The two agreements will be implemented via EIB Group participation in BSCP first capital relief securitisation of auto loans, part of which will be dedicated to financing the purchase of less polluting vehicles by SMEs. This is one of the first STS (simple, transparent, standardised) securitisation to have been placed on the Portuguese market since the new EU regulation entered into force last year.
In concrete terms, the EIB will purchase several tranches of the securitization for an amount of €489.4 million from BSCP. In addition, the European Investment Fund (EIF), the EIB Group subsidiary specialising in SMEs financing, will grant a €97.6 million guarantee to BSCP on the retained part of several tranches. Part of this EU bank financing is provided under the Investment Plan for Europe, the support of which enables the EIB Group to expand its lending capacity for investment projects that have a higher risk profile owing to their structure or nature.
With the impact of COVID-19 in Portugal, enabling access to finance for small and medium-sized companies is key to preserve the industries and jobs in the country, where SMEs account for about 77 percent of total employment. The two agreements signed by the EIB Group and BSCP will make possible to support companies across many sectors of the Portuguese economy.
Both operations are part of the EIB Group's initiatives launched in March as a rapid response to the crisis caused by the coronavirus pandemic. The EIB Group has also taken extraordinary measures to speed up its processes and make its internal policies more flexible in order to, among other things, deploy its support as quickly as possible and finance expenses that it would not normally cover, such as the operating costs of European businesses. As a matter of fact, Portuguese companies benefiting from this EIB Group fund will be able to finance not only investments but also working capital expenditures.