Loans Tied to SRTs Reach $1 Trillion on Record Pace of Sales (1)

Loans tied to significant risk transfers have reached about $1 trillion as deals are running at the fastest pace on record for the fourth year in a row, according to data compiled by Chorus Capital Management.

Significant risk transfers, or SRTs, are becoming increasingly popular as they enable banks to hold onto loan assets and offload the risk by paying investment firms to share any potential future losses. This reduces the regulatory capital banks need, freeing up balance sheets, while investors get returns that are frequently in the low double-digits.

“The market is extremely busy at the moment and ...