Germany: EIB Group and Deutsche Bank join forces to support small and medium-sized companies during the COVID-19 crisis

• EIB Group synthetic securitisation will enable Deutsche Bank to lend €300 million to small and medium-sized companies (SMEs) and mid-caps in Germany in response to COVID-19
• The transaction is the first unfunded synthetic STS securitisation in which the EIB Group has invested
• The operation is backed by an EFSI guarantee under the Investment Plan for Europe

The European Investment Bank (EIB) Group has provided a guarantee of €75 million to Deutsche Bank.  The guarantee will provide capital release for Deutsche Bank and enable Germany’s biggest commercial bank to provide new lending of €300 million to small and medium-sized companies and mid-caps. The transaction is expected to support smaller businesses in their recovery from liquidity shortages caused by the COVID-19 crisis.

This transaction was structured to comply with the STS requirements for synthetic securitisations. It is among the very first transactions to fall within the new rules for simple, transparent and standardised (STS) synthetic securitisations which were adopted by the European Parliament in April 2021. The STS criteria for synthetic securitisations are fostering a common label to be associated with high-quality transactions for capital relief purposes.

The transaction benefits from 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 are strategic partners to mobilise investments in the European economy. The EIB Group consists of the European Investment Bank (EIB) together with the European Investment Fund (EIF), which provides smaller companies with loans under favourable conditions.

The EIF will issue a €75 million guarantee to Deutsche Bank covering a mezzanine tranche of a €1 billion loan portfolio in a synthetic securitisation structure. A counter guarantee (back-to-back) from the EIB will fully mirror the EIF’s obligation, so that the EIB covers the credit risk related to the mezzanine tranche that will be disbursed through the Deutsche Bank for the benefit of German SMEs.  

“Due to COVID-19, many companies have for months experienced a slump in demand for their goods and services, and a lot of them are even struggling to stay in business,” said EIB Vice-President Ambroise Fayolle, who is responsible for operations in Germany and EFSI. “By providing a guarantee to Deutsche Bank for the ultimate benefit of SMEs and mid-caps, the EIB Group is complementing national schemes in response to COVID-19.”

EIF Chief Executive Alain Godard added: “The EIF is pleased to be working with Deutsche Bank and the EIB to provide additional access to finance for SMEs 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 Deutsche Bank that will serve to boost the supply of finance in the real economy.”

Paolo Gentiloni, European Commissioner for Economy, said: “The European Union is continuously working to support SMEs and mid-caps across Europe that play such a central role in our economy. Thanks to this guarantee provided by the Investment Plan for Europe and the EIB Group, Deutsche Bank will be able to provide new loans for businesses in Germany, helping them to invest, create jobs and drive forward the recovery from the COVID-19 crisis.” 

Hauke Burkhardt, Head of Corporate Lending, Deutsche Bank said: “Deutsche Bank is pleased to be partnering with the EIB and the EIF to support our important small and mid-sized clients in Germany. The pandemic delayed necessary investments and the digital and sustainable transformation requires massive capital expenditure. With this transaction we are able to offer our clients favourable terms to finance these future investments.”

Oliver Moschuering, Managing Director, Global Portfolio Manager, Strategic Corporate Lending, Deutsche Bank said: “We are delighted to complement our existing synthetic securitisation platform with our first €1 billion credit risk transfer transaction with the EIF/EIB.”

Oliver Gehbauer, Director, Credit Structuring, Deutsche Bank said: “Against an uncertain backdrop on the future treatment of synthetic excess spreads, we have delivered the first EIF synthetic securitisations under the new STS standard and one of the first in the market.”

Background information:

EIB

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.

EIF

The European Investment Fund (EIF) is part of the EIB 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 both venture and growth capital, guarantees and microfinance instruments which specifically target this market segment.

Deutsche Bank

Deutsche Bank is the leading commercial bank in Germany. Deutsche Bank provides retail and private banking, corporate and transaction banking, lending, asset and wealth management products and services as well as focused investment banking to private individuals, small and medium-sized companies, corporations, governments and institutional investors. Deutsche Bank is the leading bank in Germany with strong European roots and a global network.

Investment Plan for Europe

The Investment Plan for Europe is one of the European Union’s top priorities to boost investment and create jobs and growth by making smarter use of existing and new financial resources. The EIB Group is playing a vital role in this investment drive. Through guarantees from the European Fund for Strategic Investments, the EIB and the EIF are able to take on a higher share of project risk, encouraging private finance providers to participate in projects. In addition, EFSI is accompanied by a new advisory service, the European Investment Advisory Hub, which enables public and private project operators to structure their investment projects more professionally. The projects and agreements approved for financing under EFSI so far are expected to mobilise €546.5 billion in investments and support more than 1.4 million start-ups and SMEs across all EU Member States.

Press contacts:

Alexandra Umpleby-Walker, Deutsche Bank: alexandra.umpleby-walker@db.com

Frank Hartmann, Deutsche Bank: frank.hartmann@db.com

Donata Riedel, EIB and EIF, d.riedel @eib.org, tel.: +49 30 590047912 / Mobile: +49 151 14659021
Website: www.eib.org/press - Press Office: +352 4379 21000 – press@eib.org

Flora Matthaes, European Commission, flora.matthaes@ec.europa.eu, tel.: +32 460 755148