It was reported by China Economic Network that, according to insiders, Apollo Global Management (APO.US) and Deutsche Bank (DB.US) conducted a significant risk transfer (SRT) transaction related to a $3 billion leveraged financing debt investment portfolio. Insiders said that the alternative asset management company acquired over 50% of the shares in the SRT transaction. SRT was issued by Deutsche Bank's Loft project. In SRT, the bank shifts the risk of the loan portfolio away, retains the assets, but pays fees to investment firms to share future losses. Typically, a bank would gain default protection of up to 15% of potential losses. In return, investors often receive returns in the low double digits.

Earlier this month, media reported that due to strong investor demand, Deutsche Bank increased the size of the trade. Insiders stated that SRT is a credit tool and loan portfolio. Data shows that the riskiest part of the $0.42 billion bonds is priced 10.5 basis points higher than the Secured Overnight Financing Rate (SOFR). Data shows that $0.12 billion of mezzanine bonds absorb losses after junior bonds, priced 3.75 basis points above the benchmark rate.

According to estimates released by Chorus Capital in July of this year, based on strong growth in the second half, the global SRT issuances for the full year of 2024 are expected to reach $28 billion to $30 billion. In contrast, last year's transaction volume was around $24 billion, marking the highest year on record.