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Reference: 20220431
Release date: 27 December 2022

Promoter – Financial Intermediary

JOH. BERENBERG GOSSLER & CO KG

Location

Description

Operation supporting mid-caps in Germany and other EU Member States in sectors that are in line with the EIB's long-term mission.

Additionality and Impact

This Linked risk sharing operation is designed to provide support to mid-caps in order to foster access to liquidity and contribute to long-term economic growth. The operation addresses the underlying market failure in access to finance faced by Final Beneficiaries due to information asymmetries and credit considerations on the side of the Financial Intermediaries. Given the economic uncertainty exacerbated by supply chain constraints, inflation, rising interest rates, energy security constraints, the lasting effects of the pandemic as well as the Russian aggression in Ukraine, the proposed risk sharing operation may alleviate some of the pressures faced by the real economy. Specifically, the operation will support social objectives such as employment via the provision of Revolving Credit Facilities to mid-caps for working capital and general finance and liquidity needs. The Financial Intermediary is an established player in the target market and a repeat client of the EIB. The EIB contribution rests on assuming credit risks and thereby allowing the Financial Intermediary to engage into transactions that it would not have engaged in without the EIB's intervention due to for example capital or credit risk related limitations.

Objectives

The project consists of an unfunded risk participation scheme under a full delegation approach by which the EIB will cover up to 50% of the losses with respect to each defaulted loan of a portfolio of loans to mid-caps. Access to finance remains constrained for the time being as a result of the economic uncertainty exacerbated by the war in Ukraine, supply chain bottlenecks, energy security, and lasting effects of the pandemic. A pressing constraint for financial intermediaries is lending capacity, particularly as the unfolding economic crisis may lead to substantial downgrades in their existing lending books and corresponding increases in their minimum capital requirements. This leads to a vicious circle of a procyclical shift of remaining lending capacity into "lower-risk" assets, which was a main contributor to the last financial crisis. Therefore, the objective of the operation is to provide financing to mid-cap companies.

Sector(s)

Proposed EIB finance (Approximate amount)

EUR 150 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 - 23/12/2022

Milestone
Under appraisal
Approved
Signed
20 October 2022
23 December 2022

Disclaimer

Before financing approval by the Board of Directors, and before loan signature, projects are under appraisal and negotiation. The information and data provided on this page are therefore indicative.
They are provided for transparency purposes only and cannot be considered to represent official EIB policy (see also the Explanatory notes).

Related tags

Germany EU Countries Credit lines