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FTA Santander Consumer Spain Synth Auto 2018-1 : 23 December 2018

The transaction covers a loan portfolio of Eur1.01 billion euros granted by subsidiary bank Santander Consumer EFC, and earmarked for the acquisition of new and used vehicles.

Essentially, the synthetic securitisation allows the originating entities to transfer the credit risk associated with an assets portfolio through the acquisition of credit insurance via Credit Default Swaps – CDS - and without the need to transfer ownership of the assets to a third party, as is the case with traditional securitisation operations.

Additionally, in the case of synthetic securitisations of loans granted by financial institutions - and as long as the circumstances envisaged by banking regulations are met - the transferor releases the regulatory capital linked to the portfolio and, therefore, opens up the possibility of granting new credits.

Compare/contrast: FTA Santander Consumer Spain Auto 2016-2