Deutsche Bank plans SRT deal tied to US$3 billion corporate loans
The size of the SRT is around 8 per cent of the portfolio, or about US$240 million, with the loans in both North America and Europe, the people said. The notes will form part of the lender's Craft programme, they added, asking not to be identified because the deal is private. A representative for Deutsche Bank declined to comment.
SRTs allow banks to essentially buy insurance on debt, freeing up capital, while still keeping the assets on their balance sheets. The transactions involve selling notes to funds in exchange for yields that can frequently top 10 per cent, with the investors agreeing to absorb some losses if the loans go bad.
Other European banks currently discussing SRT deals include Banco Santander, BNP Paribas and UniCredit. Demand for such instruments remains largely unaffected by the recent bout of volatility in public financial markets.
In March, Deutsche Bank priced a US$560 million SRT deal out of its Craft programme at a spread of 750 basis points over the secured overnight financing rate, data compiled by Bloomberg show. The lender also priced an SRT deal tied to a portfolio of loans to German mid-cap companies, chief executive officer Christian Sewing said on an April 29 earnings call.
'There was also no noticeable repricing required. So, actually, there is a lot of demand,' said Sewing on the call, replying to a question about the potential impact of economic uncertainties on demand for SRTs.
SRT are among the tools Deutsche Bank is using for its plan to reduce its risk weighted assets by 25 billion euros (S$36.4 billion) to 30 billion euros by the end of the year, a goal the lender may 'overachieve,' Sewing told analysts.
The rising popularity of SRTs means deals may hit record volumes this year. Chorus Capital Management, which invests in SRTs, projects global issuance to grow to as much as US$35 billion, compared with an estimated US$29 billion last year, with the lion's share taking place in Europe.
UniCredit is working on at least three SRTs tied to loan portfolios totalling around 4.2 billion euros, while Santander is discussing another three to offload risk from its loan portfolios in Spain, Denmark and the UK. BNP Paribas is also in talks to sell an SRT linked to a portfolio of about 10 billion euros in corporate loans. BLOOMBERG
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Straits Times
25 minutes ago
- Straits Times
Tesla ordered by Florida jury to pay over $400m in Autopilot crash
Sign up now: Get ST's newsletters delivered to your inbox A Tesla car passing the US Courthouse in Miami, Florida, where the case is being heard. MIAMI - A Florida jury on Aug 1 found Tesla liable in the 2019 fatal crash of an Autopilot-equipped Model S, and ordered Elon Musk's automaker to pay US$329 million (S$424 million) to the family of a deceased woman and an injured survivor. The payout includes US$129 million of compensatory damages and US$200 million of punitive damages. Tesla was sued by the estate of Naibel Benavides Leon, and by her former boyfriend Dillon Angulo. The lawsuit concerned an April 25, 2019 incident where George McGee drove his 2019 Model S at about 100kmh through an intersection into the victims' parked Chevrolet Tahoe as they were standing beside it on a shoulder. 'Tesla designed Autopilot only for controlled access highways yet deliberately chose not to restrict drivers from using it elsewhere,' Mr Brett Schreiber, a lawyer for the plaintiffs, said in a statement. 'Today's verdict represents justice for Naibel's tragic death and Dillon's lifelong injuries.' Tesla did not immediately respond to requests for comment. REUTERS
Straits Times
an hour ago
- Straits Times
US, NATO developing novel funding mechanism for Ukraine weapons transfers
FILE PHOTO: Ukrainian service members walk next to a launcher of a Patriot air defence system, amid Russia's attack on Ukraine, in an undisclosed location, Ukraine August 4, 2024. REUTERS/Valentyn Ogirenko/File Photo WASHINGTON - The United States and NATO are working on a novel approach to supply Ukraine with weapons using funds from NATO countries to pay for the purchase or transfer of U.S. arms, according to three sources familiar with the matter. The renewed transatlantic cooperation on Ukraine comes as U.S. President Donald Trump has expressed frustration with Moscow's ongoing attacks on its neighbor. Trump, who initially took a more conciliatory tone toward Russia as he tried to end the more than three-year war in Ukraine, has threatened to start imposing tariffs and other measures if Moscow shows no progress toward ending the conflict by August 8. The president said last month the U.S. would supply weapons to Ukraine, paid for by European allies, but did not indicate how this would be done. NATO countries, Ukraine, and the United States are developing a new mechanism that will focus on getting U.S. weapons to Ukraine from the Priority Ukraine Requirements List, known under the acronym PURL, the sources said. Ukraine would prioritize the weapons it needs in tranches of roughly $500 million, and NATO allies - coordinated by NATO Secretary General Mark Rutte - would then negotiate among themselves who would donate or pay for items on the list. Through this approach, NATO allies hope to provide $10 billion in arms for Ukraine, said a European official, speaking on condition of anonymity. It was unclear over what timeframe they hope to supply the arms. "That is the starting point, and it's an ambitious target that we're working towards. We're currently on that trajectory. We support the ambition. We need that sort of volume," the European official said. Top stories Swipe. Select. Stay informed. Tech Reporting suspected advanced cyber attacks will provide a defence framework: Shanmugam Business Singapore's US tariff rate stays at 10%, but the Republic is not out of the woods yet Asia Asia-Pacific economies welcome new US tariff rates, but concerns over extent of full impact remain Business ST explains: How Trump tariffs could affect Singapore SMEs, jobs and markets Asia Indonesia's Mount Lewotobi Laki-laki erupts Singapore Thundery showers expected on most days in first half of August Singapore Synapxe chief executive, MND deputy secretary to become new perm secs on Sept 1 Singapore 5 women face capital charges after they were allegedly found with nearly 27kg of cocaine in S'pore NATO declined to comment. The White House, Pentagon, and Ukrainian embassy in Washington did not respond to requests for comment. Russian forces are gradually advancing against Ukraine, and control one-fifth of Ukraine's territory. FASTER ARMS RESTOCKING If a NATO country decides to donate weapons to Ukraine, the mechanism would allow that country to effectively bypass lengthy U.S. arms sales procedures to replenish its own stocks, said one U.S. official, speaking on condition of anonymity. But the NATO country would have to pay the U.S. up front for the speedier replenishment. The money would be paid into a U.S.-held account, possibly at the U.S. Treasury Department, or to an escrow fund, although the exact structure remains unclear, the official said. NATO countries also have the option of simply paying the United States to send weapons directly to Ukraine. In that case, the payment could be made via NATO or directly to the U.S. Department of Defense, said a second source, speaking on condition of anonymity. This would be in addition to the United States' own effort to identify arms from U.S. stockpiles to send to Ukraine under the Presidential Drawdown Authority, which allows the U.S. president to draw from current weapons stocks to help allies in an emergency. At least one tranche of weapons for Ukraine is currently being negotiated under the new mechanism, two sources said, though it was unclear if any money has yet been transferred. Trump's fellow Republicans in Congress have introduced legislation, known as the PEACE Act, that aims to create a fund at the U.S. Treasury in which allies can deposit money that would pay to replenish U.S. military equipment donated to Ukraine. Ukraine's needs remain consistent with previous months - air defenses, interceptors, systems, rockets, and artillery. The last statement of need from Ukraine came at the July 21 Ramstein conference led by EU allies, including Britain. REUTERS
Straits Times
3 hours ago
- Straits Times
Pfizer and BioNTech lose UK court appeal over Covid-19 jab
Sign up now: Get ST's newsletters delivered to your inbox Moderna has accused Pfizer and BioNTech of violating its intellectual property rights with regard to mRNA technology. LONDON - US pharmaceutical giant Pfizer and German firm BioNTech lost on Aug 1 a court appeal in the latest step of a multi-million pound battle against US rival Moderna over the Covid-19 vaccine. The Appeals Court in London upheld an earlier UK court decision in the long-running battle between the global pharma firms. It found that one of the European patents held by Moderna was invalid, but that a second one had been broken by Pfizer and its German partner BioNTech. 'The judge made no error of law or principle' in the ruling handed down in July 2024, the Appeal Court judges wrote Friday, dismissing the appeal brought by the two companies. Pfizer quickly said it will appeal the Aug 1 ruling to Britain's Supreme Court. 'Today's UK Court of Appeal's decision does not change our unwavering stance that this patent is invalid,' Pfizer said in a statement. 'This decision has no immediate impact on Pfizer and BioNTech.' Pfizer and BioNTech had argued that both the patents cited by Moderna were invalid, and neither had been infringed. The Aug 1 decision could have wide implications for other cases involving the huge pharma companies in the United States, Germany, Belgium, the Netherlands and Ireland. Moderna said in a statement it was pleased with the Aug 1 ruling and would 'continue to pursue and enforce its patent rights globally to protect its innovative mRNA technology'. A UK court was told in 2024 the firms had spent £19 million (S$32 million) fighting their legal battles. In 2020, Pfizer and BioNTech's vaccine became the first ever mRNA vaccine approved for widespread use, and was swiftly deployed to combat the Covid-19 pandemic. Scientists believe mRNA vaccines, which provoke an immune response by delivering genetic molecules containing the code for key parts of a pathogen into human cells, could be a game-changer against many diseases. Traditional vaccines contain some form of the dead or inactivated target virus. Since the virus need not be grown in the lab, mRNA vaccines can in theory be developed at scale more quickly than traditional vaccines. In March, a German court in Duesseldorf also found Pfizer and BioNTech had violated a Moderna patent filed between 2010 to 2016 to make their vaccines. It ordered they must provide estimates of how much they had profited from breaking the patent as well as provide 'appropriate compensation'. AFP
