10:36 AM EDT, 09/04/2024 (MT Newswires) -- Deutsche Bank ( DB ) has expanded its risk transfer portfolio by an additional $1 billion, increasing the underlying leveraged loan exposure to $3 billion, Bloomberg reported Wednesday, citing people familiar with the development.

The bank's portfolio now includes synthetic risk transfers or SRTs, which allow banks to transfer loan default risk by selling notes to institutional investors, such as pension and sovereign wealth funds, the report said.

Deutsche Bank's ( DB ) SRT deal involved the sale of the riskiest portion of the transaction at a 10.5 percentage point spread over the Secured Overnight Financing Rate, while the mezzanine part, which typically has a lower risk, was priced at a 3.75 percentage point spread, the people reportedly said.

In August, an anchor investor in Deutsche Bank's ( DB ) SRT program reportedly purchased almost half of the notes from the latest issuance, according to the people.

Deutsche Bank ( DB ) did not immediately respond to a request for comment from MT Newswires.

(Market Chatter news is derived from conversations with market professionals globally. This information is believed to be from reliable sources but may include rumor and speculation. Accuracy is not guaranteed.)

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