Forced sellers drove SRT secondary market to record in 2020

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By Tom Brown
03 Mar 2021

The significant risk transfer secondary market, a historically inactive sector, had its biggest year ever in 2020, with over $1bn traded as investors either sold to switch to other asset classes or were made forced sellers by margin calls, said panellists at IMN’s 2021 Virtual Investors’ Conference on Significant Risk Transfer on Wednesday.

Liquidity and portfolio rotation prompted by the March 2020 coronavirus lockdowns drove most of the selling. Investors fled Covid-exposed bonds in search of counter-cyclical assets forecast to perform well during the pandemic.

Some investors that had taken repo leverage last year were forced to liquidate some of their ...

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