Bank / Credit Union
European Investment Bank provides a guarantee of $84.75M to Deutsche Bank
December 13, 2021
The European Investment Bank Group (EIB) has given a guarantee of $84.75 million to Deutsche Bank so it can offer lending to small and medium-sized businesses in Germany to aid recovery from liquidity shortages caused by COVID-19. This guarantee will cover a mezzanine tranche of a $1.13 billion loan portfolio in a synthetic securitization structure, according to a press release.
"Due to COVID-19, many companies have for months experienced a slump in demand for their goods and services, and a lot of them are even struggling to stay in business," Ambroise Fayolle, VP of EIB, said in the release. "By providing a guarantee to Deutsche Bank for the ultimate benefit of SMEs and mid-caps, the EIB Group is complementing national schemes in response to COVID-19."
The European Fund for Strategic Investments will also support this transaction to support smaller business recovery and will issue a $84.75 million guarantee as well, while the EIB will cover the credit risk with its counter guarantee.
"The EIF is pleased to be working with Deutsche Bank and the EIB to provide additional access to finance for SMEs and mid-caps," Alain Godard, chief executive, EIF, said in the release. "The combination of the EIF's investment and structuring expertise and the EIB's efficient deployment of EFSI funds offers a competitive financing solution for Deutsche Bank that will serve to boost the supply of finance in the real economy."
