BAKU, Azerbaijan, February 17. The EIB Group, comprising the European Investment Bank (EIB) and the European Investment Fund (EIF), has signed its sixth synthetic securitization with BNP Paribas since 2017, aiming to support French small and medium-sized enterprises (SMEs), mid-caps, and green projects, Trend reports via the EIB.
Under the deal, the EIB Group will invest €112 million to reduce BNP Paribas’ risks on existing loans, enabling the bank to provide €337 million in new lending over two years. At least 30% of the new lending will be directed to projects aligned with climate action and environmental sustainability, supporting the transition to a low-carbon economy.
In the transaction, the EIF provides protection on a mezzanine tranche of €112 million, counter-guaranteed by the EIB. BNP Paribas retains the senior and junior tranches. As a synthetic securitization, the credit risk of the mezzanine tranche is transferred via an unfunded guarantee, while the underlying loan portfolio remains on BNP Paribas’ balance sheet. The transaction qualifies as STS (Simple, Transparent, Standardized).
The securitized portfolio, with a total outstanding balance of approximately €1.5 billion, includes mid-corporate loans originated by BCEF, covering BNP Paribas’ exposures to mid-cap and upper-SME corporate borrowers. The structure features pro-rata amortization with triggers based on portfolio credit performance, a synthetic excess spread, and a two-year replenishment period allowing eligible assets to be added subject to performance criteria.
The transaction is designed to deliver optimal risk-weighted asset (RWA) relief, freeing up lending capacity and enabling BNP Paribas to further finance the real economy.