BlackRock Inc. is forecasting rapid growth for transactions that allow banks to shed risk in their loan portfolios as tougher capital rules take hold.
“Given greater acceptance of this as a tool and ongoing Basel III endgame regulatory pressures, there is a real world in which this market has a potential to grow at 30-to-40% each year for the next two years,” William Im, a director in BlackRock’s global opportunistic credit team, said in an interview before the release of a paper laying out the case for synthetic risk transfer deals.
SRTs, which pay yields in the mid-double ...
