PGGM and Alecta have concluded yet another credit risk sharing deal with a financial institution. This time around, the pair’s partner institution is Landesbank Hessen-Thüringen Girozentrale (Helaba).
The two pension investors have taken on default risk on a €2.1bn corporate loan portfolio originated by Helaba. The deal is the first transaction for Helaba’s newly set up credit-risk sharing programme.
“Investing in Helaba’s inaugural credit risk sharing transaction marks the addition of a new counterparty to the portfolio we manage on behalf of our client PFZW and provides further diversification given the unique client base of Helaba,” commented Mascha Canio, head of credit and insurance linked investments at PGGM.
Tony Persson, Alecta’s head of fixed income and strategy, added: “For Alecta the transaction offers a valuable source of credit diversification and opportunity to benefit from Helaba’s specific client base. This fits well with the long-term strategy of our fund and will create value for our 2.6 million Swedish customers.”
To support the administration and management of the transaction, an IT system from iconicchain was used, which largely automated the internal processes.
PGGM and Alecta have now concluded around a dozen of such credit risk sharing deals since they started a collaboration on this in May 2020.
Under the agreement between the two pension investors, Alecta takes a 30% share in all new credit risk sharing transactions initiated by PGGM.
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