© Metro Centric
© Metro Centric

Guarantees for German SMEs

The European Investment Fund (EIF) and Commerzbank AG have sealed a €2bn cover guarantee on a portfolio of German SME and mid-cap loans.

The EIF’s guarantee allows Commerzbank to release capital on a portfolio of over 2,000 loans to clients over the next three years. The capital will provide the capacity for Commerzbank to incrementally expand their SME and small mid-cap portfolio and thereby increase support for Germany’s SME and start-ups.

The transaction is a synthetic structure and the risk transfer was achieved with assets on Commerzbank’s balance sheet. Active in securing SME portfolios, the EIF signed approximately €1bn worth of securitisation agreements last year, including support for funding and regulatory capital release in nine countries. This transaction benefits from the European Investment Bank (EIB) Group Risk Enhancement Mandate (EREM), signed between the EIB and the EIF in order to support the impaired financing of European businesses.

The EIF is part of the European Investment Bank group. Its mission is to support Europe’s micro, small and medium-sized businesses with to access finance. The EIF designs and develops both venture and growth capital, guarantees and microfinance instruments that target this market segment.

Commerzbank is a leading commercial bank with approximately 1,050 branches in more than 50 countries. Its core markets are found in Germany and Poland with finances of over 30% of Germany’s foreign trade – making it Germany’s market leader in SME financing. Commerzbank customers number more than 16,000,000 in the private sector, and 1,000,000 business and corporate clients. Founded in 1870, Commerzbank is represented at major stock exchanges around the world, generating gross revenues of €9.8bn in 2015.