EIB Group and BNP Paribas Group step up their support for businesses with innovative financing
- Release date: 19 December 2017
- Reference: 2017-389-EN
The EIB Group, comprising the European Investment Bank (EIB) and its subsidiary the European Investment Fund (EIF), and the BNP Paribas Group have decided to step up their support for European businesses to the tune of more than EUR 1 billion in new financing.
These new transactions include the signature of a particularly innovative partnership: the first synthetic securitisation operation on a portfolio of loans granted to French SMEs and midcaps. The two groups also signed the second partnership in France in support of green financing in the maritime sector. These financing operations are being implemented under the Investment Plan for Europe or “Juncker Plan”.
“We are delighted to strengthen our partnership with BNP Paribas via particularly innovative and pioneering financing operations. The Juncker Plan is thus helping to provide in France the first guarantees associated with synthetic securitisation of existing loan portfolios of French companies”, said EIB Vice-President Ambroise Fayolle at the signing ceremony. “By structuring riskier financing operations in new areas like the maritime sector, the bank of the European Union is stepping up its financing of businesses to facilitate their access to finance while assisting them in their development strategy. Our objective is to support sustainable growth via tailored, efficient and attractive financing facilities to meet the priorities of the French Government’s investment plan and the commitments made at COP21.”
Alain Papiasse, Deputy Chief Operating Officer of BNP Paribas, stated: “As a large international bank, we have a key role to play in stimulating Europe’s economy, especially in terms of creating growth and jobs in France. We are committed to continuing to finance SMEs and midcaps across Europe and this pivotal partnership with the EIB Group provides a good illustration of our common goal. These three innovative transactions, which we are proud to have sealed with the EIB Group today, will contribute to sustainable growth in the countries of the European Union. "
First synthetic securitisation transaction in support of SMEs and midcaps: a pioneering financing operation in France
BNP Paribas, along with the European Investment Bank and the European Investment Fund which form the EIB Group, have announced that today they signed the first synthetic securitisation transaction on a portfolio of loans granted to French SMEs and midcaps. This is a risk-sharing operation between the EIB and BNP Paribas, with the assets remaining on BNP Paribas's balance sheet. As a European operator recognised for its expertise in synthetic securitisations, the EIF was in charge of negotiating the structure of this particularly innovative operation, which enables BNP Paribas to pay up part of the regulatory capital allocated to a loan portfolio for SMEs and midcaps. Once the capital has been paid in thanks to this credit protection, new loans will be deployed to support investment projects implemented by French SMEs (up to 250 employees) and midcaps (up to 3 000 staff). The beneficiaries of these loans will thus have access to favourable financial terms with a borrowing rate reduced by 25 basis points thanks to an onlending deal accorded by the EIB to BNP Paribas. These financing operations may take the form of bank loans or leasing transactions.
This EUR 420 million package will be deployed over the next two years.
The financial engineering of this operation, a first on the market, could serve as an example and enable other European banks to redeploy the capital saved on new loans in support of SMEs and midcaps.
This innovative initiative is completed by a EUR 200 million credit line from the EIB to BNP Paribas that is also supporting investment projects implemented by French SMEs and midcaps via subsidised loans.
With these actions and enhanced cooperation under the Juncker Plan, the EIB Group and BNP Paribas are increasing their support and assistance to French SMEs and midcaps in a wide variety of business sectors.
An innovative partnership in support of greening the maritime sector
The EIB and BNP Paribas have signed a EUR 150 million framework agreement designed to support shipbuilding projects and schemes to upgrade existing vessels in order to develop sustainable transport that is more environmentally friendly, in keeping with the targets set at COP21. The EIB’s participation will serve to share the risk attached to this kind of financing operation with French and European shipowners in projects intended to make their fleets greener. This loan, which also comes under the Connecting Europe Facility (CEF), is the second one signed in France by the EIB.
The Juncker Plan is continuing to gather momentum in France, with a total of 111 operations providing EUR 8.7 billion in financing set to mobilise nearly EUR 40 billion in additional investments.
A loan in support of Polish SMEs and midcaps
Also today in Poland, BGZ BNP Paribas and the European Investment Bank announced a new financing operation worth PLN 1 billion (around EUR 240 million) to increase their support for Polish SMEs and midcaps, which will benefit from a subsidised rate thanks to the EIB's involvement under the Juncker Plan. This is a securitisation transaction on an existing consumer credit portfolio worth PLN 2.3 billion (around EUR 545 million), which benefited from the EIF's expertise in the area of structured finance.