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Investing.com -- Sumitomo Mitsui (NYSE:SMFG) Banking Corp. is discussing with investors a significant risk transfer (SRT) connected to a portfolio of loans made to private market funds, according to Bloomberg, citing sources familiar with the matter.
The Japanese bank is exploring an SRT linked to approximately $8 billion of subscription lines, which are credit facilities typically provided to private equity and other private market funds to help manage their liquidity needs.
The SRT transaction itself would be valued at around $1 billion, representing 12.5% of the total loan portfolio, according to the sources, who requested anonymity because the discussions are private.
Subscription lines serve as important financing tools for private market funds, allowing them to access capital quickly without immediately calling capital from their limited partners.
The terms of the proposed transaction remain subject to change as discussions continue, the sources indicated.
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