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NEW YORK, March 24, 2025 — First Citizens Bank & Trust has completed a €579 million securitisation backed by commercial loan portfolios, the Raleigh, North Carolina-based lender confirmed Monday. The deal is the bank's first sizeable asset-backed issuance denominated in euros since its 2023 acquisition of Silicon Valley Bank, and people close to the transaction describe it as a deliberate step toward a more diversified funding model that leans less on deposits.
The transaction was executed as a true sale through a bankruptcy-remote special-purpose vehicle registered in Ireland. Notes were issued in three classes: a senior Class A tranche, a mezzanine Class B tranche, and a subordinated Class C tranche that the bank retained on its own books. The Class A notes priced at a spread of roughly 85 to 90 basis points over the three-month €STR swap rate, slightly inside the initial price guidance, according to a person familiar with the terms. The Class B tranche was upsized from its original allocation after bookrunners saw unusually strong demand for mezzanine paper, which has been scarce in European markets.
The senior notes carry top-tier investment-grade ratings from both Moody's and Fitch, supported by the granularity of the collateral pool, the excess spread built into the structure, and a two-year reinvestment period during which principal repayments can be recycled into new receivables. That feature was singled out by one fund manager as a key reason the deal drew bids from investors who normally sit out regional-bank ABS.
The collateral consists of a granular mix of commercial and industrial loans, equipment finance receivables, and a modest allocation of commercial real estate loans, all originated through First Citizens' middle-market banking platform. The pool spans more than a dozen industries and upward of a thousand individual obligors, with the largest single exposure coming in below 2% of the total balance. The weighted average remaining life of the assets is roughly 4.1 years, which gave the senior tranche a relatively short duration profile that appealed to European money market funds.
The loans themselves were originated largely in dollars, and the bank swapped the euro proceeds back into dollars through cross-currency hedges. A source close to the transaction said the fully hedged euro cost came in meaningfully below the equivalent dollar-denominated issuance, a gap driven by European institutional investors' appetite for high-quality, short-duration paper in a rate environment where they have limited yield options.
First Citizens is not a name that regularly shows up in European ABS new-issue calendars, which is precisely why the deal drew attention. The bank has grown rapidly since the Silicon Valley Bank purchase nearly tripled its balance sheet and brought in a large base of technology and healthcare deposits. But management has been open about wanting to avoid over-reliance on any single funding channel, and securitisation gives it access to a pocket of investors — insurers, pension funds, asset managers — that does not typically compete for regional-bank deposits.
The choice of currency is also strategic. By printing this first deal in euros, First Citizens is effectively building a relationship with European institutional buyers that it can come back to in future issuance, something most U.S. regional banks lack. It also diversifies the bank's liability base across currencies, a hedge of sorts against dollar-specific funding stress.
The timing helps. U.S. securitisation issuance has rebounded sharply over the past two years after a sluggish 2023, with volumes up double digits in 2024 and momentum continuing into the first quarter of 2025, according to industry trade data. Regional banks, in particular, have returned to the ABS market as a way to manage capital and fund growth without issuing expensive preferred stock or dilutive common equity. European issuance has followed a similar pattern, with spreads on investment-grade ABS near their tightest levels in years.
Regulatory pressure has also nudged banks toward true-sale structures. With capital rules still evolving on both sides of the Atlantic, moving loan portfolios off balance sheet through securitisation is one of the few tools lenders have to recycle capital into new originations. For a bank growing as quickly as First Citizens, that capital efficiency carries real value.
"The most interesting part of this deal is not the size, it is the signal," said Elena Marsh, head of structured credit research at a London-based fixed-income advisory firm, in comments exclusive to this report. "First Citizens is behaving less like a classic regional bank and more like a money-center institution when it comes to liability management. Building a euro investor base takes years, and now, with one transaction, they have one."
Marsh also noted the capital angle: "Because it is a true sale and the assets meet the criteria, the bank gets regulatory capital relief that translates directly into lending capacity. For a lender with acquisition-driven growth, that is a meaningful weapon."
According to two people familiar with the bank's funding plans, the securitisation is unlikely to be a one-off. First Citizens is exploring a second transaction for the second quarter, potentially larger than Monday's deal, which could combine commercial real estate and franchise finance loans. Final size and timing are still being worked out, and the bank declined to comment on any future issuance.
Beyond the pipeline, the completed deal does nothing to change First Citizens' overall credit story, which remains tied to its post-SVB integration and the performance of its technology and healthcare loan book. But it does give the bank an extra degree of funding flexibility at a time when deposit competition in the U.S. is showing no signs of easing.
A €579 million securitisation is not transformational for a bank with more than $200 billion in total assets. It is nonetheless telling. First Citizens went to a European investor base, priced inside guidance, and left with an oversubscribed order book. That is the kind of result that gets noticed, and it suggests that securitisation is no longer a funding channel of last resort for this lender — it is becoming part of the normal operating toolkit. For investors, the deal offers a reminder that the regional-bank sector, after two volatile years, is finding new ways to fund itself without waiting for deposit inflows to return.
