Utilizing a financial guarantee, a bank acquired first loss credit protection for a portfolio of corporate exposures, strategically retaining the exposures on its balance sheet.

This transaction effectively shielded the bank from anticipated and unforeseen credit losses, leading to a reduction in risk-weighted assets and regulatory capital. By freeing up capital, the bank bolstered its capacity for new lending endeavors.

Structured Risk Transfer (SRT) transactions emerge as potent instruments for banks to proactively manage risk and capital while preserving client relationships unscathed.

For investors, SRTs offer access to banks' fundamental lending portfolios, augmenting diversification opportunities within their investment portfolios.

Reach out to us for deeper insights into SRT transactions and other structured solutions.