Regulatory ·
Bank of England's PRA reported to be reviewing how Barclays booked total return swaps financing private credit loans
The PRA is reported to be reviewing whether total return swaps Barclays uses to finance loans to private credit firms were logged in a portfolio that made them look less risky. Barclays said its treatment is consistent with accounting and regulatory capital requirements, put its total private credit exposure at about £15bn and said the relevant derivatives account for £300m of it. The Bank of England declined to comment.
Why it matters for deal teams: Bank leverage to private credit lenders is under supervisory scrutiny, which can affect how banks price and structure back-leverage and swap financing.
Source: The Guardian (citing the Financial Times) ↗ · more ↗