 November 2018
  • SCI Start the Week - 12 November

    A review of securitisation activity over the past seven days

    Market commentary The Dilosk No. 2 Irish legacy RMBS was in focus in the European primary market la...

    News    12 November 2018
  • Stress test

    IFRS 9 impact limited

    The EBA’s recent stress tests point to a limited capital impact from the implementation of...

    News Analysis    9 November 2018
  • Unpredictable factors

    Macro and micro challenges highlighted

    European market participants are facing three unpredictable factors in 2019, all of which will drive...

    News Analysis    9 November 2018
  • Leveraged loan CRT prepped

    Risk transfer sector developments and deal news

    Deutsche Bank is believed to be readying a leveraged loan capital relief trade for 4Q18. According t...

    News    9 November 2018
  • Risk transfer round-up - 2 November

    CRT sector developments and deal news

    Santander is believed to be readying two consumer capital relief trades and a corporate deal to prin...

    News    2 November 2018
  • SCI Start the Week - 29 October

    A review of securitisation activity over the past seven days

    Market commentary The US secondary CLO market saw heightened activity last week, with bid-lists cir...

    News    29 October 2018
  • Mixed outlook

    Risk transfer diversity set to increase

    The outlook for risk transfer issuance volumes is mixed, according to panellists at SCI’s...

    Talking Point    26 October 2018
  • CLOs in demand

    Quarterly SCI data update

    Analysis of SCI's databases underlines the significant demand for CLO paper seen in 3Q18, in...

    News Analysis    23 October 2018
  • New ground for CRTs

    Capital relief trades report now available

    CRTs – in which banks transfer credit risk to non-bank investors – have become b...

    News    23 October 2018
  • SCI Start the Week - 22 October

    A review of securitisation activity over the past seven days

    Market commentary European primary ABS activity continued to be robust last week. The BPCE Home Loa...

    News    22 October 2018
  • 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 issu...

    News    19 October 2018