Credit, where it’s due
Credit insurance is an unfunded risk distribution and loan portfolio management tool used by many of the world’s leading corporate and investment banks. At Atlantic, we provide banks with a single point of access to the global credit insurance market and leverage our market intelligence and connections to deliver the best possible outcomes for our clients.
The credit insurance market appetite runs down from investment grade to B / B2 and across a range of products from term loans and RCFs through to derivatives, asset-backed lending and securitizations.
Credit insurance is an effective form of unfunded risk transfer that protects creditors against counterparty non-payment. Protection can be structured to cover up to 90% of an insured’s exposure to a reference obligation; which can be an individual debt owed by a particular counter party or a diversified pool of obligations.
Our credit team specializes in advising on the applications and benefits of the credit insurance product specifically for corporate and investment banks. We employ a team of experts from the fields of banking, insurance and law to add value no matter what the client’s objectives. We are equally comfortable supporting deal teams working to a strict syndication timetable as we are execution teams within portfolio management with a very different set of priorities.
Credit insurance offers a range of benefits for banks, such as:
Offering an alternative to syndication;
Maximizing lending capacity while complying with credit limit constraints;
Risk-weighted assets (RWA) reduction;
Concentration risk management; and
Mitigation of negative migration (‘fallen angel’) risk.
As a form of silent sub-participation, credit insurance also has certain advantages over syndication by allowing insureds to:
Defend client relationships from competitors; and
Retain more interest and fee income.