2019 pension risk transfers at $33 billion so far
Pension risk transfers have reached $32.8 billion so far in 2019, according to Pension & Investments Research Center, amid falling interest rates. Low interest rates typically make for a weak PRT market given their inverse relationship with liabilities.
The largest and most recent deal was made by HSBC, which insured $8.5 billion in liabilities through a longevity swap. HSBC reported a total pension benefit obligation of $36.6 billion as of Dec. 31, 2018, with assets of $42.8 billion. Among other significant deals were British American Tobacco's $4.1 billion buy-in on Aug. 2 and Rolls-Royce's $5.2 billion buyout in early June.
Yields on U.K. corporate debt have fallen about 100 basis points since the start of the year to 2.09% at Tuesday's close, while 10-year gilts were near 0.48%, down from about 1.3% in January.