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.


  • SCI Start the Week - 25 January

    A review of securitisation activity over the past seven days

    Last week's stories CMBS sailing Stormy waters ahead and astern, but the US CMBS market has avoi...

    News    25 January 2021
  • SME SRT debut

    Montepio inks first synthetic securitisation

    News    25 January 2021
  • Risk transfer return

    Commerzbank inks private SME SRT

    News    22 January 2021
  • Italian SRTs finalised

    Third-party risk-sharing prospects raised

    News Analysis    22 January 2021
  • CLO team finds new home

    Sector developments and company hires

    CLO team finds new home Fidelity International has established a new private credit capability wi...

    Market moves    20 January 2021
  • Italian green SRT debuts

    GARC programme broadened further

    News    19 January 2021
  • Euro CLO equity yields dip

    Sector developments and company hires

    Euro CLO equity yields dip Annualised equity dividend yields across European CLOs averaged 12.9% in...

    Market moves    18 January 2021
  • Risk transfer round-up - 18 January

    CRT sector developments and deal news

    News    18 January 2021
  • Capital boost

    Greek banks eye CRTs to tackle NPLs

    SCI publishes regular in-depth analysis of trends and developments across the capital relief trades...

    News Analysis    14 January 2021
  • Landmark Pan-Asian ILS launched

    Sector developments and company hires

    Landmark Pan-Asian ILS launched MS Amlin Underwriting has launched Phoenix 1 Re, the first locally...

    Market moves    11 January 2021
  • Canadian CRT in the wings

    Canadian bank said to ready CRT

    A Canadian bank, rumoured to be Scotia, is working on a new CRT trade, say well-placed market source...

    News    6 January 2021
  • CRT consolation

    It's a more credit-positive story for CRT than delinquency data indicates

    Just before Christmas, Fitch Ratings placed 372 classes of GSE-issued CRT bonds on ratings watch neg...

    News    29 December 2020
  • Agricultural SRT priced

    Lloyds finalises Fontwell II

    Lloyds has priced the second transaction from its Fontwell programme. Dubbed Fontwell II Securities...

    News    24 December 2020
  • Trilogue agreement finalised

    Excess spread concerns highlighted

    The trilogue agreement on the European Commission’s ‘quick fix’ propos...

    News Analysis    24 December 2020
  • Synthetic CMBS returns

    Barclays reopens CRE CRT market

    News Analysis    23 December 2020
  • Divergent regimes?

    STS synthetics onshoring awaited

    Formal adoption by the EU of the STS synthetics regime will not realistically occur until 1Q21, afte...

    News Analysis    22 December 2020
  • SCI Start the Week - 21 December

    A review of securitisation activity over the past seven days

    Last week's stories Agricultural SRT prepped Lloyds readies Fontwell II Baltic SRT finalised ...

    News    21 December 2020
  • Slovakian SRT finalised

    Erste Group completes synthetic ABS

    News    21 December 2020
  • Issuance forecasts lowered on TFSME extension

    Sector developments and company hires

    Issuance forecasts lowered on TFSME extension The Bank of England has extended by six months the TF...

    Market moves    18 December 2020
  • Risk transfer round-up - 18 December

    CRT sector developments and deal news

    News    18 December 2020
  • Baltic SRT finalised

    First synthetic under Luxembourg law

    News    18 December 2020