Landesbank Hessen-Thüringen Girozentrale (Helaba) has successfully completed its inaugural credit risk sharing transaction.
Standard Chartered, PGGM and Alecta complete landmark risk sharing transaction receiving capital relief in Asia
Stockholm, Zeist, Singapore –
This market-leading transaction enables Standard Chartered to be the first bank to benefit from capital relief in Hong Kong in the Bank’s calculation of its capital adequacy ratios.
The transaction, for which PFZW and Alecta are the investors, is part of a risk sharing partnership which Standard Chartered and PGGM have in place for over a decade. Alecta started to co-invest in recent years as a result of its partnership with PGGM.
The transaction is part of Standard Chartered’s highly successful synthetic significant risk transfer securitisation programme, which was introduced more than 15 years ago, and references a pool of corporate loans that Standard Chartered originates and holds on its balance sheet across the Bank’s extensive geographical footprint.
Credit risk of corporates and financial institutions with businesses in Asia, the Middle East and Africa are part of the portfolio. By selling protection on a first loss tranche, the Bank transfers a significant share of the credit risk of this portfolio of loans to the investors, while remaining very much aligned with PGGM and Alecta through the Bank’s retention of risks to the underlying borrower clients as the loan book remains on the Bank’s balance sheet.
Barend van Drooge, Deputy Head Credit and Insurance Linked Investments at PGGM, said: “Realising this risk sharing transaction milestone with Standard Chartered is extra special, considering the two institutions have worked closely together in holding numerous dialogues with the local regulator, resulting in the introduction of such credit risk sharing transactions in the region. We hope to continue such dialogues with regulators across the region to further open up Asian markets for credit risk sharing transactions”
“I am very proud of our teams for their tremendous effort and perseverance in delivering this landmark transaction, which paves the way for us to extend this to other markets,” said Elena Lee, Head of Balance Sheet Securitisation, Standard Chartered. “I would also like to thank our longstanding investor partners for their strong support all these years. This transaction leverages on an already well-established credit risk sharing platform at Standard Chartered and opens up a new avenue for our Asian subsidiary to further optimise our balance sheet capital and achieve better returns.”
Tony Persson, Alecta’s head of Fixed Income and Strategy, shared: “We are very pleased to add another risk sharing transaction with Standard Chartered. The transaction fits well with the long-term strategy of our fund and its 2.6 million customers. By adding this part of Standard Chartered’s Asian exposure it broadens our geographical diversification further within the credit risk sharing space.”
Alecta manages occupational pension plans for 2.6 million people and 35,000 businesses across Sweden. We were founded in 1917 and we are owned by our customers. Our most important task is to ensure that our customers occupational pension grows, while working to ensure that more people can benefit from the security which an occupational pension provides. On March 31, 2022 Alecta had SEK 1178 billion in assets under management.
PGGM is a not-for-profit cooperative pension fund service provider. As a pensions administrator, asset manager and advisor to pension fund boards, it executes its social mandate: to provide for good old-age incomes for 4.4 million participants in the Netherlands. On June 30, 2022 PGGM managed long-term pension capital of EUR 241 billion worldwide. Rooted firmly in the Dutch healthcare sector, PGGM develops innovative provisions for labour market issues in this sector, alone or with strategic partners. Our member organisation PGGM&CO supports 764,000 workers and pensioners with a background in healthcare.
For more information about credit risk sharing, please see https://www.pggm.nl/en/our-services/credit-risk-sharing/
About Standard Chartered
We are a leading international banking group, with a presence in 59 of the world’s most dynamic markets, and serving clients in a further 83. Our purpose is to drive commerce and prosperity through our unique diversity, and our heritage and values are expressed in our brand promise, here for good.
Standard Chartered PLC is listed on the London and Hong Kong Stock Exchanges.
For more stories and expert opinions please visit Insights at sc.com. Follow Standard Chartered on Twitter, LinkedIn and Facebook.
mBank and PGGM have entered into a credit risk sharing transaction based on the Polish bank’s corporate loans portfolio.
First credit risk sharing transaction based on new EU STS standard
Share or Print Article
click on the icon