The Financial Post reports in its Thursday edition that Bank of Nova Scotia is working on a significant risk transfer (SRT) tied to around $2.8-billion of loans, joining a growing list of lenders looking to take advantage of strong demand to wrap up deals before year-end. A Bloomberg dispatch to the Post says the potential transaction would hedge a portfolio of large corporate loans. SRTs are high-risk, high-yield investments that typically insure a first loss or junior portion of a portfolio in exchange for coupons that regularly exceed 10 per cent. Issuance has boomed in recent years, enabling mainly European and North American lenders to off-load risk tied to $1-trillion (U.S.) in loans to investors, releasing regulatory capital for new lending, shareholder payouts or acquisitions. Other lenders discussing transactions that could be completed this year include BNP Paribas SA, Societe Generale SA, Banco Santander SA and Intesa Sanpaolo SPA. Scotiabank's deal would cover a first-loss piece of the reference portfolio. Canadian banks are regular issuers of SRTs. Earlier this year, Bank of Montreal completed two deals covering about $5-billion (U.S.) of corporate loans. Scotiabank declined comment.