Lloyds Plans SRT Deal Tied to Commercial Real Estate Loans

Lloyds Banking Group Plc is selling a significant risk transfer linked to around £500 million ($681 million) of commercial real estate loans, according to people familiar with the matter.

The deal is part of the lender’s Wetherby SRT program, the people said, who didn’t want to be identified because the matter is private.

A representative for Lloyds declined to comment.

SRTs allow banks to insure loans against default by selling credit-linked notes to pension, sovereign wealth and hedge funds. Lenders use these transactions to boost their solvency ratios and free up capital they’d otherwise use to meet regulatory requirements.

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