Yahoo Finance Helaba Plans SRT Linked to €2 Billion of Corporate Loans
(Bloomberg) -- German bank Helaba plans to issue a significant risk transfer tied to a pool of about €2 billion ($2.1 billion) of corporate loans, according to people with knowledge of the matter.
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Alantra Partners SA is helping to arrange the transaction, said the people, who asked not to be named because the matter is private. Representatives for Helaba and Alantra declined to comment.
SRTs, also known as synthetic risk transfers, allow banks to insure their loans against default by selling notes to pension, sovereign wealth and hedge funds. That enables lenders to tie up less of their own capital to meet regulatory requirements, while investors can pick up yields frequently in the low double-digits.
They’ve become a fast-growing part of credit markets, totaling over €206 billion in 2023, up from around €97 billion in 2020, according to data compiled by AXA IM Alts. UniCredit SpA is working on three significant risk transfer deals linked to as much as €8.5 billion of loans, including one transaction tied to a portfolio of loans to German small and medium-size companies, while Deutsche Bank AG is selling an SRT linked to $2 billion of leveraged loans, people familiar with the transactions said earlier this month.
In 2022, Helaba carried out its inaugural SRT, allowing it to free-up regulatory capital linked to to a portfolio of €2.1 billion of corporate loans, the lender said in a statement at the time. The deal was implemented through the sale of credit-linked notes to Dutch pension fund investor PGGM and Swedish pension fund Alecta.
Helaba, which is majority-owned by savings banks, is one of Germany’s biggest lenders with a balance sheet total of about €200 billion.
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