Latest news with #SRTs
Business Times
23-05-2025
- Business
- Business Times
Deutsche Bank plans SRT deal tied to US$3 billion corporate loans
[BERLIN] Deutsche Bank is selling a significant risk transfer (SRT) linked to a portfolio of US$3 billion in corporate loans, according to people with knowledge of the matter, the latest deal to drive this market toward record volumes this year. 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
Yahoo
28-02-2025
- Business
- Yahoo
NatWest Plans SRT Tied to Almost £1 Billion of Leverage Loans
(Bloomberg) -- NatWest Group Plc is working on a significant risk transfer linked to a portfolio of leveraged loans, according to people with knowledge of the matter. The Trump Administration Takes Aim at Transportation Research NYC's Congestion Pricing Pulls In $48.6 Million in First Month Shelters Await Billions in Federal Money for Homelessness Providers New York's Congestion Pricing Plan Faces Another Legal Showdown NYC to Shut Migrant Center in Former Hotel as Crisis Eases The size of the reference portfolio is almost £1 billion ($1.3 billion), said the people, who asked not to be identified because the potential transaction is private. The size of the SRT is around £90 million, they added. SRTs are an increasingly popular tool for banks to manage risk. Lenders can insure loans against default by selling these notes to pension, sovereign wealth and hedge funds. That enables them to tie up less of their own capital to meet regulatory requirements, while investors can pick up yields frequently above 10%. The terms, including size, are still subject to discussions with investors, said the people. Separately, the bank is on Wednesday marketing a pound-denominated Additional Tier 1 bond, a kind of debt that lenders use to bolster capital buffers. A representative for NatWest declined to comment. The rising popularity of SRTs means such deals are on track to hit a record high this year. Chorus Capital Management, which invests in SRTs, projects global issuance to grow to as much as $35 billion, compared with an estimated $29 billion last year, with the lion's share taking place in Europe. Last year NatWest added bankers to its SRT desk and marketed a risk transfer tied to £1.4 billion of loans. Other recent deals out of British banks include a Standard Chartered Plc transaction linked to a portfolio of $1.5 billion of loans. The UK government is close to existing its stake in NatWest, acquired in a bailout during the 2008 financial crisis. This month it sold down more and now owns less than 7%, with the bank's Chief Executive Officer Paul Thwaite saying that the second quarter would be a reasonable timetable for a full exit. Trump's SALT Tax Promise Hinges on an Obscure Loophole Warner Bros. Movie Heads Are Burning Cash, and Their Boss Is Losing Patience Walmart Wants to Be Something for Everyone in a Divided America China Learned to Embrace What the US Forgot: The Virtues of Creative Destruction Meet Seven of America's Top Personal Finance Influencers ©2025 Bloomberg L.P.
Bloomberg
07-02-2025
- Business
- Bloomberg
Deutsche Bank Raises Bar for SRT Leverage Amid ECB Inquiry
By and Arno Schuetze Deutsche Bank AG is tightening terms under which it provides loans for investors such as hedge funds to buy significant risk transfers. The Frankfurt-based lender is letting investors in SRTs know that the bank will be less proactive in offering clients financing via repurchase agreements, according to people familiar with the matter.
