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.


  • Consumer boost

    Santander completes innovative SRTs

    Santander has completed two synthetic securitisations of consumer loans. The transactions are the ba...

    News    16 January 2020
  • Hong Kong ABS recommendations released

    Sector developments and company hires

    Alternative risk transfer Arthur J Gallagher has increased its interest in Capsicum Reinsurance B...

    Market moves    14 January 2020
  • SCI Start the Week - 13 January

    A review of securitisation activity over the past seven days

    Transaction of the week Goldman Sachs is marketing River Green Finance 2020, which is expected to b...

    News    13 January 2020
  • Landmark CLN finalised

    Santander completes undrawn RCF trade

    Santander has completed a €147m CLN that is backed entirely by undrawn corporate and financ...

    News    10 January 2020
  • Leasing guarantee

    EFL completes capital relief trade

    The EIF and Europejski Fundusz Leasingowy (EFL) have completed a synthetic securitisation of an unus...

    News    9 January 2020
  • CQS SRT finalised

    Unusual reference pool securitised

    An unusual significant risk transfer transaction referencing a €1.78bn static portfolio of...

    News    24 December 2019
  • SCI Start the Week - 23 December

    A review of securitisation activity over the past seven days

    Transaction of the week A pair of Italian non-performing loan securitisations – dubbed Fu...

    News    23 December 2019
  • MNHD plans programmatic issuance

    Sector developments and company hires

    Egyptian securitisation debuts Egyptian real estate developer Madinet Nasr Housing and Development...

    Market moves    23 December 2019
  • Nordic SRT inked

    Nordea returns with capital relief trade

    Nordea has priced a €5.1bn synthetic securitisation of Nordic corporate and SME loans. Dubb...

    News    20 December 2019
  • SCI's latest podcast is now live!

    The editorial team discuss key issues in securitisation today...

    In this episode of the SCI podcast, Mark Pelham and Corinne Smith discuss our new research report on...

    News    19 December 2019
  • Risk participation programme agreed

    Sector developments and company hires

    CLO vulnerabilities eyed The Financial Stability Board has published a report assessing the financi...

    Market moves    19 December 2019
  • UK auto SRT finalised

    Santander completes retained first-loss deal

    Santander has completed a synthetic securitisation of UK auto loans. Dubbed Motor Securities 2018-1,...

    News    18 December 2019
  • Economic efficiency

    Standardised bank SRT pros, cons weighed

    Various factors should be considered when contemplating whether to execute a significant risk transf...

    News Analysis    16 December 2019
  • SCI Start the Week - 16 December

    A review of securitisation activity over the past seven days

    Transaction of the week The National Bank of Greece has completed its first secured non-performing...

    News    16 December 2019
  • Risk transfer round-up - 16 December

    CRT sector developments and deal news

    Deutsche Bank is rumoured to be readying a capital relief trade from the CRAFT programme. The last C...

    News    16 December 2019
  • Mixed motivations

    THRP sets stage for US bank CRT

    A combination of macro and micro factors are understood to have influenced the issuance of JPMorgan&...

    News    13 December 2019
  • CET1 ratios eyed

    Disposals, securitisations to protect bank capital

    European bank CET1 ratios have stabilised over recent years, as Basel 3 capital requirements and oth...

    News Analysis    12 December 2019
  • SCI Start the Week - 9 December

    A review of securitisation activity over the past seven days

    Transaction of the week NIBC recently priced the first fully-compliant ESG CLO, North Westerly VI,...

    News    9 December 2019
  • Mutual agreement

    BPPB SRT debuts

    Further details have emerged about the EIF and Banca Popolare di Puglia e Basilicata’s (BP...

    News    9 December 2019
  • Grattan refinanced

    Bank of Ireland completes CRT

    Bank of Ireland has originated a €265m funded and unfunded financial guarantee that referen...

    News    6 December 2019
  • Confidentiality issues persist

    Disclosure questions unresolved for CRT market

    ESMA’s updated questions and answers on the Securitisation Regulation, clarifies different...

    News    2 December 2019