Bank of Ireland Executes Credit Risk Transfer (CRT) Transaction
The Governor and Company of the Bank of Ireland (BOI) has executed a CRT transaction to refinance the Grattan Securities CRT transaction. This transaction references a portfolio of €2 billion of Irish and UK loan assets originated by BOI’s Corporate Banking business and involves the execution of a credit protection deed backed by €265 million of unfunded and funded credit protection.
The innovative transaction reduces BOI’s credit risk exposure through a risk sharing structure whereby the investors assume the credit risk for €265 million of potential credit losses on the reference portfolio of loan assets. No assets will be derecognised from the Group balance sheet and the reference portfolio of loan assets and related customer relationships will continue to be maintained by the Group. BOI also recently executed a transaction to share a further c.$70m of credit risk on the Group’s Leveraged Acquisition Finance CRT transaction.
Both transactions were well received by the market and placed with a small group of international
investors. The transactions have a broadly neutral impact on capital ratios.
Sean Crowe, Chief Executive BOI Markets & Treasury commented: “We are delighted to have concluded further innovative CRT transactions. We were particularly pleased with the continued strength of demand from international investors for transactions of this nature from Bank of Ireland. This successful execution further evidences the belief investors have in the strength of the Group’s domestic and international corporate banking businesses and the Groups disciplined approach to lending to this sector.”