Intesa Sanpaolo SpA is in discussions on sizable significant risk transfer deals to hedge over €5 billion of assets, roughly $6 billion. One potential transaction under discussion with investors references €1.9 billion of subscription credit lines used in fund finance, while another, now at an advanced stage, would cover about €3.3 billion of corporate loans.
An Intesa Sanpaolo spokesperson declined to comment.
Most SRTs are backed by corporate loans, but banks are increasingly using them to move risk on fund finance too. Subscription lines are short-term loans that let private equity or credit funds bridge investment or expense timing until limited partners send in cash, and they can boost fund returns.
Peers are circling similar trades. Deutsche Bank AG is pursuing a prospective transaction referencing roughly $2 billion of these loans, and Standard Chartered Plc has been weighing a similar move. Earlier this year, Goldman Sachs Group Inc. and a group of investors explored an SRT proposal connected to a pool of subscription credit lines. The discussions persist despite wars, higher energy costs, widening government deficits, and concern that an AI upswing fueled by debt is pushing credit spreads wider.
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SRTs are high-risk, high-yield investments that insure the first-loss or a junior tranche of loan books, generally equal to roughly 5 to 15 percent of a portfolio's value. Issuance has surged in recent years, helping lenders transfer risk tied to $1 trillion of loans and free up regulatory capital to support new lending, shareholder distributions, or buying competitors.
Intesa is a long-standing issuer of SRTs, and Chief Financial Officer Luca Bocca said on a May call with analysts that the bank is working to expand their use.
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