Winner: Santander

Santander has won the Issuer of the Year category in this year’s SCI Capital Relief Trades Awards. The bank continues to be one of the largest and most innovative originators in the CRT space globally, with a total of 12 capital relief transactions issued by the group in the 12 months to September 2022 from a record seven countries.

Indeed, this year the bank executed trades referencing €17.6bn of Santander’s global asset portfolio, placing €1.3bn of first loss and junior mezzanine risk with investors. All Santander transactions have been structured, arranged and placed by Santander CIB - and despite the challenging wider market backdrop, Santander CIB adapted placement strategies and continued to place three further transactions since May 2022.

High volumes in 2022 were accompanied by innovative transactions. One such transaction was Project Frida II, an emerging market SRT.

The synthetic securitisation references a PLN2.4bn portfolio of consumer cash loans granted by Santander Bank Polska (SBP) to private individuals in Poland. Protection was provided by the International Finance Corporation (IFC) against a mezzanine tranche via an unfunded financial guarantee, with SBP retaining a small first loss tranche.

The protection enables SBP to optimise its capital and allows for further lending to the real economy. It is a unique transaction in that it was the first-ever SRT in emerging markets with a climate risk mitigation objective.

With the support provided by the IFC, SBP has undertaken to deploy the freed-up capital to issue at least US$600m-equivalent of new green lending. Specifically, the capital freed will support additional climate finance activities, involving renewable energy and water efficiency, as well as green building projects.

Additionally, it offers the bilateral option to upsize the reference portfolio and capital structure by an additional PLN400m within the one-year replenishment period, allowing the issuer to maximise year-end capital benefits.

Another notable transaction issued by Santander was Syntotta Three, due to its ramp-up features. The ramp-up period allows Santander Totta - the bank’s Portuguese subsidiary - to add up to €200m of new assets in the first six months of the deal.

David Saunders, executive director at Santander CIB, notes: “2022 posed challenges to the SRT business. However, our team has proven that with the right people, tools and expertise, we can continue to innovate to help optimise capital and increase lending to the real economy.”

Moreover, the bank has been further expanding the investor base, having attracted over 90 investors in the space - with over two-thirds being first loss or junior mezzanine investors.

Finally, Santander has been actively advocating for regulations that help grow and support the securitisation market across the EU and UK. The bank’s most notable contribution in this regard was the STS framework for synthetic securitisations.

Honourable mention: Barclays
In recognition of the bank executing a record 15 CRTs during the awards period, representing US$2.4bn of equity tranches and US$28bn of portfolio notional, including its first high-LTV mortgage deal and largest Colonnade deal. In 2021, the bank achieved the largest market share of any issuer. All deals utilise its sophisticated CRT platform, featuring automated infrastructure, market-leading quantitative tools, dedicated bank resources and global investor coverage.

For the full list of winners and honourable mentions in this year’s SCI Capital Relief Trades Awards, click here.

*For more on the outlook for global risk transfer activity, join our complimentary webinar on 2 November at 2pm GMT. Leading CRT practitioners from Arch MI, ArrowMark Partners, Credit Benchmark and Guy Carpenter will discuss current trends in light of today’s macroeconomic headwinds. Click here to register.*