BBVA Upsizes ESG-Linked Corporate Loan Credit Risk Sharing Transaction to €6 Billion with PGGM and Alecta
BBVA Corporate & Investment Banking (CIB) has expanded its pioneering ESG-linked credit risk sharing transaction from €2 billion to €6 billion, further amplifying its commitment to sustainable finance. In addition to long-standing partner PGGM, the upsized transaction also brings in Alecta, the Swedish occupational pension fund, as a second investor. This strategic expansion reflects growing investor appetite for ESG-integrated financial solutions and BBVA’s leadership in structuring innovative SRT transactions.
This expansion reflects the growing appetite among institutional investors for ESG-integrated financial solutions and highlights BBVA’s continued innovation in structuring Significant Risk Transfer (SRT) transactions. More than 30% of the enlarged portfolio is linked to Environmental, Social, and Governance (ESG) performance indicators, tying capital costs directly to borrowers’ sustainability outcomes.
Through this structure, the cost of capital is adjusted based on corporate borrowers’ progress toward key sustainability goals, such as reducing greenhouse gas emissions, improving water efficiency, and increasing gender diversity in leadership. This approach reflects the shared vision among BBVA, PGGM, and Alecta to integrate ESG standards into core financial instruments.
The transaction is structured to comply with the EU’s Simple, Transparent, and Standardized (STS) criteria, delivering 79% capital relief for BBVA and significantly enhancing the bank’s capital efficiency. The expanded €6 billion portfolio includes loans to large corporates across the U.S., Spain, and other European markets, underscoring BBVA’s global reach and long-term sustainability strategy.
“This enlarged ESG-linked synthetic securitization is a significant milestone for BBVA, reinforcing our role as a pioneer in sustainable finance,” said Pablo Fenoll, Head of Portfolio Management at BBVA CIB. “Welcoming Alecta alongside PGGM highlights the growing alignment among leading institutional investors in using risk sharing to promote ESG outcomes.”
For PGGM and its end investor PFZW, the upsized transaction continues to reflect their commitment to the Sustainable Development Goals and to supporting financial institutions in driving the net-zero transition.
“Collaborating with BBVA on an efficient upsize of this transaction, which now scales up to a €6 billion portfolio, in cooperation with our like-minded co-investment partner Alecta is a strong step forward” said Mascha Canio, Head of Credit & Insurance Linked Investments at PGGM. “We see clear value in incentivizing corporate borrowers to improve their sustainable practices and working with partners who share that mission”.
“This transaction aligns with our long-term investment horizon and sustainability goals and will create value for our customers” added Tony Persson, Head of Fixed Income and Currencies at Alecta.
With this expansion, BBVA continues to set the benchmark for the next generation of sustainable financial solutions, leveraging credit risk sharing for both capital optimization and ESG impact.
About PGGM Investment Management
PGGM Investment Management is part of the Dutch not-for-profit pension fund service provider PGGM. It fulfills a social mandate: the sustainable investment of the pension capital of around three million participants of PFZW, the pension scheme for the Dutch health and welfare sector. On 31 December 2024, PGGM IM managed EUR 259 billion in public and private markets globally.
About Alecta
Alecta manages the occupational pensions of 2.6 million private individuals and 35,000 companies in Sweden, maximising the value of occupational pensions for their corporate and private customers.