Winner: UniCredit Bank
UniCredit Bank has won the Arranger of the Year category in SCI’s Capital Relief Trades Awards, in recognition of the volume and scope of the deals it executed during the awards period. The bank arranged a record 15 deals over the last 12 months across five jurisdictions (Bulgaria, Germany, Italy, Poland and Spain) and four asset classes (auto, large corporate and SME loans and lease receivables), representing an underlying portfolio of over €20bn.
Five of these deals were inaugural transactions – for a top tier Italian bank, Banco Sabadell, Banca Popolare di Sondrio, BulBank and mBank – with UniCredit also acting as sole arranger on five out of the 15 EIF European Guarantee Fund (EGF) trades issued during the awards period. In total, the bank supported 10 clients, seven of which were external to the UniCredit Group.
“SRT is an important product for us. We began building our franchise years ago, with the aim of supporting third-party clients to become more involved in the space. This is possible because we have a large and unique team that is committed to sharing our knowledge of and expertise in the sector,” observes Andrea Modolo, md and head of securitisation, asset-backed solutions, Italy at UniCredit.
He continues: “Over the last 12 months, we’ve concentrated on broadening the franchise outside of our main markets of Italy and Germany and across different asset classes. Importantly, this enabled us to bring SRT technology to a number of new counterparties.”
One highlight was arranging mBank’s inaugural deal in Poland (which has received an Honourable Mention in the Transaction of the Year category, see page X). Sized at PLN8.9bn, Project K2 is the largest-ever securitised CEE portfolio, the first-ever STS synthetic securitisation from Poland, the first Polish SRT trade with a CLN issued directly by a bank and the first Polish SRT trade executed entirely with a private investor (PGGM).
Other highlights include a landmark Italian regional bank EGF deal (for BP Sondrio), the first synthetic securitisation for a Bulgarian bank and the first synthetic securitisation executed without supranational involvement for a top tier Italian bank (€2.2bn of Italian large corporate exposures) and Banco Sabadell (the €1.5bn Galera II). “We wanted to demonstrate that SRT is not limited to national champion banks, but can be adapted for smaller banks too. As with any new project, the challenge for first-time issuers is having the teams and processes in place that are completely focused on the transaction,” says Modolo.
He adds: “Transparency about what will happen and why you’re asking for certain information is helpful for gaining traction internally. Being smaller can allow greater efficiency, but it also means that typically there are fewer resources to allocate. Consequently, it’s crucial to keep on track in terms of the transaction timeline.”
Modolo notes that the STS synthetics framework is helpful in terms of providing regulatory guidance and reference points for new entrants to the CRT market. However, he points out that not all originators have the desire to meet the STS standard, given that internal policies are necessary with which to maintain and control eligibility.
Looking ahead, Modolo expects the CRT market to continue to grow, driven by the entrance of new participants, jurisdictions and potentially new asset classes. He predicts that over the next 12 months, the bulk of issuance will be made up of large corporate deals and more concentrated pools, for which investors can do their own due diligence. Other asset classes and smaller, more granular pools may begin emerging in 2H23.
“Investors are looking for diversification and are open to seeing new jurisdictions and increasing their capacity. They see value in synthetic securitisations compared to other instruments and invest opportunistically. At the same time, incumbent originators still have other portfolios that they are interested in securitising,” explains Modolo.
He concludes: “Rather than being perceived as an alternative to capital instruments, SRT is now recognised as an additional tool to be used by banks, depending on the market opportunity. During the Covid crisis and the recent volatile market conditions, the CRT market remained open and effective – in some cases, with the EIF and in others, with private investors – unlike the market for some other instruments.”
Honourable mention: Alantra
In recognition of the firm executing five deals in the awards period, including: the first synthetic shipping securitisation in Greece and first shipping-only CRT since 2013; the first-ever synthetic STS mortgage securitisation; and the first synthetic STS mortgage securitisation in Greece. The firm maintains a key strategic goal to support new CRT originators through a hands-on approach across all work streams and developing innovative structural solutions.
For the full list of winners and honourable mentions in this year’s SCI Capital Relief Trades Awards, click here.
*For more on the outlook for global risk transfer activity, join our complimentary webinar on 2 November at 2pm GMT. Leading CRT practitioners from Arch MI, ArrowMark Partners, Credit Benchmark and Guy Carpenter will discuss current trends in light of today’s macroeconomic headwinds. Click here to register.*