European banks are enjoying higher subscription levels and lower pricing for significant risk transfer (SRT) trades this year. This is down to booming demand for capital-relief instruments from US funds, market participants say.
Synthetic securitization makes up more than 80% of SRT deals, according to European Central Bank data. In 2023, this type of SRT issuance reached around $25 billion globally over reference loan portfolios totalling over €300 billion, Pemberton Asset Management estimates, excluding public-sector issuance.
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