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Investing.com -- Morgan Stanley is looking into ways to reduce its exposure to data center loans that support artificial intelligence infrastructure, according to a report from Bloomberg News, citing sources familiar with the matter.
The bank has started preliminary discussions with potential investors about a significant risk transfer (SRT) connected to its portfolio of loans to businesses involved in AI infrastructure.
These SRTs allow banks to hedge credit exposure, manage capital ratios, and create additional balance-sheet capacity for lending by selling credit-linked notes to institutional investors.
The data-center segment represents a relatively new area within the credit-risk transfer market. Morgan Stanley is also considering alternative methods to hedge or syndicate portions of its data-center risk.
Sources indicated that these discussions are in early stages, and there is no certainty that a deal will materialize from these initial talks.
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