EIF partners with abcfinance to support SME investment initiatives

• Leasing specialist abcfinance to expand financing for businesses across Germany
• New business financing using cash securitisation enabling abcbank to obtain funding from investors backed by EIF
• Support for SMEs in Germany, with a focus on gender-balanced businesses as well as cultural and creative sectors

The European Investment Fund (EIF) is joining forces with German leasing company abcfinance group to expand access to finance by cultural, creative and female-led businesses across Germany.

The securitisation transaction will enable abcfinance group to obtain refinancing backed by a portfolio of EUR 450m of lease assets originated by abcfinance group.

The structure involves abcbank, which will release regulatory capital on the portfolio, unlocking new lending capacity for business financing.

Under the agreement, the European Investment Fund will issue guarantees in total of EUR 280 million.

“This partnership with abcfinance marks an important step in strengthening access to leasing finance for German businesses, enabling them to invest, innovate, and grow. By unlocking fresh lending capacity, we’re delivering real impact for SMEs and the wider economy.” said Marjut Falkstedt, Chief Executive of the European Investment Fund.

Dr. Hubertus Mersmann, Spokesman of the management board of abcfinance: "This transaction is not only a milestone for the abcfinance Group. It is also an innovative pioneer for the refinancing of equipment leasing in the German SME sector."

General information

About abcfinance

Abcfinance is one of the leading bank- and manufacturer-independent leasing companies in Germany. abcfinance offers its SME customers efficient and innovative financing solutions - supplemented by real added value. In our business areas of leasing, factoring and sales financing, we have been there for our customers for 48 years. abcfinance has been based in Cologne since it was founded in 1976 and is part of the Werhahn group in Neuss. Together with abcbank, abcfinance forms the “abcfinance” group. At a total of 14 locations throughout Germany, our experts work as advisors and strategists for the success of our SME customers. abcfinance offers financing solutions for corporate customers in the Netherlands and Austria via two foreign subsidiaries.

Technical Note on the securitisation transaction

A securitisation transaction involves pooling together financial assets such as leases and converting them into tradable securities. These securities are offered to investors and are backed by the cash flows from the underlying assets. Investors receive payments as the borrowers repay their loans, while taking on the associated credit risk.

In this transaction, a portfolio of EUR 450m of lease assets is being securitised through the issuance of five classes of notes with a combined worth of EUR 450m. The EIF provides an embedded guarantee on the class A1 notes in an amount of EUR 200m. An embedded guarantee forms part of the transaction structure and covers any present or future investor in the Class A1 from time to time, effectively transforming the underlying ABS notes into a quasi-European Safe Asset rated as AAA. Therefore, this embedded guarantee will increase the appeal of the ABS notes to investors by enhancing their liquidity and transferability. 

In addition, the EIF provides bilateral guarantees to abcbank on the retained classes B, C and D notes in a combined amount of EUR 80m which allows abcbank to release regulatory capital and unlock new lending capacity.

The reference portfolio consists of more than 17,000 leases for vehicles, machines, and other facilities used in everyday business of German enterprises. The transaction is non-revolving and includes standard credit enhancement features such as subordination, excess spread, use of a cash reserve and a principal deficiency ledger.

Press contacts:

EIB Group

Richard Willis: r.willis@eib.org, Tel.: +352 621 555758

www.eib.org/press – Press Office: +352 4379 21000; press@eib.org