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The EIB Group — made up of the European Investment Bank (EIB) and the European Investment Fund (EIF) — and Instituto de Crédito Oficial (ICO) have invested in senior and mezzanine tranches of new asset-backed securities (ABS) originated by Sabadell Consumer Finance to support working capital and liquidity needs and address the investment constraints of Spanish small and medium-sized enterprises (SMEs) and mid-caps. Part of the financing generated will be channelled into green projects.
A large proportion of the final beneficiaries of this agreement for SMEs will be based in less developed regions — where per capita GDP (gross domestic product) is less than 75% of the EU average and where it is particularly difficult to access financing.
As part of the transaction, the EIB is purchasing different securitisation tranches amounting to €350 million while €30 million is invested by the EIF. ICO’s participation in this ABS transaction translates into a total investment of €95 million. This deal will enable the Banco Sabadell Group to channel €936 million into the real economy.
The EIB Group’s total investment (€380 million) takes place via a single securitisation, with a structure designed to achieve optimal efficiency.
Overall, the transaction aims to facilitate access to financing for SMEs and mid-caps while also promoting and accelerating private sector investments. The transaction will address working capital and liquidity needs and will tackle investment constraints faced by these enterprises in the aftermath of the coronavirus pandemic, the war in Ukraine, persistent inflationary pressures and increases in interest rates, among other issues.
This ABS securitisation transaction has a green component stemming from the EIF’s €30 million investment. Banco Sabadell will originate a new portfolio of SME loans totalling €60 million, of which about one-third will be financing granted for green projects.
“The EIB Group regularly joins forces with ICO and Banco Sabadell to give SMEs and mid-caps easier access to finance, thereby increasing their competitiveness and resilience. Together we are taking a new step to develop attractive credit solutions that help sustain business operations and support investment,” said EIB Vice-President Ricardo Mourinho Félix. “The transaction brings significant added value as it will promote equitable growth and convergence between EU regions, which is one of the key aims of the EIB’s lending activities.”
“We are pleased to collaborate with the EIB Group and Banco Sabadell to develop public-private partnership schemes aimed at channelling financing to Spanish companies. This operation is in line with the 2022-2027 strategy of the ICO Group, whose action plans support the growth of Spanish SMEs and social and territorial cohesion,” said ICO Director for Finance and Strategy Antonio Cordero.
“SMEs and small mid-caps are a key driver for economic development and employment. At the EIF, we are proud to be doing our part in unlocking new financing solutions and boosting economic, socially inclusive and green growth in Spain. The EIF’s investment reflects our commitment to supporting a green and sustainable transformation of the Spanish economy,” said EIF Chief Executive Marjut Falkstedt.
Deputy General Manager and Head of Corporate Banking Banco Sabadell Eduardo Currás De Don Pablos added: “The EIB Group (EIB and EIF) and the Instituto del Crédito Oficial (ICO) have historically been key partners in supporting business development in Spain. For Banco Sabadell it has always been very important to be able to collaborate with these organisations, with the aim of offering the best financing conditions for our customers' business projects. This credit line is particularly important and timely, given the magnitude of the business and the moment of recovery and future investments that our clients are managing.”
