(Reuters) -Dutch bank Rabobank has signed a 1 billion euro ($1.17 billion) deal with pension investment firm PGGM to share the credit risk on a portfolio of Dutch property estates, the companies said on Monday.
WHY IT’S IMPORTANT
The deal highlights how banks are seeking to hedge exposure to credit risks in the event of any market downturn.
Italian bank Intesa said on October 31 that it had shifted the credit risk on 29 billion euros of assets while uncertainty over the credit market also affected U.S. banking shares last month.
The transaction also demonstrates ongoing caution over the European property sector, where property sales are at multi-year lows.
KEY QUOTE
“This marks Rabobank’s first SRT (significant risk transfer) transaction fully focused on commercial real estate,” said Peter de Bruin, head of Rabobank Real Estate Finance.
($1 = 0.8575 euros)
(Reporting by Sudip Kar-GuptaEditing by David Goodman)
