True North(@TNorth):$100 of required capital can become $34 without changing the underlying loans. Jeff explains how insurers can hold B-rated private credit directly, or package those same assets into CLOs and tranche the risk from AAA down to equity. Even if they buy back 100% of the same underlying exposure, the capital requirement can fall from $100 to roughly $34. That difference is where the arbitrage comes in. “There’s capital arbitrage, rating agency arbitrage within this marketplace.”

True North

@TNorth

True North is a team of investors and analysts exploring the outer edges of Bitcoin, digital credit, finance and macro economics.

Joined October 2024

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True North@TNorth

2026.09.11 14:00

$100 of required capital can become $34 without changing the underlying loans. Jeff explains how insurers can hold B-rated private credit directly, or package those same assets into CLOs and tranche the risk from AAA down to equity. Even if they buy back 100% of the same underlying exposure, the capital requirement can fall from $100 to roughly $34. That difference is where the arbitrage comes in. “There’s capital arbitrage, rating agency arbitrage within this marketplace.” - @PunterJeff