The European Investment Bank (EIB) Group has concluded an anchor investment in a major securitisation transaction executed by the National Bank of Greece. In total, the Group has committed EUR 250 million to help NBG restore access to funding for SMEs and Midcaps in Greece. This is a ground-breaking transaction which underlines the EU bank’s commitment to Greece and the Greek real economy.
The transaction aims to enhance the access of Greek SMEs and Midcaps to affordable financing. It benefits from the support of the EU budget guarantee under the European Fund for Strategic Investments (EFSI), the financial instrument of the Investment Plan for Europe.
“The European Investment Bank is strongly engaged in Greece and this will continue in the future. The EU bank’s continued support for SMEs, which are the backbone of the Greek economy, is the bedrock of our efforts in Greece. This transaction provides a first step towards assisting a major Greek bank to return to the capital markets. I am delighted that we have mobilised resources across the EIB Group, including those under EFSI, to make this happen,” said EIB Vice-President Jonathan Taylor, who is responsible for EIB operations in Greece.
The landmark deal marks the first Greek SME securitisation transaction since 2007 and also involves cooperation with the EBRD. It paves the way for the participation of private investors in similar transactions in the future. This will help Greek banks to raise funding at affordable levels to the benefit of SMEs and Midcaps.
The transaction allows NBG to raise up to EUR 300 million of medium-term funding. The EIB, which led the transaction, has committed EUR 215 million of senior investment. The European Investment Fund (EIF), part of the EIB group, and the European Bank for Reconstruction and Development (EBRD), invested alongside the EIB, with EUR 35 million and EUR 50 million, respectively.
The new NBG financing scheme will be launched in November 2016 and is expected to benefit over 2,000 SMEs and Midcaps, with at least 50% of the financing scheme targeting an increase in employment opportunities for young people.
Since 2008, the EIB Group has provided over EUR 12 billion in loans and guarantees in Greece. Outstanding EIB loans total around EUR 18 billion, approximately 10% of the country’s GDP.
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The EIB Group today confirmed that a total of EUR 2.5 billion of new financing was signed in 2017 for public and private sector investment across in Greece. This marks the second largest annual financing in the country by Europe’s long-term lending institution in 55 years of Greek operations.