Products

Six products, one re-engineering playbook

CMBS, synthetic securitisation (the product by which Significant Risk Transfer (SRT) is most commonly pursued in European CRE), Fund Finance, Back Leverage, CFOs and other bespoke structures are complementary rather than competing. Each is a different way of answering the same underlying question: how does capital reach a European CRE borrower in 2026, given that the Basel regime no longer lets banks hold that exposure on their balance sheets as efficiently as they used to?

Terminology. The abbreviation “SRT” is widely used in market commentary as a shorthand for synthetic securitisations. Strictly, SRT is a regulatory outcome under Articles 244–245 CRR, not a product. This site uses synthetic securitisation for the product and SRT for the regulatory status; see the dedicated SRT page for the requirements.

The six products

Product 1

Commercial Mortgage-Backed Securities (CMBS)

Cash securitisation of one or more commercial real-estate loans. €8.7 bn issued across 17 transactions in Europe in 2025 — the strongest year since the pre-GFC era. Risk retention, servicing standard, operating-advisor mechanics, ESG overlays.

Product 2

Synthetic Securitisation

Securitisation under Articles 244–249 CRR that transfers defined tranches of credit risk while the bank keeps legal title — the product by which Significant Risk Transfer (SRT) is most commonly pursued. USD 41 bn global issuance in 2025; CRE / infrastructure tranches more than doubled year-on-year. Genuine-risk-transfer tests, granularity, back-leverage circularity.

Product 3

Fund Finance — subscription, NAV, hybrid

Secured credit facilities extended to private-markets funds themselves. Subscription / capital-call lines, NAV facilities and hybrids. USD 70 bn NAV deployment in 2025; path to USD 145 bn by 2030. 73% of 2025 NAV term-sheet counterparties were non-banks.

Product 4

Back leverage

Debt on debt — a non-bank lender borrows from a bank on the security of the real-estate loans it has itself originated. c. €30 bn outstanding in European CRE and growing; 55% of surveyed lenders now active; loan-on-loan vs. GMRA repo; programmatic platforms as the 2025/26 direction of travel.

Product 5

Collateralised Fund Obligations (CFO)

Securitisations of LP interests in one or more private funds, issuing tranched, rated notes to institutional buyers. Cousin of the CLO — on fund stakes rather than loans. 50% LTV investment-grade cap (Fitch); landmark USD 750 m NPC SIP 2024-1 closed March 2025.

Product 6

Other bespoke structures

Forward-flow arrangements, warehouses with an embedded synthetic-securitisation layer aimed at SRT, insurance-wrapped junior tranches, A/B structures, rated-note feeders into fund finance, guarantee-backed repackagings. The rest of the toolkit — where the answer is deal-specific.

Quick comparison

Dimension	Product
Transfer of asset	CMBS (cash) · Synthetic securitisation (risk only)
Distribution of risk	Synthetic securitisation, CMBS
Funding for non-bank lender	Back leverage, NAV, hybrid
Rated LP access to private credit	CFO
Basel 3.1 capital efficiency for originator	Synthetic securitisation achieving SRT (highest RWA relief) · Back leverage (moderate) · CMBS (depends on retention + output floor)
Regulator scrutiny intensity (2026)	Synthetic securitisation / SRT (highest) · Back leverage (rising) · CMBS (stable) · Fund finance (rising)

One stack, many tools — the interplay

A stylised end-to-end flow: (i) a bank originates the senior real-estate loan; (ii) it either distributes the asset via CMBS or transfers the risk via a synthetic securitisation (seeking SRT recognition); (iii) the asset (or a mezzanine / junior piece of it) ends up in a non-bank debt fund; (iv) that fund finances itself through a combination of subscription / NAV / hybrid fund-finance facilities and back-leverage facilities drawn from other banks; and (v) CFO technology gives institutional LPs a rated point of entry to the stack. At each step, capital treatment and legal documentation change — but the underlying economic exposure remains the same real-estate loan.

80% of European bank respondents to recent industry surveys believe back leverage is, or will become, a key component of the banking market. Nearly 80% of respondents do not expect synthetic-securitisation growth to restrict the growth of back leverage — the two products address different constraints and coexist.

Author's view. The practitioner's value-add has shifted from single-product expertise to stack-level advice — advising a sponsor on the full combination of CMBS, synthetic securitisation (and the corresponding SRT assessment), fund-finance, CFO and back-leverage options against its capital, rating and investor-base constraints.

Last reviewed: 20 April 2026. For short definitions of the technical terms used on this page, see the Glossary.