- This synthetic securitisation transaction with ING is part of the EIB Group Covid-19 response, announced in March, meant to help companies manage current the crisis.
- Part of the transaction is supported by the European Fund for Strategic Investments, the main pillar of the European Commission’s Investment Plan for Europe.
The EIB Group, consisting of EIB and EIF, has issued a guarantee to senior and mezzanine tranches backed by loans originated by ING to support new lending to Dutch SMEs and Mid-Caps, helping to mitigate the impact of Covid-19. Through a €795 million securitisation structure – the largest synthetic securitisation ever transacted by EIB Group – between EIF and EIB, with support from the Investment Plan for Europe, ING committed to make available new lending to SMEs and Mid-Caps during these difficult economic conditions for an amount in excess of €1.1 billion. Under agreements between ING and the EIB Group, favourable lending conditions will apply on €702 million of this total amount.
Paolo Gentiloni, European Commissioner for the Economy, said: “SMEs have been especially affected by the crisis and have traditionally a harder time to access bank financing. Thanks to the EIB Group guarantee backed by the Investment Plan for Europe, ING will unlock significant additional lending for Dutch SMEs. This is a further clear sign of our commitment to help businesses of all sizes to get through this difficult period.”
Ruud van Dusschoten, Chief Executive Officer of ING in The Netherlands commented: “We are delighted to announce today this groundbreaking and sizeable transaction with EIB and EIF as supported by the EU. In the next phase of the Covid-19 crisis, it is even more important to stimulate Dutch companies with a sound market and financial position to resume their investment programs again and seek new growth opportunities. This transaction will enable us to grant new loans and leases for a substantial amount to our SME and Mid-Cap customers at a favorable interest rate in support of those new investments and growth opportunities.”
“ING has been a close partner of the EIB Group since 2009.” said EIB Vice-President Christian Thomsen. “Now that the stakes are higher than ever for the EU economy, we are glad to be able to partner with them again and to transform guarantees into new lending for businesses hit by the Covid outbreak. SMEs remain the backbone of our economies and they need all the support they can get.”
EIF Chief Executive Alain Godard added: “This shows that Europe is there when push comes to shove. The EIF and EIB have made great efforts to swiftly mobilise resources and enable intermediaries such as ING to make available new lending during the Covid-19 pandemic. We are glad to be able to count on ING to jointly support Dutch SMEs and Mid-Caps so they can weather the current storm.”
ING will retain a first-loss-piece of the guaranteed portfolio, with EIF backing up the senior and mezzanine tranches. In turn, the EIB will counter-guarantee the EIF for the mezzanine tranche and part of the senior tranche. The EIB guarantee of the mezzanine tranche benefits from backing under the European Fund for Strategic Investments (EFSI), the main pillar of the European Commission’s Investment Plan for Europe.
Background Information:
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 goals. In 2019, the EIB made available nearly EUR 2.5 billion for Dutch projects in healthcare, SMEs and energy efficiency, among others
The European Investment Fund (EIF) is part of the European Investment Bank 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.
The European Fund for Strategic Investments (EFSI) is the main pillar of the Investment Plan for Europe. It provides first loss guarantees enabling the EIB Group to invest in riskier projects. The projects and agreements approved for financing under EFSI have so far mobilised €535.4 billion in investment, benefitting over 1.4 million SMEs.
ING is a global financial institution with a strong European base, offering banking services through its operating company ING Bank. The purpose of ING Bank is empowering people to stay a step ahead in life and in business. ING Bank’s more than 53,000 employees offer retail and wholesale banking services to customers in over 40 countries.
ING Group shares are listed on the exchanges of Amsterdam (INGA NA, INGA.AS), Brussels and on the New York Stock Exchange (ADRs: ING US, ING.N).
Sustainability forms an integral part of ING’s strategy evidenced by ING’s ranking as Leader in the banks industry group by Sustainalytics and ‘A’ rating in MSCI’s ratings universe. ING Group shares are included in major sustainability and Environmental, Social and Governance (ESG) index products of leading providers STOXX, Morningstar and FTSE Russell.
