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.

• Goals aligned

  Insurers target dual-tranche CRTs

  Insurance firms are targeting mezzanine tranches in dual-tranche capital relief trades as banks warm...

  News Analysis    22 March 2019

• Latest podcast now available

  CRT themes and a Dutch RMBS first discussed

  In this month's podcast, we explore some interesting themes within the CRT market: namely,&a...

  News    15 March 2019

• Control rights

  Synthetic CRE investors gain comfort

  Investors in risk transfer transactions referencing commercial real estate loans have become more co...

  News Analysis    8 March 2019

• Creative approach

  Definition of CRT criteria evolving

  As the drivers for banks to pursue risk transfer transactions have broadened over the last few years...

  News Analysis    7 March 2019

• Deleveraging deal

  Bari SRT performance consistent with expectations

  Scope has determined that the performance of Banca Popolare di Bari’s last significant ris...

  News    6 March 2019

• Line-up finalised

  CRT event to include two workshops

  The line-up for SCI’s 3rd Annual Risk Transfer & Synthetics Seminar on 12 March ha...

  News    5 March 2019

• STS synthetics pending

  EBA to publish report by year-end

  The EBA is expected to publish a report on STS synthetic securitisations by year-end, which will the...

  News Analysis    1 March 2019

• Downward drift

  Low default trend continues

  Global corporate defaults fell in 2018 in advanced markets and were stable in emerging markets. The...

  News    1 March 2019

• New fund for CDS recruit

  Company hires and sector developments

  ABL acquisition Benefit Street Partners affiliate Business Development Corporation of America has a...

  Market moves    28 February 2019

• Maintaining flexibility

  Fiona Walden, vp, credit and financial lines at RenaissanceRe, answers SCI's questions

  Q: How and when did RenaissanceRe became involved in the securitisation market? A: We were set up 2...

  The Structured Credit Interview    22 February 2019

• Risk transfer round-up - 15 February

  CRT sector developments and deal news

  The first quarter of this year is expected to see reduced capital relief trade issuance, due to ESMA...

  News    15 February 2019

• Risk transfer round-up - 1 February

  CRT sector developments and deal news

  Bank of Montreal has printed a US and Canadian leveraged loan capital relief trade dubbed Manitoulin...

  News    1 February 2019

• Minerva closed

  Innovative guarantee completed

  Banca Nazionale Del Lavoro has closed a €100m mezzanine guarantee with the EIF. Dubbed Mine...

  News    25 January 2019

• Risk transfer round-up - 25 January

  CRT sector developments and deal news

  Deutsche Bank issued a leveraged loan capital relief trade in December among a flurry of risk transf...

  News    25 January 2019

• CLOs retain top ranking

  Quarterly SCI data update

  CLOs remained the top asset class in terms of deal count for European and US new issuance in 4Q18, a...

  News Analysis    24 January 2019

• CRT growth continues

  Tighter pricing trend points to expanding market

  The year 2018 saw a flurry of capital relief trades referencing various asset classes that were pric...

  News Analysis    18 January 2019

• SCI Start the Week - 14 January

  A review of securitisation activity over the past seven days

  Transaction of the week BBVA has completed an innovative transaction that synchronises credit event...

  News    14 January 2019

• Risk transfer round-up - 11 January

  CRT sector developments and deal news

  The fourth quarter of 2018 saw a slew of risk transfer deals typical of year-end issuance (SCI 21 De...

  News    11 January 2019

• Credit events synchronised

  BBVA completes innovative IFRS 9 hedge

  BBVA has completed an innovative transaction that synchronises credit events with IFRS 9 lifetime ex...

  News Analysis    11 January 2019

• Mezz opportunity

  Insurer interest in risk transfer on the rise

  The facility recently inked by Texel Finance and Liberty Specialty Markets (SCI 9 November 2018) sig...

  News Analysis    10 January 2019

• Risk-sharing boost

  Cajamar SRT sets tone for standardised banks

  BCC Grupo Cajamar has completed a €972.1m Spanish true sale significant risk transfer trans...

  News Analysis    9 January 2019