Contents

Asset-Backed Finance

Siepe builds for scale as the lines between private credit and structured finance blur

New hires and fresh investment driving global expansion and product innovations as convergence continues

Capital Relief Trades

SCI In Conversation Podcast: Pietro Bellone, A&O Shearman

We discuss the hottest topics in securitisation today...

In this episode of SCI In Conversation, Pietro Bellone, structured finance and securitisation partner at A&O Shearman, joins SCI senior reporter Nadezhda Bratanova to discuss current SRT trends such as the role of infrastructure and project finance assets in synthetic deals, and how these are expanding the scope of uniquely positioned Italian markets. 

In light of A&O’s recent advisory role on two project finance and infrastructure SRT transactions, Bellone offers timely insights into the increasing relevance of these asset classes within capital relief trades. He discusses how Italian lenders are turning to synthetic securitisation to manage capital efficiently, highlighting transactions such as Agos’ €1bn consumer loan SRT and the Brignole CO and CQ 2024 trades. The conversation also explores the Bank of Italy’s evolving stance on SRT recognition, regulatory developments, and what could define the next phase of Italian issuance – from a more diverse investor base to the growing participation of financial intermediaries.

This episode is available here, and on all major podcast platforms, including Apple Podcasts and Spotify. Just search for SCI In Conversation. 

Nadezhda Bratanova

Capital Relief Trades

UK lender securitises CRE exposure

SRT market update

Lloyds Bank is expected to price a £500m synthetic securitisation referencing a portfolio of CRE exposures by the end of this week (week-ending October 31), sources tell SCI. 

The transaction is part of the UK lender’s Wetherby program and includes a £35m mezzanine tranche, equivalent to around 7% of the referenced portfolio, which is understood to have priced at a spread of approximately 800bps. 

The deal marks one of the few recent UK CRE-focused SRTs, reflecting renewed investor appetite for risk with wider spreads, reflecting a still-volatile real estate market, market participants share.

Lloyds has declined to confirm details. 

Nadezhda Bratanova

Capital Relief Trades

New UK CRE deal attracts strong investor interest

SRT market update

NatWest is progressing with a synthetic CRE transaction, with an expected closing in early December. 

The reference portfolio size is reported at £3bn. Notably, the portfolio is not yet tranched, suggesting final negotiations on the capital structure are underway. Market engagement and reception have been robust, with approximately 15 investors having submitted bids. However, sources indicate the final selection of participants is still undecided, reflecting the current high demand for exposure to high-quality CRE risk transfer assets.

Santander Q3 2025 results confirm SRT strategy

Santander’s Q3 2025 results, released yesterday, continue to signal the strategic importance of SRT activity within the bank’s capital management framework.

Santander reported a strong CET1 ratio of 13.1%, up 0.1pp from the 13.0% reported in Q2. Management’s commentary highlighted this as a reflection of “robust capital generation and improved profitability,” emphasising “strong capital productivity.”

This trajectory aligns directly with the strategy disclosed in the issuer’s Q2 Pillar 3 report, which noted that “risk transfer initiatives more than offset an increase in RWAs” during that quarter, directly contributing to the capital ratio uplift.

Additionally, the Q2 report confirmed Santander’s origination pipeline in 2025, with nine new securitisations executed for risk transfer, of which five were synthetic deals. The primary underlying assets for these deals are consumer loans (primarily cars) and loans to businesses. This activity contributed to the €6.99bn in notional value of synthetic securitisation exposures in the trading book as of June 2025. Santander leverages a total of 125 securitisations (83 synthetic) to transfer risk and optimise capital.

Separately, and adding to the visible pipeline, a market investor has indicated that Santander has recently launched or is currently testing investor appetite with a new batch of 10-15 deals, all of which are synthetic transactions. 

Nadezhda Bratanova, Vincent Nadeau

Capital Relief Trades

European expansion

SRT market update

Deutsche Pfandbriefbank is in market with a €2bn synthetic securitisation referencing US loans, SCI learns. The deal is expected to close in early 2026 and marks another step in the bank’s active capital management strategy, sources confirm.

Meanwhile, Commerzbank is preparing an SRT in the Baltics, referencing SME and consumer loans – the first transaction of the German lender in the region. The move follows the bank’s 2024 opening of a representative office in Vilnius, signalling growing appetite to expand SRT activity across new jurisdictions. 

Elsewhere, Aareal Bank has completed its inaugural SRT referencing a €2bn portfolio of performing European CRE loans. Alvarez & Marsal advised on the transaction, with Clifford Chance acting as legal counsel. 

Activity in the SME space is also picking up, with a bunch of smaller, niche transactions coming to market over the next two months. SCI understands that a first-time issuer in Poland is currently working on a deal of this type expected to close by the year end.

In the US, further details have emerged regarding Goldman Sachs’ new Absolute transaction. Sources indicate that the final portfolio size remains flexible, driven primarily by investor demand, with the capacity to potentially grow the reference pool to between US$5bn and US$6bn. Regarding the structure, while the tranche is expected to be sized at 10%, reports indicate the distribution of multiple tranches to a diverse group of investors, rather than relying on a single placement. Early feedback on pricing suggests that execution will be “pretty tight.” 

Parallel to this, another GSIB is reportedly in market with a pair of bilateral, corporate loans transactions.

Nadezhda Bratanova, Dina Zelaya

ABS

Santander leading uptick in European ABS volumes

Demand for paper trumps selective risk assessment amid robust investor appetite

The European securitisation market is undergoing a period of significant expansion, following the end of quantitative easing in 2023. This year is already on track to overtake the post-2008 issuance record set in 2024, with over €115bn of new deals year-to-date, €38bn of which stem from consumer credit sectors. Leading this uptick in volume is Santander, which has placed €13bn of public ABS and SRT paper this year alone.

“I think Santander will maintain its leadership,” observes Aza Teeuwen, partner and co-head of ABS at TwentyFour Asset Management. “They have some developed programmes now where they will tap into both the SRT and funding side. At least for one more year, they’re the biggest one.”

For instance, strong demand was seen for Consumo Santander 9, the €1.4bn Spanish consumer ABS that priced earlier this month. The 2.7-year deal tightened repeatedly during bookbuilding, with triple-As 1.7x covered and mezzanine tranches 5-7x covered, ultimately pricing at Euribor plus 70bp for the double-A class.

Yet Teeuwen cautions that the spread compression has its limits. “I think we’re getting close to fair value,” he notes. “For some products, pricing has gone too far (particularly in double-Bs), whereas triple-As look cheap for the risk you’re taking. You’ve got single-A consumer risk pricing tighter than triple-A CLOs.”

Santander’s willingness to issue across the entire capital spectrum has set it apart from its peers. “At current pricing, it looks a good level for banks to be issuing and I’m surprised we’ve not seen more,” Teeuwen says.

He adds that Santander’s scale across multiple jurisdictions explains why its volumes appear outsized, citing the bank’s long history of issuing ABS and SRT and pointing out that “some of the other banks have just never done it.”

Although Santander continues to issue large volumes of ABS, the performance of its underlying loan books has become more uneven, with arrears in some consumer portfolios now showing signs of pre-GFC levels. Teeuwen suggests that investors are not fully pricing in these differences between asset classes.

“I don’t think investors are differentiating much between issuers,” he says. “Performance is different from one lender to another.”

Despite clear variations in credit quality, investors are buying across the board, driven by strong demand for paper rather than selective risk assessment. Teeuwen notes that default rates and leverage levels have both increased in recent years, yet spreads across issuers remain close together.

Recent consumer ABS structures have also become more leveraged, driven by a combination of investor demand, arranger innovation and earlier leniency in rating agency methodologies. This has been supported by cheaper funding, as Teeuwen points out: “If your triple-As are cheaper, then you can deal with more leveraged structures.”

However, recently there has been a reversal in exposure to certain non-prime and legacy collateral as rating agencies have improved their methodologies. This has resulted in some downgrades, although these appear to be limited.

Matthew Manders

Asset-Backed Finance

ABF Deal Digest: Barclays expands US consumer finance footprint with Best Egg acquisition

A weekly roundup of private asset-backed financing activity

This week’s roundup of private ABF activity sees Barclays US Consumer Bank strengthen its consumer loan origination platform with the acquisition of direct-to-consumer lender Best Egg. Elsewhere, Wafra has seeded a newly formed specialty finance company, while Together has refinanced its property development lending facility.

Barclays acquires Best Egg in ABF origination play

Barclays Bank Delaware (operating as Barclays US Consumer Bank (USCB)) is set to acquire Best Egg for US$800m. Best Egg complements USCB's established partnership-driven credit card business, which provides unsecured personal lending to customers through a number of existing co-brand card partner programmes. The transaction strengthens USCB's franchise by acquiring digital and risk capabilities in an attractive part of the US consumer finance market and provides significant flexibility in the efficient deployment of lending capacity and capital.

Best Egg is a US direct-to-consumer personal loan origination platform with a focus on prime borrowers and an established track record of risk management. The business has consistently grown since its establishment in 2013 and has facilitated over US$40bn in personal loans to more than two million customers.

In 2025, Best Egg is expected to facilitate more than US$7bn in personal loan originations via its platform. The loans are funded through structures including securitisation programmes and forward flow arrangements provided by a range of alternative asset managers, with the business generating largely fee-based capital-light income as a result of its loan origination and servicing activities. The business currently services approximately US$11bn in personal loans.

Following completion, Barclays expects to continue this model and retain a small portion of Best Egg's new lending flow on its balance sheet.

The Best Egg acquisition is expected to complete in 2Q26, subject to required regulatory approvals and other conditions, after completion of the sale of Barclays' American Airlines co-brand credit card receivables. The net effect of both transactions is estimated to be an approximate 6bp increase in the Group's CET1 ratio in 2Q26.

BMG signs forward flow agreement

BMG Money has signed a forward flow agreement with Hudson Cove Capital Management to purchase up to U$360m of loans originated by WebBank through BMG Money's employment-based lending platform. BMG Money’s platform provides access to loans for individuals who may not qualify for credit from traditional banks, using employment status to approve loans rather than FICO scores.

The agreement allows BMG to be better positioned to scale its platform and serve a growing number of consumers. "Consumer debt levels continue to strain household budgets, putting many individuals at risk of financial crisis. This partnership gives BMG the predictable funding source we need to address the critical demand from customers who deserve access to responsible credit options,” comments Kieran Noonan, president and ceo at BMG Money.

Equipment financing firm formed

Funds managed by Wafra’s real assets & infrastructure strategy have launched Broadleaf Financial Group, a newly formed specialty finance company that serves Fortune 1000 businesses and corporate customers. The firm was founded by ex-First Financial Equipment Leasing veterans Brian Dundon (who becomes ceo), Audrey Kent (chief risk officer) and David Anderson (coo).

Broadleaf offers customised, flexible leasing and financing solutions focusing on the logistics, medical, technology and construction sectors, enabling clients to access tailored financing that enhances growth, efficiency and adaptability. The firm will also form strategic collaborations with banks, independent lessors and other financing providers as a programmatic partner and capital solutions provider.

Italian real estate securitisation inked

Signal Eurofund Retail Holdco I, a joint venture formed by Signal Capital Partners and the Eurofund Group, has received a senior secured real estate financing from Nuveen Real Estate. Provided through a real estate securitisation structure, the financing will support the capex and repositioning project at Parma Promenade, a shopping resort scheduled to open next summer.

The reconfiguration involves an extension of the existing 38,679 square-meter retail space, including the addition of a Primark anchor unit, open-air leisure facilities and conversion of the first floor into a leisure and food hub. This transformation addresses a key market gap, given that Parma lacks a modern, large-format retail destination, despite being one of Italy's wealthiest cities.

The sponsors were advised by Simmons & Simmons, while A&O Shearman supported Nuveen European Real Estate Debt Fund IV as drafting counsel. Bird & Bird handled the real estate and regulatory due diligence, while Evergreen assisted Eurofund Group with contractual matters.

Oportun increases warehouse capacity

Oportun has closed a new US$247m three-year revolving term committed warehouse facility with Citizens Financial Group as senior lender and Community Investment Management as mezzanine lender. The lender has also secured a 12-month extension of an existing warehouse facility with Goldman Sachs as senior lender and Jefferies as mezzanine lender.

Both warehouse facilities were priced more favourably than existing warehouse facilities and reduced overall warehouse financing costs. Oportun’s total committed warehouse capacity has risen from US$954m to US$1.14bn as a result, with the weighted average remaining term for combined warehouse facilities increasing from 17 months to 25 months.

Prosper prints prefunded ABS

Prosper Marketplace has closed its inaugural 100% prefunded ABS transaction, Prosper Asset Receivables Trust 2025-1 (PAR 25-1). The US$120m deal is backed by fixed-rate, fully-amortising unsecured personal loans originated through Prosper's platform.

The prefunded nature of the transaction allows Prosper to efficiently facilitate the origination of loans through its platform, while complementing existing asset sales of whole loans and passthrough certificates to institutional investors. CRB Securities served as sole structuring and placement agent and the deal is co-sponsored by Cross River Bank.

Second warehouse facility for Amzak

Amzak Capital Management has closed a US$200m warehouse facility with Axos Bank to support the continued expansion of its multifamily construction lending platform under Amzak Capital Partners. This is Amzak’s second warehouse facility in this asset class, reinforcing the firm’s commitment to the multifamily sector and ability to scale with leading developers nationwide.

Since launching its construction lending platform, Amzak has originated more than US$800m in debt to finance 21 multifamily projects, representing the construction of over 5,500 units across Florida, South Carolina, Texas, Arizona, Connecticut and New Jersey. The new facility provides additional capacity to continue financing high-quality development opportunities in supply-constrained markets.

Together refis ADALO facility

Together Financial Services has refinanced - on improved commercial terms - its securitisation facility for property development lending, ADALO Asset Backed Securitisation. The maturity of the £100m securitisation has been extended to March 2030, with the revolving period ending in March 2028.

The facility allows Together to extend its support to more residential and commercial property developers across the UK, helping to deliver much-needed homes and workspaces. The firm closed the inaugural ADALO facility, sized at £150m, in March 2024 with an expected maturity of 2028. The securitisation initially contained loans that previously formed part of the Group’s senior secured notes security.

Corinne Smith, Marina Torres

Capital Relief Trades

UK SRT policy finalised

PRA publishes near-final policy statement

The PRA has confirmed key targeted policy changes for securitisation, providing (much-needed) clarity for the UK SRT market. The final rules, set for implementation in January 2027, cement the PRA's singular approach to capital treatment for synthetic deals, especially for Standardised Approach (SA) banks navigating the Basel 3.1 output floor.

The three most critical takeaways for the SRT community and market relate to the definitive calibration of the p-factor, the formal refusal of a synthetic STS regime, and the clear authorisation of unfunded protection.

The most impactful element for prospective originators, particularly UK challenger banks subject to the SA, is the near-final adoption of the formulaic p-factor in the Securitisation Standardised Approach (SEC-SA). As such, the (new) formulaic p-factor for non-STS securitisations is subject to a floor of 0.5. As previously noted, reducing the effective p-factor from 1.0 to 0.5 can lower the cost of capital substantially, making SRT competitive with costly capital instruments (e.g., Tier 2) and enabling standardised banks to scale their SRT programmes. This reduction will be particularly impactful for challenger banks, given most of their balance sheet is standardised, providing capital for their growth, especially in buy-to-let and secured SME lending.

The ‘softened stance’ on the use of unfunded credit protection (such as guarantees/insurance wraps) in synthetic SRT transactions is now definitive policy, largely maintaining the enhanced supervisory expectations proposed in the consultation phase. Such formal approval clearly authorises the use of unfunded protection, enabling insurance and reinsurance companies (both UK and international) to deploy significant capacity in the UK SRT market.

Crucially, the PRA maintains a prudent approach, stating that firms must continue to monitor risks and conduct robust stress testing of their securitisation activities, specifically in relation to unfunded credit protection. Notably, the regulator has clarified the change in power for precluding capital relief, shifting from a formal “decision” to providing “feedback.” Fundamentally, originators may proceed with capital relief unless the PRA intervenes to prevent it.

Finally, the PRA has reaffirmed its unequivocal refusal to extend the preferential capital treatment of STS status to synthetic securitisations. The PRA's view is that extending the favourable capital treatment would “not, on the whole, advance its objectives.” While this stands in contrast to the EU rules and regulations, the finalisation of the lower p-factor for non-STS securitisations is intended to mitigate the capital cost differential for UK deals.

The January 2027 implementation date for this near-final policy gives the industry a clear timeline for capital planning and finalising its operational readiness for the new UK securitisation landscape.

Vincent Nadeau

Capital Relief Trades

SCI Risk Sharing Awards: SRT Team of the Year

Winner: Seer Capital

Seer Capital’s regular and accessible research publications are widely viewed as the gold standard for intelligence on SRTs, showcasing a high level of market knowledge and often addressing misconceptions about the product or other advocacy issues. For facilitating transparency and debate across the SRT market, the firm is SCI’s pick for Team of the Year in the 2025 Risk Sharing Awards.

Seer’s SRT research is open to all, published on its website and distributed to a growing list of recipients totalling more than 1,800 at the time of writing. The team uses this forum to highlight the benefits of SRT for banks and for the broader economy, as well as the attractiveness of the product to investors, helping to influence the view of SRT among regulators and the mainstream financial press. It also disseminates market information, including pricing where it can be shared, thereby enhancing market efficiency.

The mainstay of the firm’s research output is the twice-monthly ‘Reg Cap Recap’. On the first Tuesday of every month, the publication includes: a graph comparing recent SRT new issue spreads with high yield and CLO double-B spreads; a list of recent SRT new issue deals with pricing; market commentary; and summaries of news stories and conferences/events relevant to SRT. On the third Tuesday of every month, the Reg Cap Recap includes: a discussion of fundamental credit trends in SRT and common reference assets; graphs of default rates on various types of corporate credit and on consumer auto loans; and summaries of news stories and conferences/events relevant to SRT.

In addition, Seer periodically publishes articles on specific timely topics in the SRT space. For example, the team has focused on rebutting criticism of SRT in the press and addressing concerns raised by regulators about use of leverage to finance SRT trades.

In the latter case, for instance, the firm estimated the amount of leverage against SRT outstanding to be in the order of €10bn - hardly sufficient to trigger systemic concerns. The research argued that leverage broadens the range of investors that can participate in SRT at lower coupons, thereby lowering issuance costs for banks and thus enabling them to lend to consumers and business more cost-effectively. It further pointed out that banks financing SRT transactions look to the credit quality of the borrower (fund), sufficiency of the cash haircut and mark-to-market triggers to mitigate their risk, making SRT financing arguably a lower-risk proposition than many other businesses routinely conducted by banks.

Seer’s thought leadership also includes regular contributions to industry events.

The firm’s research effort is led by Karen Weaver, head of market strategy and research. She was previously md and global head of securitisation research at Deutsche Bank in New York until February 2010.

Seer’s SRT traders contribute heavily to the production of research as well. The desk is headed by Terry Lanson, md, who is responsible for the firm’s investments in SRT, whole business securitisation and other European investments. He joined Seer in 2008 after two years at Citi in London, where he structured and traded esoteric structured credit-related assets. Before that, Lanson spent nine years at Deutsche Bank in New York and London, where he was part of the team responsible for the bank’s market-leading balance sheet securitisation/SRT programme.

Lanson is joined on the trading desk by md Bari Rosenbaum, who has been with the firm since 2014 and previously worked on Seer’s CMBS B-piece trading desk.

Seer has completed 86 SRT investments for a total of US$1.6bn since 2010, including 11 new issue investments during the awards qualifying period.

For the full list of winners and honourable mentions in this year’s SCI Risk Sharing Awards, click here.

Capital Relief Trades

SCI Risk Sharing Awards: Outstanding Contribution to SRT

Winners: Georges Duponcheele and William Perraudin

SCI’s 2025 Outstanding Contribution to SRT Award celebrates Great Lakes Insurance senior credit portfolio manager Georges Duponcheele and Risk Control md William Perraudin, and their longstanding efforts and contribution to the industry’s regulatory debate.

Notably, their 2024 paper - Rethinking the Securitisation Risk Weight Floor - in which they and their other co-authors linked risk weight floors for retained senior tranches to a formulaic approach led to its inclusion in the recent EU CRR proposals from the European Commission. Such inclusion has the potential to be an instrumental step-change for issuer efficiencies in SRT.

While this paper had a direct impact on legislative proposals, it does not, however, accurately reflect the pair’s historical advocacy in this sector.

A longstanding contribution

Although their recent paper was a key factor in their recognition, Duponcheele and Perraudin are quick to point out that their contribution has been more of a longstanding one. The idea for a proportional risk weight floor, for instance, was first mentioned in one of their papers over a decade ago. The pair’s work is characterised by a persistent and consistent effort to provide a clear, scientific approach to securitisation regulation.

As Perraudin notes: “We have always had this stream of work in which we have calculated with quite rigorous, yet simple models what the capital should be.”

Such unwavering commitment to evidence-based analysis has made the pair’s work highly influential. Indeed, their work demonstrates a profound understanding of the regulatory landscape and the political economy at play.

Perraudin suggests that the European authorities have “finally recognised the ill-designed nature of the current rules." This shift in mindset, coupled with the need to free up banks to manage their balance sheets and increase investment, has created fertile ground for the pair’s ideas.

Their work, though technical, has a clear purpose: to help regulators better understand the true nature of securitisation risk. This is not about simply “loosening rules to increase profits for certain areas of the industry,” as Perraudin clarifies, but about contributing constructively to a more stable and efficient market.

A collaborative journey

Duponcheele and Perraudin’s partnership is a unique blend of expertise: Duponcheele, a practitioner with deep experience as a securitisation investment banker and reinsurer, and Perraudin, a former regulator and academic.

With degrees from Oxford, the London School of Economics and Political Science and Harvard, Perraudin brings a rigorous, theoretical approach to the challenges of financial regulation. A former professor of finance at Imperial College London and a special advisor to the Bank of England, his career has been dedicated to the study of credit risk and its implications for banking regulation. His work has consistently focused on creating transparent and well-documented solutions to complex financial problems.

Duponcheele, on the other hand, provides a crucial practitioner's perspective. His experience with the nuances of real-life transactions and his role as a Senior Credit Portfolio Manager at Great Lakes Insurance give him unique insights into the practical application of regulatory frameworks.

The story of their personal collaboration began in January 2013, following the Basel Committee’s 2012 Securitisation Proposal, which had led to an unwarranted tripling of capital. Since then, they have published more than 20 joint papers that have a track record of influencing policy.

Their first publication in April 2013, for example, directly contributed to the Basel Committee’s decision to abandon the modified supervisory formula approach (MSFA) in favour of the SEC-IRBA. The paper highlighted the technical flaws of the MSFA, demonstrating that it generated punitive and unwarranted capital requirements for certain transactions.

Furthermore, they also played a significant role in the development of the Simple, Transparent and Standardised (STS) Securitisation framework in Europe, which was later adopted at the Basel level. They recall the initial resistance to the framework, but through their persistent efforts, they helped demonstrate the benefits of a more harmonised and transparent approach to securitisation. This is a testament to their power to engage with regulators in a constructive, evidence-based manner.

The future of SRT

Looking ahead, Duponcheele and Perraudin see a bright future for the SRT market, driven by a new wave of regulatory reform. They believe that the European Commission's current proposals will help remove arbitrary distortions that have hindered certain asset classes.

In this context, Duponcheele predicts that the market will “naturally come where the rules make sense,” leading to greater activity in areas like residential mortgages. He further anticipates that as the standardised approach banks enter the market, SRT will become more commoditised, with a convergence of features and a move away from bespoke, law firm-driven documentation.

Perraudin equally adds that the expansion of SRT activity would be “positive for the European economy,” allowing banks to provide the funding needed for increased investment. However, both acknowledge that challenges remain, particularly in the lack of publicly available evidence from both regulators and the industry.

They see themselves and their co-authors as providing much-needed, transparent analysis in this space. Both Duponcheele and Perraudin are quick to acknowledge the many co-authors and institutions who have supported their work, such as BNP Paribas, AFME, PCS and Munich Re. They therefore emphasise that their success is not a solo effort but rather the result of a collaborative network of experts, who share their commitment to a more rational and evidence-based approach to the securitisation market and regulation.

In conclusion, the pair’s journey within the SRT market continuously reflects a narrative of persistent, thoughtful and impactful research. Duponcheele and Perraudin have not only provided a scientific foundation for regulatory change, but have also served as a critical voice for transparency and reason in a complex industry. Their work has had a tangible, positive effect on the SRT market, and their dedication to improving regulatory frameworks for the benefit of the wider economy does indeed demonstrate an outstanding contribution to the industry.

Vincent Nadeau

For the full list of winners and honourable mentions in this year’s SCI Risk Sharing Awards, click here.

Capital Relief Trades

SCI Risk Sharing Awards: European Law Firm of the Year

Winner: A&O Shearman

A&O Shearman’s CRT platform is a unique offering: fully transatlantic capability, trusted counsel to both the sell-side and buy-side, and a key player in industry advocacy. As such, is SCI’s European Law Firm of the Year in the 2025 Risk Sharing Awards.

Few practices can match the reach, depth and momentum of A&O Shearman’s Capital Relief Trades (CRT) group. Born of the 2024 merger, the team blends top-tier English-law capability with market-leading US expertise, giving clients seamless advice on both sides of the ocean, and well beyond. The team can call on nearly 200 structured finance and derivatives lawyers, including 20 CRT partners across 12 jurisdictions, and has established a reputation as capable of guiding banks, investors, insurers and supranationals through every nuance of credit-risk transfer, whatever the asset class or structure.

That scale translates into market-defining experience. Whether the underlying portfolio is auto loans, SMEs, project finance debt or next-generation green assets, A&O Shearman has delivered. The firm is unusual in its ability to represent both sell-side and buy-side clients worldwide, offering unrivalled insight into the requirements and constraints of all market participants.

The results speak for themselves. Recent ‘market-firsts’ include an Austrian bank’s debut SRT, the first cross-border transaction to utilise an Italian SPV, the inaugural Spanish CLN issued through a fondo de titulización, the first direct CLN issued by a Greek bank and the first-ever transaction under Norway’s new capital regime.

In 2025, the team has had particular success developing structures to enable insurer participation, both unfunded (including the first financial guarantee entered into by a Lloyds syndicate) and funded (including an insurance-wrapped repack of a fully funded CDS entered into by a US bank – an intricate deal demanding mastery of US capital rules, swaps regulation and back-leverage mechanics).

Innovation is not limited to structuring. By embedding AI platforms such as ContractMatrix and Harvey into day-to-day workflows, the group has sharpened document negotiation and standardised key provisions – all while preserving the bespoke advice for which the practice is known.

The firm’s influence extends well beyond the closing table, and A&O Shearman has established itself as a key player in the broader CRT ecosystem. 2024-2025 saw engagement with new market participants, with practical guides and podcasts, regular contribution to industry press, a host of multiple industry conferences and, above all, engagement with regulators. A&O team members held the pen on multiple AFME and IACPM responses to regulator consultations, and senior associate Robert Simmons was part of the ECB’s working group for fast-track SRT assessment.

After a banner 2024-2025, the CRT team is operating at full throttle. In a market where capital efficiency, risk transfer and regulatory clarity have never mattered more, A&O Shearman offers a singular blend of global reach, technical excellence and forward-looking advocacy – putting clients in pole position for whatever comes next.

For the full list of winners and honourable mentions in this year’s SCI Risk Sharing Awards, click here.

Capital Relief Trades

SCI Risk Sharing Awards: North American Law Firm of the Year

Winner: Mayer Brown

Mayer Brown prides itself on providing US market participants with comprehensive, cutting-edge legal counsel for risk transfer transactions, combining deep technical expertise with practical, hands-on experience. For the breadth of its representations and its involvement in several market innovations over the qualifying period, the firm is SCI’s North American Law Firm of the Year in the 2025 Risk Sharing Awards.

Using a ‘one-stop shop’ model, the firm’s advice on risk transfer transactions incorporates market trends and a commercial perspective. This approach has placed it at the forefront of advising on the special and complex features of risk transfer transactions across asset classes and delivering world-class services to issuers and investors.

Risk transfer deals in the US require expertise in structured finance, financial services regulatory and tax - areas where Mayer Brown has clear expertise. The firm has represented clients in more than 30 US-related risk transfer transactions over the last two years, with an extremely robust pipeline through the end of the year.

Among the innovative transactions Mayer Brown has advised on during the qualifying period are a number of candidates for this year’s SCI Risk Sharing Awards. One involved advising EJF Capital on EJF CRT 2025-1, the first risk transfer to receive regulatory authorisation as a tool for reducing a bank’s (in this case, Third Coast Bank) concentration of commercial real estate (CRE)/acquisition, development and construction (ADC) lending, in addition to obtaining relief under the regulatory capital rules.

In another innovative transaction that is an awards candidate, Mayer Brown represented US Bank in connection with the unrated US$625m USCLN 2025-SUP1. The transaction is a Rule 144A ‘capital markets-style’ issuance of a credit-linked note referencing commercial and industrial loans that is believed to be the first of its kind in the US.

The firm also represented issuers on subsequent risk transfer transactions involving pools of automobile loans. The repetition of a transaction is good evidence that issuers saw significant benefits from the first iteration. These deals demonstrate Mayer Brown’s role as a trusted adviser and are a testament to the value of building long-term relationships.

For the full list of winners and honourable mentions in this year’s SCI Risk Sharing Awards, click here.

Capital Relief Trades

SCI Risk Sharing Awards: Service Provider of the Year

Winner: Cardo AI

The degree of automation and scalability provided by the Cardo AI platform creates genuine efficiency in the portfolio optimisation process. For pioneering the application of AI technology to the structuring, monitoring and analytics reporting of SRT transactions, the firm is SCI’s Service Provider of the Year in the 2025 Risk Sharing Awards.

The Cardo AI platform is recognised as driving greater efficiency, accuracy and insight throughout the transaction lifecycle - from data ingestion to portfolio optimisation - for banks, asset managers and credit institutions. In particular, its modular nature allows offerings to be adapted to the specific needs of each SRT transaction, across different asset classes and evolving regulatory requirements.

With a team of over 120 experts, the platform manages more than US$70bn in assets across all major ABF deal types. By digitising traditionally manual processes, Cardo AI enables clients to scale, improve capital efficiency and achieve capital relief through synthetic and cash SRT transactions.

In the evolving world of SRT and synthetic risk transfer, banks face numerous challenges in managing portfolio de-risking. Traditional methods of managing repetitive tasks - such as data collection, document management and eligibility checks - are time-consuming and prone to errors. Cardo AI addresses these inefficiencies by automating these tasks, freeing up valuable resources and significantly reducing operational costs.

Banks also struggle with optimising portfolio construction, determining the right tranche thickness and tailoring SRT strategies to align with specific risk-return objectives. Cardo AI offers precise tools to optimise these processes, ensuring that mezzanine tranche attachments match the institution’s desired risk profile, thereby enhancing the risk-return dynamics of their portfolio.

Another pressing issue for banks is the ability to meet regulatory compliance while maintaining confidence in the accuracy of their risk assessments. Cardo AI provides powerful data analysis and risk modelling tools, enabling banks to conduct regulatory-mandated portfolio analysis quickly and with greater confidence. With the ability to generate real-time insights and perform comprehensive quantitative and qualitative assessments, banks can ensure they are fully aligned with the latest regulatory frameworks, maximising the benefits of synthetic risk transfer as a proactive risk management strategy.

Key achievements during the awards qualifying period include enhanced support of banks in optimising RWAs and achieving capital relief through efficient SRT processes. Further, in response to evolving EU regulations, Cardo AI has integrated automated compliance features into its platform, ensuring that SRT transactions adhere to regulatory mandates, reducing manual intervention and minimising non-compliance risks. Recognising the industry's shift towards data-driven insights, the platform has also developed advanced analytics tools, providing real-time visibility into portfolio performance and enabling institutions to make informed decisions and manage risks effectively.

Founded in 2018, Cardo AI quickly expanded across Europe with initial support from Fasanara Capital, before entering the US market in 2024. More recently, the firm has onboarded some of the most sophisticated private credit and ABF investors in the US, including Blackstone, Sixth Street and Encina Lender Capital.

For the full list of winners and honourable mentions in this year’s SCI Risk Sharing Awards, click here.

CLOs

UK's largest master trust appoints Invesco for triple-A CLO allocation

Scheme targets higher yields and diversification through Invesco-managed triple-A CLO exposure

Invesco has been appointed to manage over £260m in triple-A CLO debt for the UK’s largest commercial master trust, People’s Pension.

According to the asset manager, with over $2.1tn in AUM, this marks the first time a UK master trust has made a strategic CLO investment, indicating strong demand and the growing profile of the asset class.

The People’s Pension’s CLO assets will consist of direct exposure to triple-A CLO paper as well as investments in Invesco’s AAA CLO ETFs. Overall this will account for 5% of the trust’s fixed income portfolio.

Triple-A CLO tranches offer a number of benefits for direct contribution (DC) pensions schemes, including strong risk-adjusted returns, diversification, and capital efficiency.

As these schemes look for alternatives due to traditional bonds being hit with lower relative yields, duration risk, and higher cross correlations, triple-A CLO paper poses an attractive option to enhance yields without materially impacting credit or liquidity risk.

Charlotte Vincent, co-head of fixed income for People’s Pension which manages £35bn in assets, says triple-A investments are a strong option for pension scheme default arrangements, noting that ETF technology has made the asset class more accessible for institutions like hers when they try entering the market.

“We wanted to diversify our fixed income exposure and offer our members an innovative long-term income generating solution as part of their default investment. We believe Invesco’s ability to access the CLO market through AAA ETFs has made this accessible and offers the transparency, liquidity and investment outcomes we are seeking to achieve,” she explains.

Scott Baskind, head of global private credit at Invesco, adds that the ETF wrapper removes many of the operational problems institutions have had when trying to exploit the promising potential of triple-A CLO paper.

“AAA CLO’s offer the widest choice with the highest potential yield, with only an incremental increase in risk levels. For pension schemes seeking to strengthen member outcomes in a challenging fixed income environment, CLO AAA ETFs represent a compelling next step in retirement plan innovation,” he states.

Bullish on the CLO ETF market’s growth trajectory, the asset manager believes it has the potential to continue to grow from combined interest among traditional and non-traditional institutional investors.

Solomon Klappholz

CLOs

US pension fund backs Canyon Partners with new commitment

Canyon CLO Fund IV extends firm's two-decade CLO track record, targeting US and European equity tranches

Texas County & District Retirement System (TCDRS) has committed US$74.3m to Canyon CLO Fund IV, adding to a wave of institutional allocations into CLO equity strategies. The investment appears under the pension’s latest strategic credit activity update.

The vehicle builds on Canyon’s experience managing three prior captive equity funds, representing more than US$650m of equity capital, the firm says.

Based in Dallas, Erik Miller, partner, co-head and co-portfolio manager of Canyon’s CLO business, tells SCI: “Canyon CLO Fund IV is designed to target higher quality portfolios, generating excess returns through patient portfolio construction and active management. It builds on our long history of disciplined equity investing in the CLO space.”

Over almost 25 years, Canyon has issued more than 33 CLOs and CDOs, delivering average equity yields in the high teens. The firm’s US$12bn CLO platform sits within a broader US$28bn credit business, which includes private credit, real estate and structured finance strategies. 

Positioning for 2025 market conditions

Miller says the current environment - characterised by tight liability spreads and steady loan supply - favours active managers with the experience to manage issuance windows and optimise returns.

“Tighter liability spreads can present an attractive window for CLO issuance, enabling managers to secure favourable costs of capital,” he explains. “However, the concurrent tightening of corporate spreads necessitates a strategic and discerning approach to asset deployment, spread optimisation, and meticulous credit selection.”

Year-to-date, Canyon has issued four CLOs across the US and Europe, including Canyon EUR CLO 2025-2 and Canyon US CLO 2025-2, bringing its CLO AUM to US$11.4bn across 26 active transactions.

The TCDRS allocation underscores the broadening institutional demand for CLO equity, which Miller attributes to consistent performance through varying market cycles.

“CLO equity has earned a growing share of institutional investor allocations due to its track record across market environments,” he says. “Attractive cashflows and compelling risk-adjusted returns have drawn investors ranging from pensions and endowments to family offices and other allocators seeking to enhance portfolio yield.”

While tightening at the top of the CLO capital stack has compressed liability costs, Miller says equity tranches remain particularly attractive.

“Compressed liabilities have increased cashflow available for equity distributions, while active management in loan selection can drive outperformance in volatile periods. That said, we continue to see value across all tranches, as CLO spreads remain competitive versus similarly rated corporate risk,” he adds.

Firm milestones and platform growth

The commitment comes during Canyon Partners’ 35th anniversary year, following team expansions and strategic growth initiatives. The firm added senior hires from BlackRock, KKR, Apollo Global Management and Bain Capital - which included Georg Machinist and Matt Brody, mds, capital formation; William Im, md, investments; Giacomo Greggio, svp, EMEA capital formation; and Nick Gray, md, insurance solutions. Additionally, the firm broadened its private credit platform into asset-backed credit and opportunistic securitisations.

Canyon also closed its largest real estate debt vehicle to date - the Canyon US Real Estate Debt Fund III, with US$1.2bn in assets - underscoring its diversified approach to private and structured credit opportunities, according to the firm.

Ramla Soni

CLOs

Digital credit pioneer sees blockchain as natural fit for CLO mechanics

Sam Paderewski co-founder of Grove - incubated by Steakhouse Financial – answers SCI's questions

Paderewski previously spent five years as an investment analyst at Hildene Capital Management and four years on Citi’s CLO structuring and syndicate team. He shares his insights on the digitalisation of credit markets.

Q: CLOs are already highly structured and data-intensive. Do you see parallels between CLO structuring and the move to bring credit funds on chain?
A: Absolutely. Structured credit already runs on deterministic rules: eligibility tests, OC/IC triggers, reinvestment constraints, waterfalls, and well-defined voting rights. That maps cleanly to smart contracts, where those same rules can be enforced programmatically and observed in real time. Today, most activity is “wrapper” tokenisation, where fund shares are issued on chain while custody and portfolio management remain off chain. Even at this stage we see concrete benefits like new distribution to onchain capital and the ability to leverage fund shares as collateral for stablecoin borrowing. Over time, as underlying instruments migrate to native digital issuance, we could see more meaningful innovation for existing CLO market participants, from automated cash flows to faster execution.

Q: Could blockchain technology address some of the same inefficiencies in the CLO market that electronic trading platforms like Octaura are targeting?
A: Potentially, yes. Public blockchains add different but complementary advantages – near-instant settlement, interoperability with other digital markets, and programmable transfer controls for security and compliance. There aren’t meaningful secondary markets for tokenised credit yet, but we believe that will follow adoption. In the near term, much of the data will aggregate offchain but will be linked to onchain activity via oracles. Over time, the two paths can converge, with electronic venues handling heavy data and analytics and onchain rails supporting instant and simultaneous settlement and programmability. 

Q: How might tokenisation of credit funds change the investor base and could CLO equity or mezz tranches one day be distributed in a similar way?
A: The first-order change with tokenisation has been access. Tokenised funds opened the door for large pools of onchain capital to access approved fund tokens, subscribe in tokenised cash equivalents like USDC (a cryptocurrency stablecoin), and use positions operationally in DeFi. That started with tokenised treasuries (e.g. BUIDL) and is now expanding into diversified and structured credit. Equity and mezz are certainly possible, but those require a bit more sophistication from investors than senior, AAA rated tranches and diversified funds. 

Q: Do you see on-chain structures improving liquidity in private credit, and could those lessons apply to CLOs?
A: Yes, over time. Tokenisation alone does not create liquidity, but it does open up new opportunities for it. As holders grow, we can see platforms host executable bids and offers to the right allowlisted counterparties and settle onchain almost immediately. We are already seeing tokenised fund shares used as collateral to borrow stablecoins in permissioned markets. Aave Horizon’s institutional real world asset (RWA) market is a concrete step in this direction.

Q: CLOs benefit from diversification and active management. How do these characteristics compare with the risk profile of onchain credit funds?
A: Blockchains are a venue and a tool for tokenised assets, and diversification and active management are similarly appealing on and offchain. You can see this across the tokenised products that have had success to date: Janus Henderson and Anemoy’s JAAA holding CLO AAAs, Apollo’s Diversified Credit Fund (ACRDX) focusing on direct lending private credit, or Fasanara’s mF-One, a private credit and digital asset arbitrage fund. On the DeFi side, active risk management also appears in lending protocols like Morpho and Kamino, where risk curators like Steakhouse Financial help set up and curate pools of overcollateralised crypto loans, monitoring LTVs, liquidation thresholds, oracles, and other criteria. These are examples of institutional risk tooling meeting tokenised assets.

Q: Are there regulatory or operational barriers that might prevent securitised products like CLOs from moving on chain in the near term?
A: The fund wrapper has fewer barriers than single-deal securitisations. Individual CLOs would need a different type of investor to be onchain. Funds are diversified and actively managed, and have lower investor eligibility criteria that are easier for current onchain capital to satisfy. By contrast, individual CLOs would require a more sophisticated, institutional investor to come onchain that can meet the Rule 144a or RegS requirements. CLO secondary markets are also fragmented by manager, vintage, tranche, etc., whereas a single fund token concentrates liquidity and integrations

Q: Do you think blockchain could ultimately shift how structured finance markets, including CLOs, handle transparency, data reporting, and risk monitoring?
A: Yes, blockchains are well suited to data-intensive products. You can publish portfolio and cashflow states with verifiable timestamps, automate investor notices, and standardise transfer controls while preserving privacy for sensitive information. That would improve auditability and reduce reconciliation across administrators, custodians, and lenders. We already see pieces of this with tokenised funds that display AUM and flows, wrapped in token standards that integrate cleanly across DeFi, so positions can be monitored and risk-managed programmatically. The trend is clear, even if broad adoption will take time.

Ramla Soni

ABS

Job swaps weekly: Barclays names New York ABS and RMBS co-heads

People moves and key promotions in securitisation

This week’s roundup of securitisation job swaps sees Barclays elevate a pair of mds to lead its New York ABS and RMBS efforts. Elsewhere, Morningstar DBRS has opened a new regional hub in Sydney, while Chapman and Cutler has poached an asset securitisation partner in San Francisco.

Barclays has named mds Benjamin Fernandez and Jonathan Wu as co-heads of ABS and RMBS, based in New York. The former joined Lehman Brothers as an analyst in July 2002, while the latter joined Barclays in June 2011 from JPMorgan.

Meanwhile, Chapman and Cutler has appointed Adam Barton as a partner in its asset securitisation department, based in San Francisco. Barton represents corporate borrowers, issuers, alternative asset funds, banks and other financial institutions in all aspects of complex financings, including structured credit, asset securitisation, warehouse facilities and other asset-backed financing transactions.

Prior to joining Chapman, Barton was a partner in the finance group at Sheppard Mullin Richter & Hampton, which he joined in April 2018. He also served as senior counsel in the capital markets groups of Upstart and OneMain Financial, where he helped lead their securitisation programmes.

Lane42 Investment Partners has appointed Harry Robinson as partner, effective January 2026. He will join the firm's executive committee and be based in the Santa Monica office.

Robinson brings over 35 years of extensive, hands-on experience helping management teams and sponsors drive value and growth within their companies. He will lead Lane42's portfolio value creation effort, supporting the performance of portfolio companies and contributing to investment sourcing, underwriting and diligence. 

Robinson joins Lane42 after a distinguished career at McKinsey & Company, where he has been a senior partner for 20 years.

Founded in March 2025, Lane42 has appointed a leadership team with strong and differentiated experience across public and private markets. With the addition of Robinson, the firm has now hired 19 investment professionals and 29 professionals overall.

Mizuho has appointed Waqaas Lone as head of sponsor coverage & leveraged finance, EMEA. Based in London, Lone joined Mizuho in 2023 as md, head of leveraged finance capital markets, EMEA, after spending 16 years at Morgan Stanley in leveraged loan and high yield syndicate.

Lone brings expertise in financing solutions and a track record in advising clients across sectors on complex capital structures. His appointment reflects the bank’s continued commitment to building a market-leading leveraged finance platform, strengthening its ability to deliver innovative and strategic financing.

Morningstar DBRS has appointed two mds to lead the Asia Pacific region, as the rating agency opens a new regional hub in Sydney, Australia. Kevin Stephenson heads up APAC credit ratings and Natalie Wells is head of APAC business development.

Stephenson and Wells have leadership backgrounds in the financial services and risk sectors, and both have been instrumental in the growth of the credit ratings industry across Asia Pacific in prior roles. The team also includes APAC chief compliance officer Sean Cook, with Morningstar DBRS planning further investments in its analytical and client service teams.

Finally, Squire Patton Boggs (SPB) has added another transatlantic partner to its financial services practice group with the hire of Heather Rees. Joining from K&L Gates in New York, Rees will be based in Dallas and work across the firm’s UK and US platforms.

Dual-qualified in New York and Texas and registered as a foreign lawyer in England & Wales, Rees advises lenders, agents and trustees on complex financing and restructuring mandates – often across multiple jurisdictions. Her hire forms part of SPB’s broader expansion and build-out of its in-house cross-border expertise and follows more than 20 senior additions to its global financial services team over the past year.

Corinne Smith, Ramla Soni, Claudia Lewis