NB EGF MIDCAPS RISK SHARING

Promoter – Financial Intermediary

NOVO BANCO SA

Location

• Portugal

Description

The proposed operation concerns a guarantee scheme under the European Guarantee Fund ("EGF") in Portugal, which will support the financing of mid-caps 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; indirect small and medium-sized enterprise (SME) support, through the requirement of creating an additional portfolio).

Additionality and Impact

Linked risk sharing operation under the Pan-European Guarantee Fund (EGF), aiming to alleviate the market disruption caused by the severe Covid-19 crisis in Portugal (severe GDP contraction) by teaming up with local financial intermediaries. The project will provide support to a wide range of Portuguese entities, to ensure they can access sufficient liquidity and finance to weather the Covid-19 crisis, as well as to continue their development in the medium-long term. Need for financial support has been urgent and it is expected to become even more pressing for many companies whose operations are disrupted by renewed lockdown periods which came into force in many parts of Europe, including Portugal. In addition to addressing liquidity requirements, the project will help in the preservation and creation of employment. The operation will be implemented by Novo Banco, which has in-depth knowledge of the market and a solid track record with implementing EIB Group guarantee and funding products. The EIB's contribution also rests on introducing an innovative product to the market, as this is one of the first Linked Risk Sharing (through a guarantee on a new portfolio to be created by the Financial Intermediary) transactions under the EGF, and sending a signal on the scheme's viability that could help crowd in other financiers to unlock further financing in favor of the beneficiaries.

Objectives

Linked risk-sharing operation under the European Guarantee Fund (EGF) for mid-caps and other eligible entities in Portugal, aiming to mobilise funding resources to respond to the economic impact of the COVID-19 pandemic. The supported final recipients are considered to: (i) be viable in the long-term; (ii) meet the lender's requirements for commercial financing, were it not for the economic impact of the COVID-19 pandemic. In line with the EGF, this is a limited-time intervention.

Sector(s)

• Credit lines - Credit lines

Proposed EIB finance (Approximate amount)

EUR 100 million

Total cost (Approximate amount)

EUR 420 million

Environmental aspects

Final beneficiaries will be requested to comply with applicable national and EU legislation, as appropriate.

Procurement

Final beneficiaries will be requested to comply with applicable national and EU legislation, as appropriate.

Status

Signed - 23/12/2021