JPMorgan Chase & Co. is discussing with investors the possibility of a significant risk transfer on a $2 billion portfolio of loans intended for the purchase of private jets. Sources say the potential deal could be worth up to $250 million, representing approximately 12.5% of the total loan pool.
JPMorgan Considers Significant Risk Transfers (SRTs) on $2 Billion Private Jet Loans
Significant risk transfers (SRTs) allow banks to insure loans against default and reduce risk concentration across specific sectors or types of borrowers. These structures free up capital that would otherwise be frozen for regulatory compliance, while investors can achieve higher returns.
JPMorgan representatives declined to comment. Insiders say the terms of the deal are still subject to change during the discussions. While SRTs have previously been applied primarily to corporate debt, banks are now considering them for other types of loans, including high-yield asset-backed loans such as art.
Bloomberg Intelligence analysts forecast an average annual growth rate of 11% for the global SRT market over the next two years. Major market participants include Goldman Sachs, UBS, Banco Santander, and ING, which have recently issued or are preparing to issue dollar-denominated SRTs.
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