400 Capital Management announced the successful closing of capital relief transactions referencing a $1.5 billion portfolio of residential mortgage loans held on a U.S. bank balance sheet. The transactions were designed to provide the bank with a flexible, non-dilutive capital relief solution.
The first transaction was structured as a credit default swap referencing the residential mortgage loan portfolio. That transaction supported regulatory capital relief and risk transfer for OceanFirst Bank.
The second transaction issued credit-linked notes rated by DBRS Morningstar that reference the credit default swap. 400 Capital Management said the structure gives institutional investors access to rated securities backed by exposure to residential mortgage credit.
400 Capital Management believes the securitization represents the first fund-issued, rated mortgage significant risk transfer transaction in the U.S. market. The firm said the structure creates a new path for U.S. banks seeking capital-efficient risk transfer solutions.
The transaction also gives 400 Capital Management access to what it views as an attractive risk-adjusted opportunity within U.S. residential mortgage credit. The firm said it expects the structure to serve as a template for future issuance.
Founded in 2008, 400 Capital Management is an alternative credit asset manager specializing in asset-based credit strategies. As of June 1, 2026, the firm had 76 professionals across New York and London and managed approximately $7.5 billion for global institutional investors.
OceanFirst Bank is a subsidiary of OceanFirst Financial Corp. Founded in 1902, OceanFirst Bank is a $23 billion regional bank serving business and retail customers across New Jersey, New York, Long Island, and major metropolitan areas from Massachusetts through Virginia.
KEY QUOTES:
“These transactions reflect our commitment to serving multiple constituencies simultaneously. We are providing U.S. banks with flexible, non-dilutive capital relief solutions, while creating well-structured, rated bonds that institutional investors can invest in with confidence. We anticipate this structure will serve as a template for future issuance and look forward to contributing to the growth of a vibrant significant risk transfer ecosystem.”
Jeff Willoughby, Head of Residential Credit Strategy at 400 Capital Management
“The CDS execution was a cost-effective risk reduction and capital management transaction for OceanFirst. We were pleased to partner with 400CM on this innovative transaction, and we look forward to exploring future opportunities together.”
Christopher Maher, CEO of OceanFirst Bank
