Macquarie Infrastructure Debt Investment Solutions (MIDIS) has invested in a synthetic securitization of NatWest’s £1.1 billion ($1.4 billion) project finance loan portfolio.
The transaction was a structured finance solution in partnership with BAE Systems Pension Funds Investment Management (BAPFIM), allowing NatWest to recycle capital which it can use for further lending to the U.K.’s renewables sector, according to MIDIS.
This type of transaction, known as a capital relief trade, allows investors with less capital restrictions, such as pension funds, to gain exposure to debt portfolios at an attractive point in the risk/return spectrum, according to MIDIS.
“The nature of the transaction enables a significant release of the capital allocated to the portfolio, which we will then be able to recycle to further increase our lending to the sustainable energy sector, helping support the growth in renewable generation that will be essential for the U.K. to mee
