Deutsche Bank Increases Leveraged Loan Risk Transfer on Demand

Deutsche Bank AG bolstered the size of a significant risk transfer by $1 billion after strong investor demand, according to people with knowledge of the matter.

The SRT now hedges exposure to a $3 billion portfolio of leveraged loans after a private credit manager offered to take a significant portion of the deal, the people said, asking not to be identified as the transaction is private.

SRTs, also known as synthetic risk transfers, allow banks to insure their loans against default by selling notes to investors such as pension, sovereign wealth and hedge funds. For banks, the benefit is that ...