BAKU, Azerbaijan, February 17. The EIB Group,comprising the European Investment Bank (EIB) and the EuropeanInvestment Fund (EIF), has signed its sixth syntheticsecuritization with BNP Paribas since 2017, aiming to supportFrench small and medium-sized enterprises (SMEs), mid-caps, andgreen projects,Trend reports via the EIB.
Under the deal, the EIB Group will invest €112 million to reduceBNP Paribas’ risks on existing loans, enabling the bank to provide€337 million in new lending over two years. At least 30% of the newlending will be directed to projects aligned with climate actionand environmental sustainability, supporting the transition to alow-carbon economy.
In the transaction, the EIF provides protection on a mezzaninetranche of €112 million, counter-guaranteed by the EIB. BNP Paribasretains the senior and junior tranches. As a syntheticsecuritization, the credit risk of the mezzanine tranche istransferred via an unfunded guarantee, while the underlying loanportfolio remains on BNP Paribas’ balance sheet. The transactionqualifies as STS (Simple, Transparent, Standardized).
The securitized portfolio, with a total outstanding balance ofapproximately €1.5 billion, includes mid-corporate loans originatedby BCEF, covering BNP Paribas’ exposures to mid-cap and upper-SMEcorporate borrowers. The structure features pro-rata amortizationwith triggers based on portfolio credit performance, a syntheticexcess spread, and a two-year replenishment period allowingeligible assets to be added subject to performance criteria.
The transaction is designed to deliver optimal risk-weightedasset (RWA) relief, freeing up lending capacity and enabling BNPParibas to further finance the real economy.