Nov 7, 2019
Capital Relief Trades (CRTs) - often referred to as synthetic
securitizations - are used by banks to transfer risk on reference
pools of assets to non-bank investors, reduce the risk weight of
assets held by these banks and improve capital ratios.
Historically, the CRT market has been dominated by issuers in the
United Kingdom and other European jurisdictions, and, while the
United States has lagged behind Europe in CRT issuance, there are
reasons to believe this trend will change in the coming years.
Mayer Brown partners Carol Hitselberger, Julie Gillespie and Ed
Parker discuss why US banks are interested in CRT, the operational
requirements for synthetic securitizations under the US capital
rules and structuring considerations important to these
transactions.