Capital Relief Trade & Capital Relief Trades Deal Issuance – Structured Credit Investor

Capital relief trades are deals put together by banks to sell on to investors to reduce the bank’s regulatory capital requirements. Such deals can take many forms, but SCI focuses on those where synthetic or securitisation structures are utilised. Those deals can be broken down into the following broad categories (deals can be combinations of these categories): CDS – credit default swaps: in the capital relief trade context, this denotes deals that utilise such instruments to transfer credit risk. CLN – credit-linked note: in the capital relief trade context, this denotes the deal is structured as a note with an embedded credit derivative.

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