Butch bank ABN AMRO has entered into a risk sharing agreement with the EIB Group – consisting of the European Investment Fund (EIF) and the European Investment Bank (EIB) – on a portfolio of over €1 billion in existing loans to Dutch businesses originated by ABN AMRO.

“Under this synthetic securitisation transaction, a guarantee structure from the EIB Group reduces ABN AMRO’s credit risk exposure, freeing up capital for new lending to small and medium-sized enterprises (SMEs) and Mid-Caps,” said the EIB.

“The Dutch lender will thus be able provide over €1.2 billion in new financing at favourable rates to companies in the Netherlands.

“Part of the newly available financing is earmarked for environmental sustainability projects, supporting the transition to climate neutrality and a sustainable society.

“With this ground-breaking transaction, the EIB Group and ABN AMRO build on their longstanding partnership to help Dutch business secure financing at competitive interest rates.”

ABN AMRO Chief Commercial Officer Corporate Banking Dan Dorner: “We have a strategic goal to support SME’s and Mid-Caps. We are therefore delighted once again to be in a position to offer EIB financing to our clients.

“ABN AMRO and the EIB have partnered several years to provide financing to Dutch companies. The EIB offers favourable conditions for our clients. This transaction will support the economic growth of our clients and their transition to climate neutrality and boost the SME loans in the Dutch market.”

EIB Group vice-president Robert de Groot added: “We are proud to close this landmark deal, which is the largest securitisation transaction in EIB Group history. It is also our first collaboration of this kind with ABN AMRO, leveraging on the strong relationship between both banks. This partnership will significantly enhance the availability of financing for SMEs and Mid-Caps in the Netherlands, driving economic growth and job creation.”

Both EIB and EIF are involved in the transaction. The EIF is providing protection on the mezzanine tranche of €150 million and on the senior tranche of €835 million. The EIF’s mezzanine tranche exposure as well as part of the EIF’s senior tranche exposure is in turn counter-guaranteed by the EIB.

The junior tranche is fully retained by ABN AMRO. Key features of the transaction include synthetic excess spread, a three-year revolving period and pro-rata amortisation of the senior and the mezzanine tranches, subject to performance triggers.