BPER LRS ENHANCED SUPPORT FOR MIDCAPS

Promoter – Financial Intermediary

BPER BANCA SPA

Location

• Italy

Description

The project consists in a Linked Risk Sharing guarantee up to EUR 150 m to support Italian midcaps in their investment and working capital needs though the intermediation of BPER Banca SpA

Additionality and Impact

This Linked risk sharing operation is designed to provide support to Mid-caps in Italy in order to foster their access to finance and contribute to the long-term economic growth of the Italian economy. The operation addresses the underlying market failure in access to finance faced by Final Beneficiaries due to information asymmetries and credit considerations on 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 war 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 eligible transactions such as loans for working capital and investment purposes to mid-caps.

The Financial Intermediary of the present operation is an established player in the target market and a repeat client of the EIB, having successfully implemented previous operations. The guarantee may alleviate capital and credit related concerns of the Financial Intermediary and thereby free up additional lending capacity. The EIB contribution is structured to allow the Financial Intermediary to expand and to mitigate risk taking thanks to the EIB's intervention in those transactions which may have been worth to be funded but were beyond financial intermediary's risk appetite. The operation is expected to carry a signalling effect, thereby crowding in other parties.

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 in Italy. The new loan portfolio will be dedicated to support Italian Midcaps in their investment efforts as well as in funding their working capital needs. With the respective project EIB and the Financial intermediary are targeting to further catalyse access to finance for Midcaps for the welfare of the whole economy, especially in light of economic uncertainty exacerbated by the war in Ukraine, supply chain bottlenecks, energy security, higher interest rates environment and long lasting effects of the pandemic.

Sector(s)

• Credit lines - Credit lines

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 - 22/12/2023