PGGM and Alecta Enter Into a Credit Risk Sharing Agreement with BNP Paribas
Posted on 02/04/2022
PGGM (on behalf of PFZW) and Alecta have entered into a Credit Risk Sharing (CRS) agreement with BNP Paribas, referencing an 8 billion euro loan portfolio. For the investors and the bank it’s the first CRS transaction that meets the quality criteria set by the EU for Simple, Transparent and Standardized transactions (STS).
The transaction, in which Alecta and PFZW are cornerstone investors, is the most recent issuance from BNP Paribas’ Resonance programme, through which the bank on an on-going basis enters into credit risk sharing transactions and which supports the capitalization of its lending activities with core French and international corporate clients.
PGGM and Alecta have a longstanding relationship with BNP Paribas and also invested in previous credit risk sharing transactions. In this most recent issuance, they share risk in a 8 billion euro portfolio of loans to a wide variety of corporates based in Europe, the United States, and across Asia-Pacific.
The fact that this most recent risk sharing is a STS qualifying transaction is an important milestone reached, after many years of advocacy by PGGM on extending the use of the STS framework to credit risk sharing transactions.
PGGM has been growing a credit risk sharing portfolio for PFZW (the 277 billion euro pension fund for Dutch healthcare workers) since late 2006. As part of their ambition to expand into private market assets, Alecta decided to build a sizeable portfolio of credit risk sharing transactions by entering into a co-investment agreement with PGGM in April 2020. Under the deal, Alecta takes a 30% share in all new credit risk sharing transactions initiated by PGGM.