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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 participation programme agreed

    Sector developments and company hires

    CLO vulnerabilities eyed The Financial Stability Board has published a report assessing the financi...

    Market moves    19 December 2019
  • UK auto SRT finalised

    Santander completes retained first-loss deal

    Santander has completed a synthetic securitisation of UK auto loans. Dubbed Motor Securities 2018-1,...

    News    18 December 2019
  • Economic efficiency

    Standardised bank SRT pros, cons weighed

    Various factors should be considered when contemplating whether to execute a significant risk transf...

    News Analysis    16 December 2019
  • SCI Start the Week - 16 December

    A review of securitisation activity over the past seven days

    Transaction of the week The National Bank of Greece has completed its first secured non-performing...

    News    16 December 2019
  • Risk transfer round-up - 16 December

    CRT sector developments and deal news

    Deutsche Bank is rumoured to be readying a capital relief trade from the CRAFT programme. The last C...

    News    16 December 2019
  • Mixed motivations

    THRP sets stage for US bank CRT

    A combination of macro and micro factors are understood to have influenced the issuance of JPMorgan&...

    News    13 December 2019
  • CET1 ratios eyed

    Disposals, securitisations to protect bank capital

    European bank CET1 ratios have stabilised over recent years, as Basel 3 capital requirements and oth...

    News Analysis    12 December 2019
  • SCI Start the Week - 9 December

    A review of securitisation activity over the past seven days

    Transaction of the week NIBC recently priced the first fully-compliant ESG CLO, North Westerly VI,...

    News    9 December 2019
  • Mutual agreement

    BPPB SRT debuts

    Further details have emerged about the EIF and Banca Popolare di Puglia e Basilicata’s (BP...

    News    9 December 2019
  • Grattan refinanced

    Bank of Ireland completes CRT

    Bank of Ireland has originated a €265m funded and unfunded financial guarantee that referen...

    News    6 December 2019
  • Confidentiality issues persist

    Disclosure questions unresolved for CRT market

    ESMA’s updated questions and answers on the Securitisation Regulation, clarifies different...

    News    2 December 2019
  • SCI Start the Week - 2 December

    A review of securitisation activity over the past seven days

    Transaction of the week Credit Agricole is marketing a securitisation of Dutch consumer loans origi...

    News    2 December 2019
  • Full-stack debut

    BDK completes first auto SRT

    Bank Deutsches Kraftfahrzeuggewerbe (BDK) has debuted its first full-stack capital relief trade. Dub...

    News    2 December 2019
  • Spanish SRT inked

    Banco Cetelem completes full-stack auto ABS

    Banco Cetelem has completed the first full-stack Spanish auto significant risk transfer transaction...

    News    2 December 2019
  • Risk transfer round-up - 28 November

    Risk transfer round-up - 28 November

    HSBC is rumoured to be readying a UK and European corporate loan SRT. This is one of two rumoured co...

    News    2 December 2019
  • Italian SRT inked

    UBI Banca seals the triple

    UBI Banca has completed its third capital relief trade (CRT) following its inaugural transaction two...

    News    26 November 2019
  • SCI Start the week - 25 November

    A review of securitisation activity over the past seven days

    Transaction of the week Hercules tapped Alpha Bank is set to securitise a €12bn mixed p...

    News    25 November 2019
  • Template concerns

    Paper proposes mitigants for unintended consequences

    Major risk-sharing transaction investor PGGM has published a position paper on the ESMA securitisati...

    News Analysis    22 November 2019
  • Ramping up

    Standard Chartered boosts corporate issuance

    Standard Chartered has completed a US$135m CLN that references a US$1.5bn portfolio of US and Europe...

    News    21 November 2019
  • US CRT pick-up?

    Volumes to remain restricted to large banks

    The US capital relief trades market is witnessing a long-awaited uptick, with three deals reportedly...

    News Analysis    18 November 2019
  • SCI Start the Week - 18 November

    A review of securitisation activity over the past seven days

    Transaction of the week UniCredit has completed what is believed to be the largest European ABS tra...

    News    18 November 2019