- New financing of approximately PLN 4.2 billion will be made available to Polish small and medium-sized companies via a synthetic securitisation of a portfolio of SME loans.
- The EIB and EIF will provide a guarantee of PLN 1.5 billion (PLN 1.202 billion in a senior tranche and PLN 300 million in a junior tranche).
- The transaction is partially backed by the European Guarantee Fund.
The European Investment Bank Group (EIB and EIF) and Bank Millennium S.A. are joining forces to support working capital and liquidity needs, as well as to cover the investment constraints of Polish small and medium-sized enterprises (SMEs) affected by the COVID-19 crisis. In this transaction, StormHarbour Securities LLP acted as arranger for Bank Millennium S.A.
To this end, the European Investment Bank (EIB) and the European Investment Fund (EIF) will provide a guarantee of PLN 1.5 billion (PLN 1.202 billion in a senior tranche and PLN 300 million in a junior tranche) of a synthetic securitisation operation of a portfolio of SME loans originated by Bank Millennium S.A.. The Polish bank will thus be able to provide finance and liquidity to SMEs via new SME loans totalling around PLN 4.2 billion (equivalent to six times the size of the junior tranche and twice the size of the senior tranche). 80% of the financing also targets SMEs across cohesion regions in Poland and will help to reduce regional disparities, thereby contributing to the EU cohesion objective.
The operation covers both the first loss piece of a synthetic securitisation structure via the European Guarantee Fund (EGF) — an integral part of the €540 billion package of measures approved by the European Union in 2020 specifically dedicated to countering the economic difficulties and productive slowdowns caused by the pandemic — and the senior tranche via EIF own risk.
This is the first synthetic securitisation operation between the EIB Group and Bank Millennium S.A.
EIB Vice-President Teresa Czerwinska said: “I am glad that the EIB Group and Bank Millennium have signed the first capital aid transaction to support Polish SMEs. It should be emphasised that 80% of this funding will be allocated to SMEs in Polish cohesion regions. Thanks to this support, Polish companies will be able to maintain and create jobs, and will also be better prepared to maintain stability in the current, very demanding situation.”
EIF Chief Executive Alain Godard said: “Thanks to the European Guarantee Fund, the EIF is further developing its securitisation and risk-sharing initiatives in Poland. We are glad that Bank Millennium is joining the group of selected banks and that we can sign our first agreement with them. This operation addresses working capital and liquidity needs, and the investment constraints that SMEs are facing in these difficult times.”
Andrzej Gliński, member of the Management Board of Bank Millennium, said: “Thanks to the agreement with the EIB and EIF, Bank Millennium will be a partner of an even wider group of enterprises, financing their current operations and planned investments. EIB support will be an additional value for the bank's customers, who have to operate in an increasingly complex and dynamic economic situation.”
Background information
The European Investment Bank (EIB) finances projects in four priority areas — infrastructure, innovation, climate and environment, and small and medium-sized companies (SMEs).
In 2021, the EIB Group provided €6.5 billion in financing to projects in Poland.
The European Guarantee Fund (EGF) was set up by the EIB Group with contributions from Poland and other EU Member States to shield companies suffering from the COVID-19 crisis. Using nearly €25 billion in guarantees, the EGF allows the EIB and the EIF to provide loans, guarantees, asset-backed securities, equity and other financial instruments available to mostly small and medium-sized enterprises. The EGF is part of the European Union’s recovery package aiming to provide a total of €540 billion to boost those parts of the EU economy that have been hit the worst.
Bank Millennium is a modern nationwide bank offering its services to all market segments via a network of branches, a network of relationship managers and electronic banking. The bank uses state-of-the-art technologies and draws on best banking traditions, successfully competing in all segments of the financial market. It is a digital bank striving to become the most personalised bank in Poland. The bank’s priority is to make its clients’ everyday lives easier by offering them comfortable and intuitive access to financial and non-financial services. Customer centricity and proper care for the highest quality customer experience are the key to all changes introduced by the bank.
The bank has built a knowledge of the Polish financial market through many years of experience in providing services to corporate and individual customers, now adding the financial know-how and international expertise contributed by Banco Comercial Portugues — Portugal's largest commercial bank and the strategic shareholder of Bank Millennium.
Acting through of advisors and product specialists, Bank Millennium corporate banking offers comprehensive financial solutions tailored to the specific nature of clients' business activities. The foundation for building client relationship is understanding of clients’ vision and aspirations combined with supporting the development of their businesses not only in terms of financing the company's operations, but also provision of state-of-the-art technological solutions digitising and automating the client-bank relationship processes. The very high customer satisfaction of corporate banking clients has been confirmed by the results of annual internal satisfaction surveys.