Bank of Montreal completes $5B in synthetic risk transfers across two corporate loan portfolios

• Bank of Montreal has completed two synthetic risk transfer (SRT) deals totaling $5 billion in corporate loans, utilizing its Muskoka and Algonquin programs.
• These transactions allow BMO to reduce its regulatory capital burden by transferring a portion of potential loan losses to outside investors, without selling the loans.
• The deals highlight a growing trend among Canadian banks to use SRTs as a capital management tool, driven by strong investor demand for such products.

Topics: Asset types, Institutional adoption, Risk default, Financial instruments, Banking depository pilots, Credit counterparty risk

Tags: #bankofmontreal #syntheticrisktransfer #corporateloans #capitalrelief #investorappetite #firstlosstranche #regulatorycapital #canadianbanks #assetmanagement

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US probes insurers owned by billionaire Mark Walter over asset disclo…

• US prosecutors and the SEC are investigating Mark Walter's insurance companies, Delaware Life and Clear Spring Life, for alleged inadequate disclosure of asset ownership.
• The investigation focuses on whether private credit investments were made with counterparties tied to Walter's holding company, TWG Global, leading to a significant reclassification of affiliated investments.
• Regulators are concerned about asset managers using insurer funds for risky investments and the treatment of affiliated assets, with S&P Global Ratings revising Delaware Life's outlook to 'negative'.

Topics: Asset types, Legal regulatory, Risk default, Private credit high yield, Securities law classification, Credit counterparty risk, Investor protection disclosure

Tags: #markwalter #delawarelife #clearspringlife #sec #usattorneysoffice #privatecredit #affiliatedinvestments #guggenheiminvestments #regulatorycapital #disclosure

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