NatWest Readies SRTs Tied to Company Loans, Fund Financings

NatWest Group Plc is preparing to issue SRT transactions hedging loans to small and middle size enterprises and fund financing, according to people familiar with the matter, signaling continued demand for such instruments despite heightened market volatility.

The Edinburgh-based lender plans to discuss with investors an SRT tied to at least £1.5 billion ($2 billion) of SME loans, according to people familiar with the matter. The bank is also mulling an SRT deal tied to a portfolio of subscription lines of credit, said the people.

Banks use SRTs as a way to insure loans against default, typically obtaining protection for ...