Societe Generale and Mariner Investment Group complete a $3.4b impact investment risk transfer transaction
The Bank commits to redeploy part of the freed-up capital to Positive Impact financings
Societe Generale, one of the leading European financial services groups, and Mariner Investment Group, LLC today announced the completion of Jupiter a $3.4 billion credit risk transfer transaction related to the Bank’s diversified lending portfolio. The transaction is first-of-its kind, incorporating an innovative factor to incentivize additional Positive Impact Finance* lending. Mariner Investment Group, the global alternative asset manager and a majority-owned subsidiary of ORIX USA, has purchased a junior tranche of notes through its credit-risk transfer strategy, the IIFC platform.
The Jupiter portfolio corresponds to more than 250 loans in over 40 countries around the world, with credits sourced from Societe Generale’s leading structured finance franchise in a variety of sectors, including Energy, Infrastructure, Shipping, Aircraft, Metals & Mining, Real Estate, and Telecom, Media & Technology.
While this transaction is one of the largest synthetic risk transfer for these asset classes, it also distinguishes itself thanks to an innovative capital allocation factor for Positive Impact projects. The Bank has committed to dedicate 25% of the risk weighted asset reduction to spur new Positive Impact financing over the next three years. By reallocating the released capital from the legacy loan book and dedicating it to enhance the capacity to finance new Positive Impact projects, the parties aim to strongly advance the United Nations Sustainable Development Goals.
Additionally, if the Bank is able to redeploy 50% of the risk weighted assets towards the Positive Impact capital allocation factor by the fourth anniversary of the transaction, Mariner has agreed to a reduction in the coupon, creating a positive pricing incentive for additional Positive Impact Finance investment.
Jupiter adds to Mariner Investment Group's track record of impact investing through the IIFC platform, now reaching a total of over $7 billion in impact-related initial deal notional. These include a landmark $1 billion synthetic securitization in cooperation with the African Development Bank announced in the fall of 2018, pioneering the use of credit risk transfer strategies to a new and previously unexplored segment of the financial markets.
Press contacts:
Societe Generale:
Paris : Fanny Rouby + 33 1 57 29 11 12 fanny.rouby@socgen.com
Thomas Alexandre + 33 1 42 13 34 37 thomas.alexandre@socgen.com
London : Ila Kotecha +44 20 7676 6804 Ila.Kotecha@socgen.com
Mariner Investment Group, LLC:
David Press
Tel: (917) 721-7046
david@feverpress.com
Note to Editors:
* Positive Impact Finance is the one which serves to deliver a positive contribution to one or more of the three pillars of sustainable development (economic, environmental and social), once any potential negative impacts have been duly identified and mitigated.
Know more about Societe Generale “Sustainable and Positive Impact Finance” offering:
- November 2017: Societe Generale launches a “Sustainable and Positive Impact Finance” offering within the global banking & investor solutions’ activities
- June 2019: Societe Generale continues to expand its “Sustainable and Positive Impact Finance” offering
- Click here to access the dedicated page on Societe Generale wholesale website
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