Banks are increasingly relying on risk transfer tools to manage loan portfolios. Societe Generale SA, one of Europe’s largest lenders, is finalizing a significant risk transfer agreement involving over $5 billion in project finance deals.
The transaction, expected to be one of the largest in recent memory, includes a diverse portfolio of energy and data center loans. Other banks, including BBVA and ING, have also explored similar strategies as they navigate the growing demand for AI infrastructure financing.
How banks use SRTs to free up capital
Societe Generale and others are using Structured Risk Transfer (SRT) deals to offload a portion of their loan risk. These deals allow banks to protect 5% to 15% of their portfolio value, reducing potential losses and freeing up capital for new lending or shareholder returns.
Investors see high yields despite market headwinds
Despite ongoing investor concerns—such as rising energy prices and the long-term viability of AI-driven sectors—SRT sales continue to break records. Investors are attracted to the high yield potential, with some deals offering over 10% in coupon payments. Crescent Capital, a key player in the risk transfer market, estimates that first-half 2026 SRT sales have already surpassed $18 billion.
SocGen’s recent deal priced at 675 basis points
Earlier this year, Societe Generale completed a risk transfer on more than €9 billion in loans across France and the US. The transaction, which spread at 675 basis points over a borrowing benchmark, was described as a standout in a market that has grown increasingly competitive.