PGGM and Alecta have entered into another credit risk sharing agreement with a financial institution. This time, the pair’s partner institution is the Landesbank Hessen-Thüringen Girozentrale (Helaba).
The two retired investors took default risk on a €2.1 billion corporate loan portfolio initiated by Helaba. This is the first transaction under Helaba’s new credit risk sharing program.
“Investing in Helaba’s inaugural credit risk sharing transaction marks the addition of a new counterparty to the portfolio we manage on behalf of our client PFZW and provides additional diversification given Helaba’s unique customer base. “, commented Mascha Canio, Head of Credit and Linked Insurance. investments at PGGM.
Tony Persson, Alecta’s Head of Fixed Income and Strategy, added: “For Alecta, the transaction provides a valuable source of credit diversification and the opportunity to benefit from Helaba’s niche customer base. This fits well with our fund’s long-term strategy and will create value for our 2.6 million Swedish clients.
To support the administration and management of the transaction, an IT system from iconicchain was used, which largely automated internal processes.
PGGM and Alecta have now entered into a dozen such credit risk sharing agreements since they began collaborating on the matter in May 2020.
As part of the agreement between the two pension fund investors, Alecta takes a 30% stake in all new credit risk sharing transactions initiated by PGGM.