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.


  • SCI Start the Week - 27 July

    A review of securitisation activity over the past seven days

    Last week's stories Carrots and sticks 'Wide-ranging and ambitious' recommendations welcomed ...

    News    27 July 2020
  • 'Quick fix' for NPE, synthetic securitisation

    Sector developments and company hires

    ‘Quick fix’ for NPE, synthetic securitisation The European Commission has adopt...

    Market moves    24 July 2020
  • Qualitative approach?

    Covid complicating CRT analytical processes

    The Covid-19 fallout has complicated further the analytical process in connection with capital relie...

    News Analysis    24 July 2020
  • Issuance boost

    Full-stack SRTs unlocked

    BBVA and Santander have reopened the full-stack significant risk transfer market with the issuance o...

    News Analysis    24 July 2020
  • Second CLN references WaMu loans

    Sector developments and company hires

    Second CLN references WaMu loans JPMorgan is in the market with its second public synthetic RMBS, C...

    Market moves    21 July 2020
  • Carrots and sticks

    'Wide-ranging and ambitious' recommendations welcomed

    The recommendations put forward by the High Level Forum on Capital Markets Union (CMU) last month ha...

    News Analysis    21 July 2020
  • SCI Start the Week - 20 July

    A review of securitisation activity over the past seven days

    FREE - CRT modelling panel The next in SCI's series of capital relief trades virtual debates is bei...

    News    20 July 2020
  • Risk transfer round up - 15 July

    CRT sector developments and deal news

    Credit Agricole is rumoured to be readying a corporate capital relief trade that is expected to clos...

    News    15 July 2020
  • Risk transfer return

    Intesa debuts post-Covid Italian SRT

    Intesa Sanpaolo has returned to the synthetic securitisation market with a new transaction from its...

    News Analysis    15 July 2020
  • Fannie takes a step back

    As Freddie issues a new STACR, Fannie revises CRT approach due to new capital rules

    Uncertainty surrounding the impact of the re-proposed capital rules for the GSEs released by the Fed...

    News Analysis    14 July 2020
  • ACIS activated

    Freddie Mac brings first ACIS CRT deal since March

    Following its recent re-opening of the CRT bond market with a $1.1bn STACR deal, Freddie Mac last Fr...

    News    13 July 2020
  • SCI Start the Week - 13 July

    A review of securitisation activity over the past seven days

    Last week's stories Arch restarts MILNs Relaunched Bellemeade Re 2020-1 priced Collection boo...

    News    13 July 2020
  • Risk transfer round up - 10 July

    CRT sector developments and deal news

    Commerzbank is rumoured to be readying a corporate capital relief trade that is expected to close in...

    News    10 July 2020
  • Arch restarts MILNs

    The relaunched Bellemeade Re 2020-1 from Arch Capital, priced at the end of last week, secured more...

    News Analysis    9 July 2020
  • Restructuring events?

    Uncertainty over CRE values weighs on CRTs

    Restructuring credit events in capital relief trades backed by commercial real estate loans will lik...

    News Analysis    9 July 2020
  • Polish SRT inked

    Santander completes capital relief trade

    Santander has completed a synthetic securitisation of Polish leasing receivables with the EIF. The t...

    News    9 July 2020
  • CPR for CRT from Freddie

    Freddie Mac's new upsized STACR shows market is healthy

    Freddie Mac has demonstrated that reports of the death of the CRT bond market are greatly exaggerate...

    News Analysis    9 July 2020
  • Risk transfer round-up - 3 July

    CRT sector developments and deal news

    Details have emerged of three corporate capital relief trades issued by Barclays last month. The ris...

    News    3 July 2020
  • Spanish SRT inked

    BBVA launches capital relief trade

    BBVA has completed an €87m mezzanine guarantee with the EIF. Dubbed Vela Four, the transact...

    News Analysis    3 July 2020
  • Fast amortisation

    SSPAIN deleveraging highlighted

    Scope Ratings has published a monitoring report for Santander’s 2019 US auto significant r...

    News    2 July 2020
  • Risk transfer round-up - 1 July

    CRT sector developments and deal news

    NatWest is rumoured to be readying a capital relief trade backed by mid-market corporate loans for 3...

    News    1 July 2020