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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.


  • 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
  • Nordea completes synthetic deal

    Nordea Bank has sold a synthetic securitisation referencing €8.4bn in SME and corporate lo...

    News    25 August 2016
  • Singular circumstances

    Regulatory changes fuelling rise of 'special situations'

    European banks are fundamentally changing the way they structure and sell securitisations. A rise in...

    News Analysis    25 August 2016
  • NPL renaissance

    €9bn Italian ABS provides fresh impetus

    Banca Monte dei Paschi di Siena (MPS) announced last week that it plans to offload its entire portfo...

    News Analysis    5 August 2016
  • False alarm?

    Basel CRT warning played down

    The Basel Committee caused somewhat of a stir earlier this month when it warned banks against increa...

    News Analysis    27 June 2016
  • Anchor investment proposed

    The IFC has disclosed that it is considering becoming an anchor investor in United Asia Loan Funding...

    News Round-up    23 June 2016
  • Capital-arbitrage warning issued

    The Basel Committee has warned banks against conducting capital relief trades. The regulator says su...

    News Round-up    3 June 2016
  • Spanish synthetics on the cards

    Moody's suggests that synthetic securitisations could become more popular for Spanish banks looking...

    News Round-up    6 May 2016
  • Hedging operation

    Debut oprisk ILS prepped

    Credit Suisse is prepping a unique Sfr700m ILS deal. Referred to as OperationalRe, it will utilise c...

    News Analysis    12 April 2016
  • Risky business?

    Risk-sharing deal opportunities grow

    Capital relief trade opportunities are increasing as more jurisdictions open up. However, with this...

    News Analysis    2 March 2016
  • Supply and demand

    Capital relief trade pricing, liquidity discussed

    Demand for capital relief trades has outweighed supply in recent years, driving prices lower, accord...

    News Analysis    26 February 2016
  • Synthetic disorder

    Risk transfer deals seek regulatory breakthrough

    Panellists at SCI's inaugural capital relief trades conference last month discussed regulatory devel...

    Talking Point    27 January 2016
  • Fund offers core assets access

    AXA Investment Managers has launched a fund offering investors access to the core lending activity o...

    Job Swaps    12 January 2016
  • Capital relief deal agreed

    Dutch pension fund PGGM and Banco Santander have entered into a risk-sharing transaction regarding a...

    News Round-up    12 January 2016