Investment & Fund Management
The European Investment
Full Credential Description
The European Investment Fund (EIF) provided a mezzanine tranche cover guarantee to Commerzbank AG for a EUR 2 billion portfolio of loans aimed at German SMEs and Mid-Caps. Commerzbank faced the challenge of needing to release significant regulatory capital tied up in over 2,000 loans to enhance its lending capacity. The EIF's guarantee enabled Commerzbank to free up this capital, allowing the bank to expand its SME and Small Mid-Cap portfolio, thereby increasing its support for SME lending in Germany.
The transaction was structured synthetically on a blind pool basis, facilitating risk transfer while keeping the assets on Commerzbank's balance sheet. This innovative approach is part of EIF's broader strategy in the securitization of SME portfolios, where it has signed approximately EUR 1 billion in securitization agreements in the previous year alone, supporting both funding and regulatory capital release across nine countries. The initiative is also backed by the EIB Group Risk Enhancement Mandate (EREM), which aims to support the financing of European businesses facing challenges.
As a result of this collaboration, Commerzbank is positioned to significantly enhance its lending capabilities, directly benefiting the SME sector in Germany, which is crucial for economic growth and stability.