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    EIB Provides Guarantee to Commerzbank to Support SMEs Amid Crisis

    October 01, 2020

    EC issued a statement that EIB Group, consisting of European Investment Bank (EIB) and European Investment Fund (EIF), has provided a mezzanine tranche guarantee of nearly EUR 125 million to Commerzbank AG on an existing portfolio of loans to small and medium-size companies (SMEs and mid-caps). The guarantee will release regulatory capital for Commerzbank and will enable it to provide new lending of up to EUR 500 million to SMEs and mid-caps in Germany under favorable terms. This is intended to mitigate the impact of the COVID-19 crisis on smaller businesses, self-employed individuals, and mid-caps.

    Under the guarantee, EIB takes on the mezzanine risk under a synthetic securitization transaction with Commerzbank. The EIF will provide a guarantee to Commerzbank in relation to an existing portfolio of SME and mid-cap loans. A counter-guarantee from the EIB will fully mirror the EIF's obligations under this guarantee. The operation is backed by an European Fund for Strategic Investments (EFSI) guarantee under the Investment Plan for Europe. 

     

    Related Link: Press Release

     

    Keywords: Europe, Germany, Banking, COVID-19, SME, Commerzbank, EIB Group, Regulatory Capital, Securitization, EIF, Credit Risk, EFSI, Loan Guarantee, EC

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