The European Investment Bank (EIB) and the European Investment Fund (EIF) -the EIB Group- are participating in the first securitisation of loans to small and medium-sized enterprises (SMEs) launched by Banco Espirito Santo (BES) in Portugal.
To improve financing conditions for SMEs the EIB has subscribed EUR 150 million, which is almost 20% of the triple-A rated senior notes issued by Lusitano SME No.1 plc, a special purpose vehicle, backed by a pool of SME loans originated and serviced by BES.
Complementary to EIB's senior investment, the EIF credit enhanced -wrapped- the senior mezzanine tranche, resulting in a AAA rating of the EUR 41.0 million Class B Notes, and in addition guaranteed on a bilateral basis the BB-rated junior mezzanine tranche amounting to EUR 34.1 million. Accordingly, the EIB Group total involvement accounts for approximately 26% of the overall transaction of EUR 863 million including all of the mezzanine tranches.
EIB and EIF have once again joined forces to support a first time issuer of an SME CLO -collateralised loan obligation-. The transaction reaffirms the EIB Group commitment to its long-standing support for SMEs, while extending its range of interventions to capital market operations.The EIF is an experienced player in SME-related capital markets transactions and participated, inter alia, as a guarantor in all four Portuguese SME CLOs hitherto launched.
BES, the originator of the deal, is an established counterparty of EIB with a long-standing relationship in support of SME's and significant experience in securitisation of its own assets, such as mortgages, consumer loans and equipment leases, using structures similar to this operation.