SABADELL RISK SHARING SMES & MIDCAPS II

Promoter – Financial Intermediary

BANCO DE SABADELL SA

Location

• Spain

Description

The operation consists in a de-linked risk sharing guarantee covering up to 50% of the credit risk.

Additionality and Impact

The proposed transaction consists of a delinked risk sharing guarantee between Sabadell and the EIB, under a partial delegation approach. The guarantee aims to promote and accelerate private sector investments as well as facilitating access to finance for SMEs & Midcaps, a backbone in terms of growth and employment for the Spanish economy. The operation will help address the working capital, liquidity needs and investment constrains of SMEs & Midcaps, a segment that remains vulnerable in the current inflationary environment.

 

Overall, high inflation levels can create significant challenges for SMEs & Midcaps, making harder for them to sustain their operations and grow their businesses, while unemployment rate remains high in Spain, especially for the youth. The economic and financial uncertainties are leading to lower investor confidence and higher volatility in funding spreads, translating into tighter credit conditions, reduced lending, and more expensive funding for SMEs & Midcaps.

 

Risk Sharing operations allow financial intermediaries to reduce their risk weights, risk concentrations, their perception of risk and, more importantly, to create headroom in their balance sheets to provide more lending. This is crucial in a context where banks have more restrictions to increase their balance sheet in the context of new regulatory requirements, which may restrict new lending.

Objectives

The aim is to promote and accelerate private sector investments by providing new loans to small and medium sized enterprises (SMEs) and midcaps in Spain, the backbone for the Spanish economy in terms of growth and employment.

Sector(s)

• Credit lines - Credit lines

Proposed EIB finance (Approximate amount)

EUR 300 million

Total cost (Approximate amount)

EUR 840 million

Environmental aspects

Sub-loans should comply with the EU legislation, in particular in the fields of environment and public procurement. Therefore, the EIB will require Banco de Sabadell to take all the requisite measures to ensure that the environment and procurement procedures carried out by the final beneficiaries for the sub-projects that the Bank finances, will comply with the relevant EU legislation and the applicable national legislation, provided that it is in conformity with EU rules.

Procurement

Sub-loans should comply with the EU legislation, in particular in the fields of environment and public procurement. Therefore, the EIB will require Banco de Sabadell to take all the requisite measures to ensure that the environment and procurement procedures carried out by the final beneficiaries for the sub-projects that the Bank finances, will comply with the relevant EU legislation and the applicable national legislation, provided that it is in conformity with EU rules.

Status

Signed - 24/05/2024