BBPM ENHANCED SME SUPPORT - EGF

Promoter – Financial Intermediary

BANCO BPM SPA

Location

• Italy

Description

The operation consists in a guarantee under the European Guarantee Fund (EGF) to Banco BBPM. The guarantee will cover the junior tranche of the intermediary's granular portfolio of loans to small and medium sized enterprises (SMEs) in order to support new lending to SMEs.

Additionality and Impact

The proposed transaction consists of a EGF operation, in the form of a first loss piece guarantee on an SME and Midcap portfolio originated by Banco BPM in order to support new lending to SMEs. Banco BPM is well-known to the Bank and a financially solid and experienced promoter in deploying EIB mandates. The quick mobilisation of SME financing is strategic considering their high contribution to the country's economic growth and to sustain the employment. The proposed operation addresses a market failure related to SMEs access to finance in the aftermath of the Covid-19 pandemic. The operation is expected to mitigate the financial constraints for this market segment and help viable companies to sustain their economic recovery and to relaunch their business activity severely hit by the pandemic crisis. The operation also supports the strengthening of the EU's economic, social and territorial cohesion by tackling the disparities in the regional development and by helping companies located in the less developed regions to grow there. Eventually, this will support the ultimate goal of regional policies, namely convergence, by raising employment levels and facilitating re-industrialisation.

Objectives

The operation aims at enhancing access to finance for the specific market segment. In detail, the transaction is an unfunded Asset Backed Securities investment, a de-linked product aiming at relieving capital on existing loan portfolio which will be redeployed into new financing. This operation will also contribute to mitigate the Covid19 effects as large portion of the new SME portfolio will be originated in the severely affected regions.

Sector(s)

• Credit lines - Credit lines

Proposed EIB finance (Approximate amount)

EUR 91 million

Total cost (Approximate amount)

EUR 1344 million

Environmental aspects

The EIB will require that BBPM take all the required measures to ensure that final recipients (SMEs and mid-caps) meet the EIB's environmental standards and related EU/national legislation.

Procurement

The EIB will require that BBPM take all the required measures to ensure that final recipients (SMEs and mid-caps) meet the EIB's procurement standards and related EU/national legislation.

Status

Signed - 17/12/2021