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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.


  • Risk transfer round-up - 18 October

    CRT sector developments and deal news

    Nordea is rumoured to be prepping a corporate capital relief trade for this year. The Nordic lender&...

    News    18 October 2019
  • Best in class

    SCI Capital Relief Trades Awards winners revealed

    The winners of SCI’s inaugural Capital Relief Trades Awards were revealed at a ceremony la...

    News    18 October 2019
  • Optimisation opportunities

    Synthetic, true sale options explored for emerging markets

    Qbera Capital has plans to deliver innovative balance sheet optimisation strategies to financial ins...

    News Analysis    16 October 2019
  • Positive impact

    Capital allocation factor debuts

    Societe Generale has completed an innovative risk transfer transaction that, for the first time, inc...

    News    16 October 2019
  • SCI Start the Week - 14 October

    A review of securitisation activity over the past seven days

    SCI CRT Seminar The line-up for SCI's 5th Annual Capital Relief Trades Seminar on 17 October has be...

    News    14 October 2019
  • Meaningful constituent?

    Perceived difference between IRB, standardised banks narrowing

    Recent transactions imply that the difference between how IRB and standardised banks are perceived b...

    News Analysis    14 October 2019
  • Framework focus

    EBA synthetics paper welcomed, despite concerns

    Risk transfer market participants have welcomed the EBA’s discussion paper on STS syntheti...

    News Analysis    11 October 2019
  • CRT line-up finalised

    Awards ceremony to round off risk transfer event

    The line-up for SCI’s 5th Annual Capital Relief Trades Seminar on 17 October has been fina...

    News    11 October 2019
  • Risk transfer round-up - 10 October

    Capital relief trade sector developments and deal news

    RBS is rumoured to be readying a capital relief trade backed by project finance loans. According to...

    News    10 October 2019
  • Synthetic RMBS debut

    Non-GSE CRT deal prepped

    JPMorgan Chase Bank (JPMCB) is marketing what is believed to be the first rated synthetic mortgage r...

    News    10 October 2019
  • SCI Start the Week – 7 October

    A review of securitisation activity over the past seven days

    Transaction of the week RMF is marketing its first private RMBS backed by jumbo proprietary reverse...

    News    7 October 2019
  • Rating challenges

    Limited appetite for rated senior mezz

    Issuers have typically refrained from seeking ratings on the senior mezzanine tranches of dual-tranc...

    News Analysis    7 October 2019
  • Risk transfer round-up - 4 October

    Capital relief trade sector developments and deal news

    HSBC is rumoured to be readying a corporate capital relief trade for 4Q19. According to SCI data, th...

    News    4 October 2019
  • Spanish SRT finalised

    Santander completes full-stack auto ABS

    Santander has priced a €555.5m true sale significant risk transfer transaction dubbed Santa...

    News    4 October 2019
  • Nascent stages

    CRT mezz investor base needs time to develop

    The pace of growth of the risk transfer market is likely to be tied to the development of the synthe...

    News    3 October 2019
  • SCI Start the Week - 30 September

    A review of securitisation activity over the past seven days

    Transaction of the week FirstKey Mortgage is marketing the first securitisation backed by manufactu...

    News    30 September 2019
  • Portfolio-based cover opportunities eyed

    New reinsurance platform to harness synthetic ABS overlap opportunities

    BPL Global is to launch a new reinsurance platform and has hired Gregory King-Underwood as director...

    News Analysis    27 September 2019
  • STS synthetics framework unveiled

    EBA publishes landmark consultation

    The EBA has published its long-awaited discussion paper on its proposals for an STS framework for sy...

    News Analysis    25 September 2019
  • Legacy SRT call possibility

    Regulatory triggers could lead to SRTs being called next year

    Banks could potentially call legacy capital relief trades (CRTs) next year, as higher senior risk we...

    News Analysis    20 September 2019
  • Case for STS synthetics outlined

    Benefits of STS on synthetics clear, but objections could be raised

    The EBA is set to release its discussion paper on the application of the STS label to synthetic secu...

    News Analysis    20 September 2019
  • Risk transfer round-up - 20 September

    CRT sector developments and deal news

    Standard Chartered is rumoured to be prepping a corporate capital relief trade for 4Q19. The bank&am...

    News    20 September 2019