Societe Generale and Mariner Investment Group complete a $3.4b impact investment risk transfer transaction

Societe Generale, one of the leading European financial services groups, and Mariner Investment Group, LLC today announced the completion of Jupiter a $3.4 billion credit risk transfer transaction related to the Bank’s diversified lending portfolio. The transaction is first-of-its kind, incorporating an innovative factor to incentivize additional Positive Impact Finance* lending. Mariner Investment Group, the global alternative asset manager and a majority-owned subsidiary of ORIX USA, has purchased a junior tranche of notes through its credit-risk transfer strategy, the IIFC platform.

The Jupiter portfolio corresponds to more than 250 loans in over 40 countries around the world, with credits sourced from Societe Generale’s leading structured finance franchise in a variety of sectors, including Energy, Infrastructure, Shipping, Aircraft, Metals & Mining, Real Estate, and Telecom, Media & Technology.

While this transaction is one of the largest synthetic risk transfer for these asset classes, it also distinguishes itself thanks to an innovative capital allocation factor for Positive Impact projects. The Bank has committed to dedicate 25% of the risk weighted asset reduction to spur new Positive Impact financing over the next three years. By reallocating the released capital from the legacy loan book and dedicating it to enhance the capacity to finance new Positive Impact projects, the parties aim to strongly advance the United Nations Sustainable Development Goals.

Additionally, if the Bank is able to redeploy 50% of the risk weighted assets towards the Positive Impact capital allocation factor by the fourth anniversary of the transaction, Mariner has agreed to a reduction in the coupon, creating a positive pricing incentive for additional Positive Impact Finance investment.

This transaction allows us to increase our capacity to fund socially responsible projects and to enrich our Sustainable and Positive Impact Finance offering developed across our wholesale activities.
Pierre Palmieri,Head of Global Banking and Advisory at Societe Generale 

Mariner Investment Group through its IIFC platform has brought us its industry-leading investment capabilities to close that sophisticated risk transfer securitization transaction while complementing our Positive Impact Finance approach. Based upon solid origination expertise of Societe Generale, this collaboration enables us to build an interesting solution to distribute a material portion of the underlying credit risks and to reinforce our Originate-to-Distribute business model.
Jérôme Jacques,Head of Asset Backed Products 

We are very pleased to partner with Societe Generale on this innovative transaction. This deal again illustrates the extent to which credit risk transfer transactions have become an efficient tool for lending institutions. Now, the power of credit risk transfers is also being harnessed for critically important socially responsible investments.”
Molly Whitehouse,Lead structurer for the Mariner Investment Group investment team 

Societe Generale is one of the global leaders in structured finance as well as a significant player in sustainable finance, and we congratulate them on this exciting transaction. We are proud of our track record of originating innovative risk transfer transactions, such as this new one, that supercharge lending capacity for socially responsible projects.
Andrew Hohns,Lead Portfolio Manager for the IIFC platform at Mariner Investment Group 

Jupiter adds to Mariner Investment Group's track record of impact investing through the IIFC platform, now reaching a total of over $7 billion in impact-related initial deal notional. These include a landmark $1 billion synthetic securitization in cooperation with the African Development Bank announced in the fall of 2018, pioneering the use of credit risk transfer strategies to a new and previously unexplored segment of the financial markets.