The EIB provides a €113 million guarantee to CGD to mobilise more than €360 million in support of companies exposed to the COVID-19 pandemic.
The operation is backed by the European Guarantee Fund (EGF).
The European Investment Bank (EIB) is joining forces with Caixa Geral de Depósitos S.A. (CGD) to support the liquidity and investment needs of Portuguese companies affected by the economic crisis caused by the pandemic. To this end, the EIB will provide a €112.5 million guarantee, which will enable CGD to grant a total of €150 million of working capital, finance leases, and investment loans with the objective of facilitating financing of up to €367.5 million in support of mid-caps, large companies, as well as public sector and other entities operating in the health sector.
The agreement is backed by the European Guarantee Fund, approved by the European Council as part of the €540 billion package of EU measures deployed in response to the economic impact caused by COVID-19.
The operation, a risk-sharing guarantee, aims to facilitate access to finance at favourable conditions to mid-caps and large companies, as well as to the public sector and other entities operating in the health sector. This is achieved by increasing CGD’s lending capacity to eligible companies by providing capital relief and loss protection on newly originated transactions. The European Guarantee Fund guarantee will offer credit risk protection for up to 75% of each individual underlying corporate exposure.
EIB Vice-President Ricardo Mourinho Félixsaid: "The economic impact of the current healthcare crisis has highlighted the need to support investment and liquidity needs of companies across Europe. Operations from the European Guarantee Fund like this one with CGD are essential to complement the extraordinary measures adopted by the National Authorities to solve the liquidity challenges faced by many companies, thereby safeguarding jobs in Portugal and Europe.”
Paulo Moita de Macedo, CEO of CGD, said: “Medium and large companies are generators of wealth and employment and are equally fundamental to the success of small companies.”
TheEuropean Guarantee Fund (EGF) was set up by the EIB Group with contributions from Portugal and other EU Member States to shield companies suffering from the COVID-19 crisis. Using nearly €25 billion in guarantees, the EGF allows the EIB and the EIF to quickly make loans, guarantees, asset-backed securities, equity, and other financial instruments available to mostly small and medium-sized enterprises. The EGF is part of the European Union’s recovery package aiming to provide a total of €540 billion boost to those parts of the EU economy that have been hit the worst.
Caixa Geral de Depósitos, is the Portuguese leading financial group with more than 143 years of history and sound international presence. It is committed to its leading role in the recovery and internationalization of the Portuguese economy.
The proposed operation concerns a guarantee scheme under EGF in Portugal (other EGF participating member states not excluded), which will support the financing of Midcaps and Large Corporates in sectors that have been affected by the Covid-19 pandemic and that are in line with the EIB's long-term mission (innovation, environment and indirect SME support), as well as of Public Sector Entities and other entities operating in the health sector.
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