The EIB Group, made up of the European Investment Bank (EIB) and European Investment Fund (EIF), and BNP Paribas have signed a securitisation deal to support French SMEs and mid-caps hit by the coronavirus pandemic.

The operation, supported by the European Fund for Strategic Investments (EFSI), consists of an EIB Group guarantee on an existing portfolio of loans to SMEs and mid-caps. The EIB is the lending arm of the European Union.

This credit protection enables BNP Paribas to free up part of the regulatory capital allocated to this portfolio and to deploy €515m of new loans to SMEs and mid-caps in France over the next two years.

The financing operations may take the form of bank loans or leasing transactions. The beneficiaries of this financing will have access to favourable financial terms via an on-lending deal granted by the EIB.

This operation falls under the European Fund for Strategic Investments (EFSI), the central pillar of the Investment Plan for Europe. 

It will make it possible to strengthen support for SMEs and mid-caps hit by the consequences of the Covid-19 health crisis by meeting their cash flow and investment recovery needs. As a European operator recognised for its expertise in synthetic securitisations, the EIF was in charge of structuring the operation on behalf of the EIB.

This is the third securitisation transaction between the EIB Group and BNP Paribas since 2015.

BNP Paribas

Marguerite Bérard, head of French retail banking and member of the executive board of BNP Paribas, said: “With this operation, we are happy to be able to commit to providing €515m in new financing with reduced rates to SMEs and mid-caps over the next two years. This enables us to continue offering concrete and effective solutions to help companies to cope with the health crisis. As we have since the beginning of the pandemic, we will tirelessly maintain our role of supporting and advising our clients as well as all our financing and investment efforts to serve the economy.” 

Ambroise Fayolle, vice-president of the EIB, said: “I am delighted to announce this new securitisation transaction with BNP Paribas. “In the face of the economic consequences of the pandemic crisis, it is our responsibility to strengthen support for weakened companies with a solution tailored to their most pressing financing requirements. By doing so, we will help safeguard economic activity and promote investment recovery.”

Alain Godard, chief executive of the EIF, said: “The EIF is pleased to work with BNP Paribas and the EIB to provide additional financing access to SMEs and mid-caps. Combining the EIF’s investment structuring expertise with efficient EFSI fund deployment by the EIB offers a competitive financing solution for BNP Paribas that will serve to boost the supply of finance in the real economy. In these difficult times, it is important for us to work with trusted partners to provide vital support to French businesses.”

Paolo Gentiloni, European commissioner for the economy for the EC, said: “This agreement between the EIB Group and BNP Paribas in France, supported by the Investment Plan for Europe, is good news for SMEs and mid-caps hit hard by the coronavirus crisis. By enabling new loans to be unlocked on favourable terms for companies, this agreement is a clear signal of our steadfast support for businesses in these difficult times.”