Japan’s SMBC Weighs SRTs on Project Finance, LatAm Loans (1)

Sumitomo Mitsui Banking Corp. is sounding out investors about at least two significant risk transfers, an increasingly popular transaction that helps lenders free up capital for more profitable growth.

Japan’s second-biggest banking group is discussing an SRT to offload risks linked to about $1.8 billion of lending for infrastructure projects, according to people familiar with the matter who asked not to be identified because the talks are private. It is also considering a second potential deal tied to a portfolio of roughly $4 billion of large corporate loans in Latin America, they said.

Banks use SRTs mainly to increase their ...