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.

• Embracing a tactical approach

  David Moffitt, head of tactical investment opportunities at LibreMax Capital, answers SCI's question...

  The Structured Credit Interview    22 December 2017

• SRT investor concerns disclosed

  AFME, in association with the International Association of Credit Portfolio Managers (IACPM), has re...

  News    21 December 2017

• Landmark shipping SRT completed

  Further details have emerged of Nord LB's landmark shipping significant risk transfer trade (SCI 8 D...

  News    20 December 2017

• IFRS 9 volatility persists

  The Bank of England did not disclose any data on the capital impact of IFRS 9, following the recent...

  News Analysis    20 December 2017

• Risk transfer round-up - 15 December

  Barclays has returned to the capital relief trade market with another Colonnade transaction. Colonna...

  News    15 December 2017

• Basel 4 proportionality expected

  The Basel Committee last week finalised the long-awaited Basel 4 reforms (SCI 8 December). The propo...

  News Analysis    14 December 2017

• SCI Start the Week - 11 December

  A look at the major activity in structured finance over the past seven days

  Pipeline A mixed bag of securitisations remained in the pipeline by the end of last week. ABS and C...

  News    11 December 2017

• Risk transfer round-up - 8 December

  Nord LB has this week closed a shipping significant risk transfer transaction dubbed Northvest 2. Th...

  News    8 December 2017

• Innovative financial guarantee printed

  Raiffeisen's €1.2bn ROOF Slovakia 2017, which is believed to be the first synthetic securi...

  News    5 December 2017

• Risk transfer round-up - 1 December

  Raiffeisen has completed ROOF Slovakia 2017, a €1.2bn financial guarantee from its Slovak...

  News    1 December 2017

• Risk transfer come-back

  Bank of Ireland has returned to the risk transfer market with Mespil Securities 2017-1. The lender's...

  News    29 November 2017

• SRT concerns acknowledged

  Attendees of a public hearing on the EBA's SRT discussion paper have raised concerns in relation to...

  News Analysis    24 November 2017

• Mixed portfolio SRT printed

  NatWest has originated a capital relief trade dubbed Nightingale Securities 2017-1. Unusually, the &...

  News Analysis    21 November 2017

• Risk transfer round-up - 17 November

  RBS hit the market this week with its first DBRS-rated risk transfer transaction, dubbed Nightingale...

  News    17 November 2017

• Call for increased standardisation

  Ahead of the EBA's public hearing tomorrow on its significant risk transfer (SRT) discussion paper (...

  Talking Point    16 November 2017

• AXA boosts risk transfer foothold

  AXA IM's structured finance unit raised over €1bn in total commitments for the AXA IM Part...

  News Analysis    10 November 2017

• Risk transfer round-up - 3 November

  Two US public pension funds in Arizona and Pennsylvania are rumoured to have completed a capital rel...

  News    3 November 2017

• Balance sheet optimisation continues

  Rabobank has transferred part of the risk on a €3bn commercial credit portfolio to pension...

  News Analysis    3 November 2017

• Using insurance to lay off risk

  Alan Ball and Fiona Walden, senior underwriters leading the structured risk solutions team at Libert...

  The Structured Credit Interview    2 November 2017

• Risk transfer round-up - 27 October

  Rabobank has sold a €600m portfolio of 3,600 loans that it originated. The loans all have...

  News    27 October 2017

• Proportionality for capital floors?

  The general secretary of the Basel Committee has confirmed that the "finish line is in sight" for th...

  News Analysis    23 October 2017