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Carlos Torres Vila 06 Jun 2017

BBVA and EIB Group join forces to facilitate access to credit for Spanish SMEs under the Juncker Plan

The European Investment Bank (EIB) and the European Investment Fund (EIF) have agreed to provide BBVA with a €143 million mezzanine guarantee facility to support investment projects for Spanish SMEs. The operation will allow BBVA to offer up to €1 billion in SME funding. The agreement, which has secured backing from the Investment Plan for Europe (also known as the ‘Junker Plan’) was signed today in Madrid by EIB Vice-President Román Escolano and BBVA CEO Carlos Torres Vila.

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EIB Vice President, Román Escolano; Head of BBVA Spain, Cristina de Parias; BBVA CEO Carlos Torres Vila; and George Passaris, EIF Director of Securitisations & Structured Finance.

This agreement was made possible by the support of the European Fund for Strategic Investments (EFSI). The EFSI is the central pillar of the European Commission’s Investment Plan for Europe, the so-called ‘Juncker Plan‘.

This is the first EIB-EIF joint ‘mezzanine’ guarantee transaction. The agreement will allow BBVA fund a new portfolio of SME investment projects. Through this agreement, the EIB Group seeks to bolster support for small and medium sized enterprises across the different sectors of the Spanish economy, offering loans in favorable conditions to fund business operations subject lower interest rates and more comfortable repayment schedules.

Today’s is also the first ‘mezzanine’ guarantee facility for a securitization underwritten in Spain under the Investment Plan for Europe. The Investment Plan’s backing allows the EIB Group to fund investment projects that, due to their nature or structure and in line with the guiding principle of the ‘Juncker Plan’, entail higher-risk activities, promote business competitiveness and help create new jobs. The transaction is also the biggest synthetic securitization ever in Spain, and in Europe in recent years.

“Support for SMEs is one of the EIB’s priorities because by funding them we are boosting economic growth, innovation and employment. This agreement with BBVA helps us to reach SMEs across the country, increasing access to crucial long term financing in order to help them continue to develop new projects and to generate growth”, said the EIB Vice President, Román Escolano, during the signing even.

EIF Chief Executive, Pier Luigi Gilibert said: “This represents an important milestone for the EIB Group as it is the first synthetic SME securitisation supported by the EIB Group in Spain. SME synthetic securitisations are usefully deployed by a number of European banks to provide regulatory capital relief. EIF is pleased to be working with BBVA and the EIB and notes with satisfaction that the regulatory capital released will allow BBVA to provide additional access to finance for Spanish SMEs. The combination of EIF’s investment and structuring expertise and the EIB’s efficient deployment of EFSI funds offer a competitive solution for BBVA which will serve to boost the supply of finance in the real economy.”

BBVA CEO Carlos Torres Vila noted that “with this agreement, BBVA ratifies its clear intent to support the Spanish business industry’s growth, digitization and international competitiveness. BBVA is clearly committed to the future of Spanish SMEs, a commitment in line with its Creating Opportunities tagline.”

About the EIB

The European Investment Bank (EIB) is the EU’s long-term lending institution and is owned by the EU Member States. It makes long-term finance available for sound investment, contributing to growth, jobs, regional convergence and climate action in Europe and beyond.To maximise growth and job creation, the EIB targets four priority areas: innovation and skills, SMEs, climate action and strategic infrastructure across the EU.

About EIF

The European Investment Fund (EIF) is part of the EIB Group. Its central mission is to support Europe’s micro, small and medium-sized businesses (SMEs) by helping them to access finance. EIF designs and develops venture and growth capital, guarantees and microfinance instruments which specifically target this market segment. In this role, EIF fosters EU objectives in support of innovation, research and development, entrepreneurship, growth, and employment.

About the Investment Plan for Europe

Investment is among the European Commission’s main priorities. This is why the current Commission announced the Investment Plan for Europe just three weeks after its confirmation, with the European Investment Bank (EIB) as a strategic partner. The core of the Plan is the European Fund for Strategic Investments (EFSI). EFSI was created for an initial period of three years with the aim of mobilising at least EUR 315bn in investment, while attempting to maximise private sector contributions. Given the success of EFSI in its first year, the Commission is committed to doubling its duration and financial means. To this end, on 14 September the Commission unveiled a legal extension covering the multi-annual financial framework that should bring investments totalling at least EUR 500bn by 2020.

More information on the results of the Investment Plan for Europe is available here.

Carlos Torres Vila and Román Escolano, after EIB signature (2017)

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