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.


  • ArrowMark acquires investment platform

    Sector developments and company hires

    Acquisition ArrowMark Partners has acquired the bank investment platform and assets of StoneCastle...

    Market moves    14 February 2020
  • Risk transfer round-up - 13 February

    CRT sector developments and deal news

    Mediobanca is readying another capital relief trade in addition to its inaugural SRT that will close...

    News    13 February 2020
  • Risk transfer boost

    CRT issuance breaks record

    Capital relief trade issuance broke a record in 2019, with volumes reaching €7.5bn. This ma...

    News Analysis    13 February 2020
  • CRT upgraded due to 'substantial' increase in CE

    Sector developments and company hires

    Canadian MBS ETF BMO Asset Management has launched a new stable of ETFs trading on the TSX, inclu...

    Market moves    12 February 2020
  • SCI Start the Week - 10 February

    A review of securitisation activity over the past seven days

    SCI NPL Securitisation Awards 2020 Nominations have now opened for the inaugural SCI NPL Securitisa...

    News    10 February 2020
  • Sporadic issuance

    CQS SRT wave unlikely

    BNP Paribas arranged Amalia, Banca Nazionale del Lavoro’s landmark synthetic securitisatio...

    News Analysis    10 February 2020
  • EBA reports pending

    Trapped excess spread requirement could be dropped

    The EBA will finalise its approach to significant risk transfer this year through the publication of...

    News Analysis    7 February 2020
  • Risk transfer round-up - 7 February

    CRT sector developments and deal news

    Bank of Scotland (BOS) is in the market with Syon Securities 2020, its second UK mortgage SRT (SCI 2...

    News    7 February 2020
  • Syon Securities priced

    Bank of Scotland engineers return

    Bank of Scotland has priced a seven-year financial guarantee that references a £550m portf...

    News    7 February 2020
  • SCI Start the Week - 3 February

    A review of securitisation activity over the past seven days

    Transaction of the week Goldman Sachs has completed an unusual catastrophe bond that covers the tai...

    News    3 February 2020
  • Grasshopper up

    Landmark green SRT finalised

    RBS has completed a landmark capital relief trade referencing a £1.1bn portfolio of UK pro...

    News Analysis    31 January 2020
  • BMO SRT inked

    Repeat Manitoulin trade completed

    Bank of Montreal has completed a capital relief trade referencing US and Canadian senior secured and...

    News    31 January 2020
  • Risk transfer round-up - 28 January

    CRT sector developments and deal news

    Deutsche Bank has completed a capital relief trade from the CRAFT programme. Dubbed CRAFT 2020-1, th...

    News    28 January 2020
  • Risk transfer round-up - 27 January

    CRT sector developments and deal news

    Banco BPM is rumoured to be readying a capital relief trade for this year. The issuer launched its f...

    News    27 January 2020
  • SCI Start the Week - 27 January

    A review of securitisation activity over the past seven days

    Transaction of the week ResponsAbility Investments has announced the first closing of an innovative...

    News    27 January 2020
  • Risk transfer round-up - 23 January

    CRT sector developments and deal news

    Caixabank is rumoured to be prepping a consumer SRT for this year. The lender printed its last trans...

    News    23 January 2020
  • Risk transfer round-up - 22 January

    CRT sector developments and deal news

    BBVA is rumoured to be readying a capital relief trade for 1Q20. The transaction would be the lender...

    News    22 January 2020
  • CEE SME guarantee increased

    Sector developments and company hires

    EMEA Alvarez & Marsal has launched a European debt advisory practice with the appointment...

    Market moves    21 January 2020
  • SCI Start the Week - 20 January

    A review of securitisation activity over the past seven days

    Stories of the week Consumer boost Santander completes innovative SRTs Under pressure US stu...

    News    20 January 2020
  • 'No Data' threshold consultation underway

    Sector developments and company hires

    C-PACE partnership Eyzenberg & Company and Greenworks Lending have formed Eyzenberg Green...

    Market moves    17 January 2020
  • Consumer boost

    Santander completes innovative SRTs

    Santander has completed two synthetic securitisations of consumer loans. The transactions are the ba...

    News    16 January 2020