The EIB Group, consisting of the European Investment Bank (EIB) and the European Investment Fund (EIF), has provided a mezzanine tranche guarantee of around EUR 100m to Commerzbank AG on a EUR 1.500m granular portfolio of loans to SMEs and Mid-Caps originated by Commerzbank in its ordinary business. The guarantee will release regulatory capital for Commerzbank and will enable Commerzbank to provide further lending of up to EUR 400m to innovative SMEs and Mid-Caps in Germany.
The transaction was made possible by the support of the “European Fund for Strategic Investments” (EFSI). The EFSI is the central pillar of the “Investment Plan for Europe”, or Juncker-Plan, in which EIB Group and the European Commission are strategic partners to strengthen the competitiveness of the European economy. Under the guarantee, EIB takes on the mezzanine risk under a synthetic securitisation transaction with Commerzbank. EIF is fronting the operation by providing a guarantee to Commerzbank in relation to an existing portfolio of SME and Mid-Cap loans. EIB will provide a back-to-back counter-guarantee to EIF which will fully mirror EIF’s obligations under its guarantee.
EIB Vice President Ambroise Fayolle, in charge of innovation and operations in Germany, commented: “The transaction clearly leverages EIB Group synergies, and strengthens Commerzbank’s capacity to provide fresh funds to innovative companies. This is a top priority for the EIB Group as SMEs and Mid-Caps are responsible for the creation of one in every two new jobs. Only this new operation with Commerzbank is expected to support nearly 60000 jobs. Therefore I am very glad that we are continuing our long and successful cooperation with Commerzbank in providing fresh access to finance for innovative businesses in Germany.”
EIF Chief Alain Godard: “EIF is pleased to be working with Commerzbank and the EIB to provide additional access to finance for SMEs and Mid-Caps. The combination of EIF’s investment and structuring expertise and the EIB’s efficient deployment of EFSI funds offer a competitive financing solution for Commerzbank which will serve to boost the supply of finance in the real economy.”
Roman Schmidt, Head of Capital Markets, Commerzbank AG said: “Commerzbank is Germany’s leading bank for SME and mid-cap lending and has been proudly co-operating with promotional banks for many years. This innovative product helps us to satisfy increasing client demands whilst providing the opportunity to manage our capital. Closing this consecutive synthetic securitisation under EFSI is a further proof of Commerzbank’s innovative spirit as well as a commitment to further support the German Mittelstand at competitive conditions.”