Sat. Aug 13th, 2022

Brussels, 13 July 2022

EIB Group and RLB Steiermark join forces to provide additional lending to small and medium enterprises and mid-caps

  • EIB Group synthetic securitisation will enable RLB Steiermark to lend up to €240 million to small and mid-sized businesses mainly in Austria.
  • The operation is backed by a European Fund for Strategic Investments (EFSI) guarantee under the Investment Plan for Europe
  • The operation will also benefit private individuals undertaking energy efficiency projects in housing construction and renovation

The EIB Group, consisting of the European Investment Bank (EIB) and the European Investment Fund (EIF) has provided RLB Steiermark with a guarantee for a €60 million mezzanine tranche of a synthetic securitisation transaction. The transaction is expected to provide capital relief, as provided for by the EU Capital Requirements Regulation. The operation is backed by the Investment Plan for Europe.

The capital relief will enhance RLB Steiermark’s risk-taking capacity and create additional lending headroom. As a result, RLB Steiermark will create a new portfolio of eligible loans to small and medium-sized enterprises (SMEs), mid-caps and private individuals. The portfolio is set to be equal to four times the EIB’s guarantee amount.

Thanks to this operation, the new portfolio will increase SME investments with a focus on innovation and climate action mainly in Austria.

The transaction was made possible by the support of the European Fund for Strategic Investments (EFSI). EFSI is the central pillar of the Investment Plan for Europe in which the EIB Group and the European Commission act as strategic partners to strengthen the European economy and its competitiveness.

The operation is a synthetic securitisation whereby the EIF will issue a guarantee covering a mezzanine tranche for a total of €60 million. The guarantee will be fronted by the EIF and counter-guaranteed by the EIB for the entire amount. The underlying portfolio is a granular portfolio of loans to SMEs and mid-caps originated by RLB Steiermark.

Executive Vice-President for an Economy that Works for People, Valdis Dombrovskis, said:

I welcome the support given by the EIB Group to RLB Steiermark under the Investment Plan for Europe. This will make a new portfolio of loans available to small and medium-sized businesses in Austria and other countries. Supporting entrepreneurs and small businesses in accessing new financing is crucial, especially in the current difficult economic context of the pandemic and Russia’s unjustified invasion of Ukraine.

EIB Vice-President Thomas Östros said:

The transaction clearly leverages EIB Group synergies, and it strengthens RLB Steiermark`s capacity to increase the size of its SME and mid-cap portfolio. This is of particular importance as these categories of company are struggling to have access to liquidity. Our new cooperation with RLB Steiermark will provide much needed support to these companies in Austria. Thanks to this operation, with the support of the Investment Plan for Europe, SMEs and mid-caps will have continued access to funding lines at favourable interest rates.

EIF Chief Executive Alain Godard said:

The EIF is pleased to be working with RLB Steiermark and the EIB to provide additional access to finance for small and medium businesses and mid-caps. The combination of the EIF’s investment and structuring expertise and the EIB’s efficient deployment of EFSI funds offers a competitive financing solution for RLB Steiermark which will serve to boost the supply of finance in the real economy.

Director-General of RLB Steiermark,Martin Schaller, said:

We are looking forward to this future-oriented cooperation between the EIB, the EIF and RLB Styria. It is not just SMEs and mid-cap companies that will benefit — the entire Styrian economy stands to gain. We are sure that RLB, as the top institute of the leading Styrian banking group, will be able to effectively support the project. After all, especially in economically challenging times, creating new, joint financing solutions for small and medium-sized enterprises is a sustainable way of implementing major investment projects and thus remaining competitive.

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.

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 by helping them to access finance. The EIF designs and develops venture and growth capital, guarantees and microfinance instruments that specifically target this market segment.

The European Fund for Strategic Investments (EFSI) is the main pillar of the Investment Plan for Europe. It provides first-loss guarantees so that the EIB Group can invest in projects with a higher level of risk. To date, the projects and agreements approved for financing under EFSI have attracted investments totalling €524.3 billion, benefiting more than 1.4 million small and medium-sized businesses.

RLB Steiermark is the central institution of the leading Styrian banking group. The universal bank offers its 71 000 private and 10 000 corporate customers financial services, digital solutions and in-depth know-how in various specialist areas and fields. As an individual institution, RLB Steiermark achieved a balance sheet total of €20.2 billion in 2021.

Source – EU Commission