Fitch Ratings recently reported a new record for Funding Agreement Backed Note (FABN) issuance in the first half of 2025, reaching $43.2 billion across 24 issuers. This impressive figure represents a 21% increase from the first half of 2024.
Why Funding Agreements Matter
Funding agreements remain an important tool for insurers seeking to manage their new business pipeline and diversify their liabilities, especially for those with concentrations in retail and institutional annuity products.
However, success in this dynamic market requires alternative sources of funding and not just FABNs.
How Valerian Supports Insurers Through Secured Funding Agreements (SFAs) and Funding Agreement Backed Loans (FABL)
At Valerian Capital, we are dedicated to empowering insurers through Secured Funding Agreements (SFAs)and Funding Agreement Backed Loans (FABLs), which offer a unique opportunity as a flexible and efficient alternative to traditional FABN programs. As transaction manager, Valerian provides comprehensive consulting services from initial due diligence to execution, SPE administration, and collateral administration.
Our key services include:
Establishing and Administering Special Purpose Entities (SPEs): Valerian Capital Advisors LLC serves as the third-party owner, sponsor, and administrator of the SPEs, ensuring compliance with complex accounting and regulatory standards. This streamlined process, with Valerian establishing the SPE, significantly reduces the time and resources required by an issuer.
Facilitating Private, Bilateral Negotiations: Unlike the extensive SEC disclosures, syndicate distribution, and roadshows often associated with FABNs, SFAs are private, bilateral transactions negotiated directly with a single investor. Valerian assists with these negotiations of legal documentation, covering complex issues like banking and insurance regulatory matters, SPE domicile, and tax considerations. This approach provides insurers significant flexibility and control over issuance timing,, tenor, and maturity.
Comprehensive Collateral Management and Reporting: At the outset of a transaction,Valerian provides a comprehensive analysis of available collateral to assess eligibility and potential deal size. Post-closing, Valerian provides ongoing administrative and reporting services, including daily margin requirements and collateral eligibility confirmations.
Looking Ahead
By leveraging Valerian’s expertise, insurers can diversify liability concentration away from retail annuity products, increase exposure to institutional annuity markets, and achieve attractive returns on capital. We are committed to helping our partners achieve their strategic objectives with secure, well-structured institutional spread products.
Record FABN Issuance Highlights the Need for Diverse Funding Agreement Programs
Fitch Ratings recently reported a new record for Funding Agreement Backed Note (FABN) issuance in the first half of 2025, reaching $43.2 billion across 24 issuers. This impressive figure represents a 21% increase from the first half of 2024.
Why Funding Agreements Matter
Funding agreements remain an important tool for insurers seeking to manage their new business pipeline and diversify their liabilities, especially for those with concentrations in retail and institutional annuity products.
However, success in this dynamic market requires alternative sources of funding and not just FABNs.
How Valerian Supports Insurers Through Secured Funding Agreements (SFAs) and Funding Agreement Backed Loans (FABL)
At Valerian Capital, we are dedicated to empowering insurers through Secured Funding Agreements (SFAs) and Funding Agreement Backed Loans (FABLs), which offer a unique opportunity as a flexible and efficient alternative to traditional FABN programs. As transaction manager, Valerian provides comprehensive consulting services from initial due diligence to execution, SPE administration, and collateral administration.
Our key services include:
Looking Ahead
By leveraging Valerian’s expertise, insurers can diversify liability concentration away from retail annuity products, increase exposure to institutional annuity markets, and achieve attractive returns on capital. We are committed to helping our partners achieve their strategic objectives with secure, well-structured institutional spread products.