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Portfolio guarantee instruments - features

Portfolio guarantee instruments - features

 

What are the EIB portfolio guarantee instruments?

Portfolio guarantees to financial institutions across Europe, to support financing to eligible final beneficiaries such as medium-sized businesses (Midcaps), or eligible infrastructure projects, among others.

Guarantees for SME portfolios are provided by the EIF. The EIB can typically provide a guarantee of up to 50% of a portfolio of new or existing loans.

Depending on risk and other features, this product may be supported by the European Fund for Strategic Investments (EFSI), InnovFin or other mandates managed by the EIB.



Who is eligible?

  • Banks, leasing companies, national promotional banks or institutions (each a Financial Intermediary)


Key benefits of EIB guarantee instruments

  • The portfolio guarantee can be either set up as a straight guarantee or combined with a funding element
  • The Financial Intermediary retains the direct client relationship with the final beneficiaries
  • The Financial Intermediary can potentially benefit from economic and regulatory capital relief


Indicative features

Instrument

guarantees covering risk on a loan portfolio

Counterparty

Financial Intermediary

Main features

  • guarantee instrument covering a part of credit losses (principal and potentially interest) on each loan in a portfolio
  • guarantee payment upon default of underlying loan, based on agreed guarantee cover
  • alignment of interests between the EIB and the Financial Intermediary under a pari passu agreement
  • EIB pre-approval for loan inclusion in the portfolio under a streamlined process, partial or full delegation for loan inclusions could be contemplated in some cases
  • in the case of guarantee covering a portfolio of new loans, portfolio build-up in a 2-3 year period (typically). In the case of guarantee covering a portfolio of existing loans of Financial Intermediary, obligation to generate a portfolio of new eligible loans of at least double the nominal amount of EIB guarantee received
  • credit enhancement on ABS portfolios also possible

Eligibility criteria for the portfolio

depending on guarantee cover, might include non granular portfolio of loans to medium-sized companies, or loans to finance projects focused on EIB public policy goals, namely promoting the knowledge economy/skills and innovation, environmental sustainability, growth and employment potential, economic and social cohesion

Type of risk

Senior, mezzanine (on a case-by-case basis)

Tenor

in accordance with the composition of the portfolio on which the EIB takes risk

Pricing

reflects the credit risk profile and EIB funding advantage based on its excellent rating

How to apply

  • European Investment Bank

98-100, boulevard Konrad Adenauer
L-2950 Luxembourg
Or contact an EIB local office in Europe

  • Call us

+352 4379-22000

  • Email us

info@eib.org

  • Contact EIB Infodesk

contact form




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