New SME Initiative synthetic securitisation originated by Banca Popolare di Puglia e Basilicata
Banca Akros acted as Financial Advisor
The following is a brief description of the Synthetic Securitisation transaction that was successfully concluded in December 2019.
- Banca Popolare di Puglia e Basilicata S.c.p.A (BPPB) and the European Investment Fund (EIF) signed a risk transfer agreement for lending to SMEs and Small Mid Caps in Southern Italy under the SME Initiative Italy programme.
- Banca Akros acted as Financial Advisor to BPPB in the Transaction.
- The agreement, part of the “SME Initiative Italy”, was realised in the technical form of a synthetic securitisation of a portfolio of SME loans already provided by the bank. At the same time, BPPB undertook to provide new loans to SMEs and small businesses in Southern Italy for around €120 million over 36 months, at a subsidised rate, using €11 million of funds to cover the first and second losses of the securitised portfolio, made available by the Managing Authority (MISE) with European ESIF funds.
- The transaction is the first SME Initiative that achieves the objective of freeing up credit guarantee consortia. By signing the securitisation, BPPB was able to free up local credit guarantee consortia allowing them to re-invest the freed capital in new guarantee operations in favour of the banking system and continue to support the growth of the country, particularly in the South.
- SME Initiative is an innovative risk transfer financial instrument envisaged in the new regulations on European Structural and Investment Funds (ESIF) that allows funds managed at national (or regional) level to be combined with resources from the European COSME programme (Programme for the Competitiveness of Enterprises and Small and Medium-sized Enterprises) and resources from the EIB Group.
- The transaction is the third concluded by BPPB in 2019 with the European Investment Fund with the support of Banca Akros’ Securitisation & Structured Solutions structure.
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