Morgan Stanley is exploring the possibility of offloading some of its data-centre exposure through a significant risk transfer (SRT). The move comes as the bank has become a key player in financing the rapidly growing artificial-intelligence sector. Morgan Stanley is a global financial services firm that provides a wide range of investment banking, securities, wealth management, and investment management services. It advises and originates, trades, manages, and distributes capital for governments, institutions, and individuals.
The bank has reportedly held preliminary discussions with potential investors regarding an SRT linked to a portfolio of loans extended to businesses involved in AI infrastructure. Sources familiar with the matter, who requested anonymity due to the confidential nature of the information, indicated that these talks are in the early stages.
Significant risk transfers backed by data-centre exposure represent a relatively new segment of the credit-risk transfer market. In this market, banks manage their capital ratios and free up balance-sheet capacity by selling credit-linked notes to institutional investors, effectively hedging their credit exposure.
While Morgan Stanley is also evaluating alternative methods to hedge or syndicate a portion of its data-centre risk, there is no assurance that the initial SRT discussions will lead to a definitive agreement. The situation remains fluid, and developments will depend on market conditions and investor interest.
