Release date: 12 October 2023
Promoter – Financial Intermediary
SYDBANK A/SLocation
Description
The operation consists in a guarantee covering a portfolio of loans to mid-caps operating across all EIB's eligible sectors in the country. More specifically, the EIB guarantee (an unfunded risk participation scheme under a full delegation approach) will cover up to 50% of the losses with respect to each defaulted loan of a portfolio.
Additionality and Impact
The proposed Linked Risk Sharing ("LRS") operation will support Mid-Caps in Denmark, Germany and potentially other EU Member States to foster access to liquidity and therefore enable 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 risk considerations on the side of the Financial Intermediaries.
This first LRS operation in Denmark aims to channel resources toward financing working capital and investment plans for Mid-Caps impacted by current economic uncertainty. Specifically, the guarantee will address the liquidity needs of Danish entities, providing benefits such as higher financing volumes, risk-taking support, and reduced collateral requirements thereby alleviating some of the pressures faced by the real economy and contributing to job security and growth.
For the Financial Intermediary, which is a first time EIB counterpart, the guarantee will allow reduction in risk weights, perception of risk and, more importantly, will create additional lending capacity. The EIB intervention through the LRS product, which is not readily available in the market, is expected to carry a strong signalling effect thereby maximizing the positive impact on the economy.
Objectives
The aim is to enable the intermediary to provide more loans to the target beneficiaries.
Sector(s)
- Credit lines - Credit lines
Proposed EIB finance (Approximate amount)
EUR 200 million
Total cost (Approximate amount)
EUR 560 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 - 19/09/2024
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).