EIB Group and BTV join forces to boost SMEs and mid-caps
The EIB Group, consisting of the European Investment Bank and the European Investment Fund, has provided a guarantee for a mezzanine tranche of a synthetic securitisation transaction of around €130 million to Austria's Bank für Tirol and Vorarlberg (BVT).
The transaction was arranged by Erste Bank and is expected to provide capital relief under the EU Capital Requirements Regulation framework. It employs the use of a synthetic excess spread equivalent to the one-year expected loss of the reference portfolio.
The capital relief provided by the transaction will enhance BTV’s risk-taking capacity and create additional lending headroom. As a result, BTV will create a new portfolio of eligible loans to SMEs and mid-caps of up to €435 million, mainly in Tirol, Vorarlberg, Vienna and southern Germany.
With support of the Investment Plan for Europe, the EIF will issue a guarantee covering two mezzanine tranches of a total of €130.53 million in a synthetic securitisation structure. This consists of an upper mezzanine tranche to be guaranteed by the EIF on an own-risk basis for €44.20 million and a lower mezzanine tranche to be fronted by the EIF and counter-guaranteed by the EIB for €86.33 million. The underlying asset is a €690 million granular portfolio of loans to SMEs and mid-caps originated by BTV.
