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Singapore’s Largest Lender Closes Its 1st SRT
Singapore’s largest lender, DBS Group, has closed its inaugural synthetic significant risk transfer, or SRT, which is tied to a portfolio of $1 billion of global corporate loans, according to an announcement from the firm.
The deal was funded through a single tranche of $100 million, covering approximately 0% to 10% of the first-loss layer of the reference pool, according to sources. This landmark SRT aims to enhance the Singaporean bank’s capacity to optimize capital and support its clients’ financing needs as the group scales its presence across Asia.
Sources indicate that the bank likely partnered with an undisclosed insurer or reinsurer, with names such as Munich Re and RenaissanceRe being among the parties invited to bid for the transaction.
The SRT attracted wide interest from Asia-based investors, including $55 billion multistrategy hedge fund PAG and Singapore-headquartered First Plus Asset Management. PAG, however, is understood to have eventually withdrawn from the deal, reportedly after encountering issues with the originally proposed structure.
The SRT marks an important milestone for Asian markets, signaling a further increase in issuance volumes. Although DBS’ capital ratios remain well above regulatory requirements, this transaction gives the bank additional flexibility and lays the groundwork for repeat issuance in the future.
“This debut transaction strengthens our ability to maintain strong capital and balance sheet discipline and prudently capture opportunities as we scale our franchise,” said Philip Fernandez, a group corporate treasurer at DBS. “We are also pleased to contribute to the continued development of Singapore’s financial markets by introducing globally established risk management solutions to the region. This builds on our track record of bringing innovative structures to market, such as our pioneering role in Singapore’s covered bond space.”
DBS declined further comment. PAG and First Plus Asset Management did not immediately respond to requests for comment.
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