On 19 December 2024 Coöperatieve Rabobank U.A. (“Rabobank”) entered into a new capital relief transaction (“CRT”) with Dutch pension investor PGGM (on behalf of PFZW).
Background of the transaction
The transaction provides a first loss protection on a EUR 750mn portfolio of large corporate exposures in Europe and North America. The structure meets the Simple, Transparent and Standardized (STS) criteria and provides an effective credit risk hedge on the underlying portfolio. The trade extends Rabobank’s long standing partnership with PGGM on similar trades and follows a similar transaction with regard to the bank’s Small and Medium-Sized Enterprise (SME) portfolio in 2022, which was executed with the European Investment Fund and European Investment Bank. The underlying exposures remain on Rabobank’s balance sheet. There is no impact on Rabobank’s clients and the bank’s interests are aligned with those of PGGM. Rabobank acknowledges the benefits of having the capabilities to execute CRT transactions. The execution of this transaction will provide future flexibility to amongst others steer capital efficiency and optimize the balance sheet through the use of these transactions.