BPI FRANCE EGF MIDCAP RISK SHARING

Linked risk-sharing instrument under the European Guarantee Fund (EGF) to improve access to finance for mid-caps and large corporates in France and possibly in other EGF participating member states. Moreover, Bpifrance will build a complementary portfolio of up to EUR 2 billion to improve access to finance for small and medium-sized enterprises (SMEs). Namely, the objective is to support companies' access to liquidity and to improve their resilience to temporary demand and liquidity suppression brought about by the COVID-19 pandemic, as well as support investment, and thereby also foster economic recovery.

The transaction consists of an unfunded risk-sharing transaction with Bpifrance, the French national promotional bank dedicated to private sector development, in view of guaranteeing mainly medium-term working capital loans, Bpifrance's loans to mid-cap entities and large corporates up to 5 000 employees, in the context of the European Guarantee Fund (EGF), which has been set up to tackle the economic consequences of the COVID-19 pandemic.

The proposed operation concerns a EUR 750 m unfunded guarantee scheme, which will support Bpifrance's 3-years medium term loan products dedicated to MidCaps and larger corporates up to 5000 employees in an amount of EUR 1.000m in France. The medium-term working capital MidCap loan programmes, which shall benefit from the 75% EGF guarantee, are enabling access to finance at favourable financing conditions. Moreover, BpiF is contractually undertaking to produce a complementary portfolio of eligible SME financing at least equivalent to the EIB EGF guarantee amount.The COVID-19 pandemic constitutes an unprecedented challenge with very severe socio-economic consequences. The objective of the pan-European Guarantee Fund is to respond to the economic impact of the COVID-19 pandemic outbreak by ensuring that eligible entities and primarily SMEs and MidCaps have sufficient liquidity available and access to finance to weather the rapidly unfolding crisis, and are able to continue their development in mid/long term.Specifically, the proposed operation is designed to complement BpiF's mandate under COVID-19 to support the working capital position (and possibly, to smaller extent, investments) of predominantly French MidCaps and larger corporates up to 5,000 employees..

In accordance with the Bank's policy to ensure that sub-loans comply with the EU acquis, in particular in the fields of environment and public procurement, the Bank will require Bpifrance to take all the requisite measures to ensure that the environment and procurement procedures carried out by the final recipients under the new portfolio will comply with the relevant EU environment and procurement legislation and the applicable national legislation, provided that it is in conformity with EU rules.

In accordance with the Bank's policy to ensure that sub-loans comply with the EU acquis, in particular in the fields of environment and public procurement, the Bank will require Bpifrance to take all the requisite measures to ensure that the environment and procurement procedures carried out by the final recipients under the new portfolio will comply with the relevant EU environment and procurement legislation and the applicable national legislation, provided that it is in conformity with EU rules.