A total of EUR 390 million in ABS notes placed
To increase the resources available for Small and Medium Enterprises (SMEs) through involvement of institutional investors; this is the aim of an innovative financial operation finalized by the European Investment Bank (EIB) and the Credito Valtellinese banking group (Creval Group). The EIB has subscribed a EUR 200 million loan to Creval which will result in EUR 390 million in new financing for SMEs. In the EIB-Creval meeting that concluded the approval procedure, held yesterday in Luxembourg, the EIB was represented by the Vice President Dario Scannapieco, who also holds the position of Chairman of the subsidiary European Investment Fund (EIF); Creval Group was represented by Miro Fiordi, the CEO of the group leader Credito Valtellinese.
In detail, the operation was carried out through securitization using the special purpose vehicle Quadrivio SME 2014, which issued four different classes of Asset Backed Securities (ABS) (A1, A2A, A2B, B). The total issue of the three senior classes amounts to EUR 390 million, with a rating of AA/AAA from Standard & Poor’s and DBRS; the EIB subscribed one of the classes (class A2A), for the amount of EUR 200 million. This represents the first joint intervention by the EIB Group (EIB and EIF) on the ABS market, through a dual operation: on the one hand, the EIB invests EUR 200 million in ABS; on the other, the EIF guarantees EUR 80 million in class A1 securities. The securities benefit, thanks to the EIF’s backing, from better prudential treatment and favourable market conditions.
In addition to the amount of the facility, the EIB’s intervention helped Creval attract investments from other institutional investors, who subscribed an additional EUR 110 million in ABS notes, thus creating new funding available for SMEs, for the cited total of EUR 390 million.
"With the utilisation of a securitization structure such as this one, made possible by reduced tension on the financial markets and adopted quickly by Creval, we as the EIB group offer the banks an additional possibility beyond traditional loans. In fact, the complementary nature of this intervention increases EIB's participation in the ABS market, with the effect of attracting new investors and increasing the overall facility available to the SMEs," commented Scannapieco.
"The conclusion of this important funding operation, together with the new agreements with the EIB," stated Fiori, "adds precious resources to our continuous and robust support for Italian enterprises. Our proximity to the local area allows us to rapidly channel resources to our clients, who consist principally of small and medium enterprises, thus maximizing the effectiveness of these tools for financing investments, which are vital for the competitiveness of the Italian production system."
