In a recent feature in GlobalCapital, Victor Kloos, Director at Revel Partners, shared his expert insights on the burgeoning market for significant risk transfer (SRT) transactions in the Nordic region. Revel Partners has been actively involved in facilitating these transactions, observing a notable increase in activity and interest.
Victor Kloos highlighted the increasing activity in the SRT market, stating, “We have definitely seen more transactions and more entrants recently. In the tier below the largest banks, we’re seeing more interest in these transactions.” This trend underscores a growing focus on generating returns on equity by improving capital efficiency, especially with the implementation of Basel III regulations and higher interest rates.
The SRT market in the Nordics is diverse, encompassing a variety of assets, including unsecured loans covered by the EU's backstop regulations, which mandate non-performing loans (NPLs) to be written down fully from the capital base three years after default.
Revel Partners' involvement in these high-profile transactions demonstrates their pivotal role in the Nordic securitization market, which is predominantly driven by covered bonds and deposit funding routes. “There are two camps of SRT issuance,” Kloos explained. “Nordic corporates are very attractive from an investor point of view. We’ve also seen some consumer loans. On the NPL side, it’s consumer loans because of the NPL backstop.”
As the Nordic region continues to see a rise in SRT transactions, Revel Partners remains at the forefront, leveraging their expertise to navigate and shape this evolving market.
