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.

  • Deploying capital

    Chris Redmond, global head of credit at Willis Towers Watson, answers SCI's questions

    Q: How and when did Willis Towers Watson become involved in the securitisation market? A: Willis To...

    The Structured Credit Interview    20 February 2017
  • Cautious optimism

    Secondary CRT market gaining momentum

    The secondary market for capital relief trades has been growing alongside issuance of syndicated dea...

    News Analysis    20 January 2017
  • Bilateral CLN closed

    Further details have emerged of Deutsche Bank's recent capital relief trade, Gate 2016-1 (SCI 3 Janu...

    News    16 January 2017
  • Record SRT deal launched

    Further details have emerged about Grafton CLO 2016-1, Santander's largest post-crisis corporate loa...

    News    12 January 2017
  • Green SRT emerging

    The final panel at SCI's recent Capital Relief Trades Seminar struck an optimistic note regarding de...

    News    11 January 2017
  • A nebulous concept

    Challenges in defining the cost of capital highlighted

    The challenges in defining the cost of capital were discussed extensively at SCI's recent Capital Re...

    Talking Point    11 January 2017
  • Cash versus synthetic weighed

    Balance sheet securitisations - whereby balance sheet relief is achieved via true sale &am...

    News    4 January 2017
  • Slew of risk transfer trades close

    A handful of capital relief trades closed in late December, including an unusual deal referencing a...

    News    3 January 2017
  • Spanish SRT deal completed

    Banco Santander has closed its first Spanish unsecured consumer loan significant risk transfer secur...

    News    23 December 2016
  • EIF in UK CRT first

    The EIF has signed a securitisation guarantee deal with RBS, providing capital relief on a £...

    News Round-up    22 December 2016
  • Proving compliance

    Demonstrating significant risk transfer discussed

    How to demonstrate significant risk transfer (SRT) was a hot topic at SCI's Capital Relief Trades Se...

    Talking Point    19 December 2016
  • Learning by doing

    Issuers weigh capital relief opportunities and challenges

    Capital relief trades, also called risk sharing trades, can provide issuing banks with several advan...

    News Analysis    16 December 2016
  • Second Salisbury prices wider

    Lloyds has closed a capital relief trade referencing a £2.1bn granular portfolio of UK SME...

    News    14 December 2016
  • EMEA SME ABS trends to continue

    EMEA SME ABS market activity and deal characteristics will be driven by a broad array of originators...

    News Round-up    30 November 2016
  • CRR boost?

    The European Commission's CRR 2 reforms, which it unveiled last week, include proposals that appear...

    News    29 November 2016
  • Innovative Griffon deal welcomed

    Griffon Funding - which Barclays closed in September - has been hailed as an inn...

    News    28 November 2016
  • CRT line-up finalised

    Panellists are being finalised for SCI's latest Capital Relief Trades Seminar, which is being held o...

    News Round-up    17 November 2016
  • Converging approach?

    Current status of capital relief trades discussed

    Representatives from Chorus Capital, Citi and Clifford Chance recently discussed the current status...

    Talking Point    2 November 2016
  • Implicit support guidelines published

    The EBA has published guidelines on implicit support for securitisation transactions that aim to cla...

    News Round-up    4 October 2016
  • CRT conference line-up confirmed

    Panellists have been confirmed for SCI's Capital Relief Trades Seminar, which is being held tomorrow...

    News Round-up    14 September 2016
  • Capital relief trades webinar due

    SCI is hosting a complimentary webinar on the current status of capital relief trades. The event is...

    News Round-up    6 September 2016