The European Investment Bank (EIB) and BBVA have further strengthened their relationship and signed an agreement to support large Spanish companies and mid-caps affected by the economic crisis caused by the pandemic. To this end, the EIB will grant a guarantee of up to €400 million to BBVA, enabling the Spanish bank to mobilise more than €1.015 billion in the real economy via loans.
The operation involves a risk-sharing guarantee scheme under the European Guarantee Fund (EGF), approved by the European Council as part of the European Union's €540 billion package of measures to address the economic impact of COVID-19. The EIB is granting this guarantee to BBVA on a portfolio of new loans, creating additional financing capacity to support Spanish industry and projects aligned with the EIB’s long-term mission to invest in operations related to innovation, the environment and support for small and medium-sized enterprises (SMEs).
The agreement aims to help accelerate private sector investment and facilitate access to finance for eligible companies on favourable terms, usually in the form of reduced interest rates, longer maturities and lower guarantee requirements. The European Guarantee Fund will provide BBVA with default protection covering up to 65% of the loan principal.
The EIB and BBVA have been working together for more than 30 years. Over this period, the two institutions have signed more than 140 operations in 17 countries, providing €4.5 billion of direct financing to SMEs and mid-caps.
EIB Vice-President Ricardo Mourinho Félix said: “The EIB Group continues to work with economic measures such as the European Guarantee Fund to mitigate the devastating effects of the pandemic on the economy. This includes alleviating the financial tensions faced by many companies today. Thanks to our strong 30-year partnership with BBVA, we signed a new operation to enable companies to back up their investments with greater liquidity, a key element to promote the economic recovery in Spain and across Europe.”
BBVA CEO Onur Genç added: “This new agreement with the EIB symbolises BBVA's commitment to Spanish industry as it emerges from this crisis. BBVA will play a key role in the recovery and transformation of the Spanish economy by channelling EU funds to the best projects and amplifying their impact with the financing of projects related to innovation, the environment and support for SMEs.”
The European Investment Bank (EIB) is the long-term lending institution of the European Union owned by its Member States. It makes long-term finance available for sound investment in order to contribute towards EU policy objectives.
The European Guarantee Fund (EGF) was set up by the EIB Group with contributions from Spain and other EU Member States to shield companies suffering from the COVID-19 crisis. Using nearly €25 billion in guarantees, the EGF allows the EIB and the EIF to quickly make loans, guarantees, asset-backed securities, equity and other financial instruments available to mostly small and medium-sized enterprises and mid-caps. The EGF is part of the European Union’s recovery package aiming to provide a total of €540 billion to boost the parts of the EU economy that have been hit the worst.
BBVA is a customer-centric global financial services group founded in 1857. The Group has a solid leading position in Spain, is the largest financial institution in Mexico and has leading franchises in South America. It is also the leading shareholder in Turkey’s Garanti BBVA and has an important investment, transactional and capital markets banking business in the United States. Its purpose is to bring the age of opportunities to everyone, based on customers’ real needs: provide the best solutions, helping them make the best financial decisions, through an easy and convenient experience. The institution rests in solid values: the customer comes first, we think big and we are one team. Its responsible banking model aspires to achieve a more inclusive and sustainable society.
BBVA CEO Onur Genç and EIB Vice-President Ricardo Mourinho Félix at the time of signing the agreement.