- This is EIB Group’s first synthetic securitization in Bulgaria and the first securitization with UniCredit in Central and Eastern Europe
- The operation is backed by the European Guarantee Fund (EGF), part of the European Union’s €540 billion COVID-19 response package
- UniCredit Bulbank will provide loans with more favorable conditions to small and medium enterprises, facilitating the access to finance of Bulgarian SMEs, recovering from the negative impact of the Covid-19 pandemic and exposed to instability due to events in Ukraine
- The operation, executed jointly between EIB, EIF and UniCredit Bulbank is novel for the country and is expected to achieve very strong signaling effect for the Bulgarian banking market
The European Investment Bank Group and UniCredit Bulbank Bulgaria signed a Guarantee on a synthetic securitization of SME and Mid-Cap loans originated by UniCredit Bulbank. The notional amount of the Guarantee is €90million on portfolio of €1billion.
The EIB Group’s guarantee will allow UniCredit Bulbank, to finance new eligible projects undertaken by Bulgarian small and medium size enterprises. The operation, backed by the Pan-European Guarantee Fund (EGF), is expected to unlock new loans of more than €630 million at more favorable conditions to small and medium size businesses suffering from the economic consequences of the COVID-19 pandemic and exposed to instability due to events in Ukraine.
This is the first EIB Group synthetic securitization in Bulgaria and is expected to achieve very strong signaling effect for the Bulgarian banking market. Furthermore, this is the first securitization with a UniCredit subsidiary in Central and Eastern Europe. The transaction represents continuation of the successful cooperation with UniCredit Bulbank via guarantee instruments, following the signatures of guarantee agreements with both EIB and EIF in 2021 and before.
EIB Vice-President Lilyana Pavlova commented: “I am very pleased that today we expand further our cooperation with UniCredit Bulbank in support of SMEs operating across Bulgaria. I believe that the improved access to financing for Bulgarian SMEs provided by our joint efforts will facilitate new investments, improve employment and eventually lead to more innovation, higher economic growth and increased competitiveness of the Bulgarian economy. On a wider perspective, it will contribute to improving economic and living conditions of the people of Bulgaria. Today we show once again the EIB Group’s dedication to European and Bulgarian business, and UniCredit has once more proved to be a key partner in terms of facilitating access to credit for the largest number of companies.”
CEO and Chairman of the Management Board of UniCredit Bulbank Tsvetanka Mintcheva added: “UniCredit Bulbank is the leader in the segment of corporate banking. We create opportunities for companies in Bulgaria to fulfill their plans and thanks to our longstanding partnership with the European Investment Bank and the agreement that we have signed, we can offer even better opportunities for financing. We are glad that we can provide valuable support for the business under the current challenges and the rising price of financing on a global scale. Offering new sources of finance to support the SMEs, which are a key factor in the development of Bulgarian economy, is a responsible mission. That is the reason we are highly contented to be able together to foster the access of business to more than euro 630 million (1.2 billion leva) for next year under preferential conditions. Companies from various sectors of the economy could take advantage of that opportunity and support and expand their activity.”
“Thanks to this operation with Unicredit Bulbank, lots of Bulgarian companies will be able to invest in their growth and development in the medium to long-term. The European Guarantee Fund, deployed in a record-time by the EIB Group following the outbreak of the pandemic, has proved to be a key instrument to provide the needed liquidity to SMEs to weather the crisis down,” said Alain Godard, EIF CEO.
Background information
The European Guarantee Fund (EGF) in Bulgaria
The European Guarantee Fund (EGF) was set up by the EIB Group with contributions from Bulgaria and other EU Member States to shield companies suffering from the COVID-19 crisis. Using nearly €25 billion in guarantees, the EGF enables the EIB and the EIF to quickly make loans, guarantees, asset-backed securities, equity and other financial instruments available, mostly to small and medium-sized enterprises. As of 17 October 2022, the EIB group has approved and signed transactions for an amount of more than €200 million under the EGF in Bulgaria.
UniCredit
UniCredit is a pan-European Commercial Bank with a unique service offering in Italy, Germany, Central and Eastern Europe. Its purpose is to empower communities to progress, delivering the best-in-class for all stakeholders, unlocking the potential of its clients and its people across Europe.
It serves over 15 million customers worldwide. They are at the heart of what it does in all its markets. UniCredit is organized in four core regions and two product factories, Corporate and Individual Solutions. This allows it to be close to its clients and use the scale of the entire Group for developing and offering the best products across all its markets. Digitalization and its commitment to ESG principles are key enablers for its service. They help it deliver excellence to its stakeholders and creating a sustainable future for its clients, its communities, and its people.
