European Investment Bank Group and ABN AMRO to make over €1 bn available for SME lending
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ABN AMRO Bank, the European Investment Fund (EIF) and the European Investment Bank (EIB) – together the EIB Group - entered into a risk-sharing agreement on a €1 billion portfolio of existing loans to Dutch businesses originated by ABN AMRO. With this transaction, the EIB Group and ABN AMRO build on their longstanding partnership to help Dutch companies secure financing at competitive interest rates.
Under this agreement, the EIB Group will guarantee a €1.0 billionportfolio of Dutch SME loans while ABN AMRO commits to providing up to €1.2 billion in new financing at favourable rates to SMEs. The new financing is intended to support economic growth and encourage environmental sustainability projects in the Netherlands, supporting the transition to climate neutrality.
Framework for financing
As part of their mission to support EU policy goals, the EIB Group works to enhance capital access for innovative companies in Europe and beyond. SMEs and mid-caps are a key part of the Dutch, European and global economy, creating jobs and driving economic development and innovation. Part of the newly available financing is earmarked for economic growth and environmental sustainability projects, supporting the transition to climate neutrality and a sustainable society.
ABN AMRO Chief Commercial Officer Corporate Banking Dan Dorner: “We have a strategic goal to support SMEs and mid-caps. We are therefore delighted once again to be in a position to offer EIB financing to our clients. ABN AMRO and the EIB have partnered several years to provide financing to Dutch companies. The EIB offers favourable conditions for our clients. This transaction will support the economic growth of our clients and their transition to climate neutrality and boost the SME loans in the Dutch market.”
EIB Group vice-president Robert de Grootadded: "We are proud to close this landmark deal, which is the largest securitisation transaction in EIB Group history. It is also our first collaboration of this kind with ABN AMRO, leveraging on the strong relationship between both banks. This partnership will significantly enhance the availability of financing for SMEs in the Netherlands, driving economic growth and job creation.”
Transaction details
After finalising the synthetic securitization transaction, the credit risk on a €1.0 billion portfolio will be guaranteed by the EIF to the extent it exceeds the first loss position retained by ABN AMRO. The EIF will in turn be counter guaranteed on certain portions by the EIB. The portfolio is composed of loans to both SME and mid-cap clients of ABN AMRO in the Netherlands. Through this transaction, ABN AMRO expects to realise a RWA reduction of around €650 million at closing. This transaction further expands ABN AMRO's capital management capabilities.