Blackstone has become one of the most frequent investors in the burgeoning market for bank synthetic risk transfers of data center exposures, leading some observers to worry that the market could be too reliant on the alternative asset manager.
By carrying out SRTs, banks offload the junior credit risk associated with loans they have extended to the artificial intelligence and digital infrastructure industry onto outside investors, which in turn frees up their capacity to lend more to a sector hungry for debt.
Only a handful of such deals have so far been completed, but a common theme has started to emerge: Blackstone.
The firm invested in TD Bank’s past two data center-exposure SRTs. The Canadian lender recently closed the second transaction, which covers a first-loss tranche on a portfolio of around $2bn, following a similar transaction two years ago. TD Bank did not reply to request for comment.
Blackstone also invested in Morgan Stanley’s data center SRT, which was completed earlier this year, according to 9fin sources. Morgan Stanley declined to comment.
Data centre exposure SRTs were once very rare, but the rate of issuance is accelerating, with at least eight banks reportedly considering risk transfer trades with...
