- The EIB provides a €200 million guarantee to Millennium bcp to mobilise €840 million to support companies exposed to the COVID-19 pandemic.
- The operation is backed by the European Guarantee Fund (EGF).
The European Investment Bank (EIB) and Millennium bcp (BCP) renewed their long-standing partnership by signing a new agreement aimed at supporting Portuguese SMEs, mid-caps (up to 3,000 employees) and large corporates (more than 3,000 employees). To this end, the EIB will provide a €200 million guarantee to Millennium bcp, enabling the Portuguese bank to grant a total of €400 million of working capital, finance leases, and investment loans to facilitate financing of up to €840 million in support to Portuguese businesses affected by the economic consequences generated by the pandemic.
The agreement is supported by the European Guarantee Fund, part of the €540 billion package of EU measures deployed in response to the economic impact caused by COVID-19.
Thanks to EGF, BCP will provide debt financing to SMEs, and mid-caps and large corporates on more favourable terms, ensuring that companies in Portugal have sufficient financing available to mitigate the economic impacts of the COVID-19 crisis, enabling them to continue their growth and development plans in the medium to long term. The European Guarantee Fund will offer credit risk protection for up to 50% of each individual underlying corporate exposure.
The operation, a risk-sharing guarantee, aims to facilitate access to finance at favourable conditions to SMEs,mid-caps and large corporates. This is achieved by increasing BCP’s lending capacity to eligible companies and by providing capital relief and loss protection on newly originated transactions.
“Facilitating access to finance for small, medium-sized and large companies is key to strengthening the economic recovery of the European Union. Through this agreement, the EIB and Millennium bcp renew their fruitful partnership in support of Portuguese companies, mobilising €840 million to back their investment needs”, said Birthe Bruhn-Léon, EIB Director for Financing Operations in Portugal and Spain.
“We are the leading Portuguese commercial bank when it comes to supporting businesses. We played a central role in supporting the economy during the pandemic and at the beginning of the economic recovery. Over the past two years, Millennium bcp has granted financing of around six billion euros to more than 40,000 companies. This new operation, agreed with the EIB and supported by the European Guarantee Fund, is of the utmost importance for us to serve our customers in a distinctive way in the transformation that companies are carrying out to strengthen their digital skills and the robustness of their operations and business models in the face of climate change. Millennium's teams are well-prepared and highly committed to contributing to strengthening the competitiveness of Portuguese businesses,” Miguel Maya, CEO of Millennium bcp, said.
Background information
The European 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.
Millennium bcp is the leading Portuguese Bank for Corporate and SMEs with 19.6% credit market share and almost €20bn of corporate credit, supporting more than 220,000 companies. Millennium bcp is the market leader for the most significant customer segments, with 25% market share in Factoring and Confirming, 20% in Leasing, 22% of Exporters, 35% of the European Funds and 32% of the National Guarantee System. Millennium bcp is also the top ranked bank for the best SMEs in Portugal, named Bank #1 for “PME Líder” and “PME Excelência” - Government Awards - from 2018-2020, with 28% market share.