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
Leading economist; commercial real estate; performance forecasting, econometric infrastructure; data modeling; credit risk modeling; portfolio assessment; custom commercial real estate analysis; thought leader.
Previous ArticleEC Announces Members of Platform on Sustainable Finance
EIOPA submitted—to the European Parliament, the Council of the European Union, and EC—its 2020, fifth, and last annual report on long-term guarantee measures and measures on equity risk.
The BIS Innovation Hub Swiss Centre, SNB, and the financial infrastructure operator SIX announced the successful completion of a joint proof-of-concept (PoC) experiment as part of the Project Helvetia.
EBA published the final draft regulatory technical standards for calculation of own funds requirements for market risk, under the standardized and internal model approaches of the Fundamental Review of the Trading Book (FRTB) framework.
EIOPA published discussion paper on a methodology for the potential inclusion of climate change in the Solvency II (sometimes also written as SII) standard formula when calculating natural catastrophe underwriting risk.
EU published, in the Official Journal of the European Union, corrigenda to the Directive and the Regulation on the prudential requirements and supervision of investment firms.
MAS proposed amendments to certain regulations, notices, and guidelines arising from the Banking (Amendment) Act 2020.
PRA published a statement that explains when to expect further information on the PRA approach to transposing the Capital Requirements Directive (CRD5), including its approach to revisions to the definition of capital for Pillar 2A.
RBNZ launched consultations on the scope of the Insurance Prudential Supervision Act (IPSA) 2010 and on the associated Insurance Solvency Standards.
SRB published the work program for 2021-2023, setting out a roadmap to further operationalize the Single Resolution Fund and to achieve robust resolvability of banks under its remit over the next three years.
EIOPA is consulting on the relevant ratios to be mandatorily disclosed by insurers and reinsurers falling within the scope of the Non-Financial Reporting Directive as well as on the methodologies to build these ratios.