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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.


  • BMO SRT launched

    BMO expands mid-market exposure

    Bank of Montreal (BMO) has completed a five-year financial guarantee that references US and Canadian...

    News    26 July 2019
  • Benchmark SRT inked

    Bank of Scotland completes unusual synthetic UK RMBS

    Bank of Scotland has launched its first post-crisis synthetic UK RMBS. Dubbed Syon Securities 2019,...

    News Analysis    25 July 2019
  • Risk transfer round-up - 24 July

    CRT sector developments and deal news

    Banca Popolare dell ‘Alto Adige is believed to be readying a capital relief trade that is...

    News    24 July 2019
  • Revving up

    Italian auto SRT completed

    BNP Paribas has completed a €950m significant risk transfer transaction of Italian auto loa...

    News    22 July 2019
  • Squaring the circle

    CRT issuers struggling with borrower anonymity

    Capital relief trade issuers are attempting to anonymise loan-by-loan data in transactions, while si...

    News Analysis    19 July 2019
  • Risk transfer round-up - 19 July

    CRT sector developments and deal news

    Monte dei Paschi di Siena is rumoured to be prepping an Italian SME significant risk transfer transa...

    News    19 July 2019
  • Operational issues

    CRT key steps outlined

    The operational issues involved in prepping a risk transfer transaction are often overlooked. Indeed...

    News Analysis    19 July 2019
  • Czech mate

    SME CRT inked

    The EIB, the EIF and Česká spořitelna (ČS) have inked a capita...

    News    18 July 2019
  • Risk transfer round-up - 11 July

    CRT sector developments and deal news

    Standard Chartered is believed to be readying a corporate capital relief trade that is expected to c...

    News    11 July 2019
  • New deals surge

    Quarterly SCI data update

    2Q19 saw a surge in new issuance volume across securitisation markets either side of the Atlantic. T...

    News Analysis    10 July 2019
  • SRT trio

    Santander expands SME foothold

    Santander has completed three SME significant risk transfer transactions that total €940.6m...

    News    9 July 2019
  • Auto SRT completed

    Innovative direct CLN structure debuts

    Santander has completed its first synthetic significant risk transfer transaction that references a...

    News Analysis    5 July 2019
  • Helping hand

    Refugee risk-sharing facility inked

    Dutch development bank FMO has signed a pilot bilateral risk-sharing facility under its NASIRA progr...

    News Analysis    4 July 2019
  • Increasing capacity

    Bridging the CRT gap for insurers

    Greater involvement from insurers in capital relief trades should improve any capacity constraints t...

    News Analysis    3 July 2019
  • Rarely-seen synthetic securitisation revealed

    Transaction references unusual pool of US auto loans

    Santander has issued a rare synthetic securitisation referencing a collateral pool of US pr...

    News    2 July 2019
  • Guarantee inked

    Banco BPM prints first capital relief trade

    The EIF is taking on the risk of Banco BPM’s €55m mezzanine guarantee in connecti...

    News    28 June 2019
  • Compliance challenges

    STS requirements raise regulatory liability concerns

    The securitisation market now appears to be embracing the new Securitisation Regulation and adapting...

    News Analysis    28 June 2019
  • Corporate ramp-up

    Standard Chartered steps up corporate CRT issuance

    Standard Chartered has completed a risk transfer transaction that references a US$1bn portfolio of c...

    News    21 June 2019
  • Risk transfer round-up - 14 June

    CRT sector developments and deal news

    Standard Chartered is believed to have priced a corporate capital relief trade this week. The bank&a...

    News    14 June 2019
  • Risk transfer round-up - 7 June

    CRT sector developments and deal news

    Santander is believed to be readying three SME significant risk transfer transactions, along with a...

    News    7 June 2019
  • MRT potential

    Reinsurer opportunities eyed

    The mortgage risk transfer (MRT) programme in the US has the potential to rival natural catastrophe...

    News Analysis    6 June 2019