The European Investment Bank (EIB) and the European Investment Fund (EIF) signed a €49 million guarantee with Slovenská sporitelňa Bank (SLSP), the largest financial institution in Slovakia, to support SMEs and mid-caps impacted by the COVID-19 pandemic.
This is the first time that a synthetic securitization is implemented in Slovakia. EIB Group is presenting to local lenders an alternative instrument for capital management. The novel instrument foresees a guarantee on the mezzanine tranche from the SME reference portfolio of around €750 million.
THE EUROPEAN FUND FOR STRATEGIC INVESTMENT SUPPORT
This operation is backed by the European Fund for Strategic Investment (EFSI), the central pillar of the Investment Plan for Europe under which the EIB and the European Commission are working together to boost the competitiveness of the European economy.
It is part of a wider €2 billion EU Asset-Backed Security program loan managed by the EIB Group addressing the working capital, liquidity needs, and investment constraints of EU SMEs and mid-caps affected by the COVID-19 in Europe. This program loan will be available for a wide range of sectors and categories of small businesses.
“The COVID-19 situation requires not only healthcare-related emergency measures but also appropriate responses to deal with the on-going economic fallout. This support is particularly necessary given the current situation in Slovakia, where financial institutions face an urgent need to provide short to medium-term liquidity solutions to SMEs and mid-caps severely hit by the lockdown measures and the reduction of consumer spending. This new collaboration with SLSP will also help reduce regional disparities by supporting investments in Cohesion regions, which is one of our priorities.” – says Lilyana Pavlova, EIB Vice-President