Credit enhancement

The general purpose of EIF's credit enhancement operations is to support new SME financing. EIF focuses mainly on deals backed by SME financing, although it does not exclude other asset classes. Examples of SME financing securitised with the help of EIF:

• SME loans
• SME loan guarantees
• Small ticket lease receivables
• SME trade receivables
• Venture financing (lease/loans)
• Micro-loans

EIF guarantees senior and/or mezzanine tranches of risk, typically with a minimum rating equivalent to BB/Ba2.

The EIF guarantees are provided in different forms, such as wraps, bilateral guarantees, credit default swaps, etc.

The EIF guarantees facilitate the execution of securitisation transactions, allowing financial institutions to diversify their funding sources and/or to achieve economic and regulatory capital relief via credit risk transfer:

• Asset-backed securities wrapped by EIF are assigned its AAA/Aaa/AAA rating.
• EIF can sell protection on the underlying portfolio itself, e.g. directly to the benefit of the originator in synthetic deals.
• Credit risk transfer and capital relief - through the placement of notes with cash investors or otherwise - are further facilitated by the zero risk-weighting assigned to assets guaranteed by EIF (Basel II), thanks to its Multilateral Development Bank status. 
• The EIF guarantees are offered at competitive prices, after a detailed analysis of the transaction and of the originator

Asset-backed securities wrapped by EIF are assigned its AAA/Aaa/AAA rating.

EIF may conduct its activities in the territory of the European Union Member States and Candidate Countries to the European Union and in the European Free Trade Association (EFTA) countries.

Recently, EIF has been mandated by the European Commission to participate in securitisations using EU funds from the CIP - Competitiveness and Innovation Framework Programme 2007-2013.

• True Sale Transactions

  Guarantees on ABS are provided in different forms, such as wraps or bilateral guarantees to the noteholders.

  

  Examples of true sale securitisations from EIF's track record:
  
  

• Name	Asset class	Country
  Sandown Gold plc	SME loans	UK
  Geldilux-TS-2010 S.A.	SME loans	Germany
  Sekerbank Covered Bond Programme	SME loans	Turkey
  BEST SME 2008 B.V.	SME loans	The Netherlands
  Zephyros Finance S.r.l.	Small ticket lease receivables	Italy
  Geldilux-TS-2005 S.A.	SME loans	Germany
  ProCredit Bulgaria	Micro loans	Bulgaria
  ROOF Poland Sp z o.o.	Small ticket lease receivables	Poland

  
  

  Synthetic Transaction

  In synthetic transactions, EIF can either guarantee Credit Linked Notes to investors or sell protection on the reference portfolio directly to the originator.Examples of synthetic transactions from EIF's track record:

  Name	Asset class	Country
  GATE SME CLO 2005-1	SME loans	Germany
  BEL SME 2006	SME loans	Belgium
  BEST SME 2007 B.V.	SME loans	The Netherlands
  CoSMO Finance 2007-1 and 2008-1	SME loans and guarantees	Germany
  Goodwood Gold SME CLO	SME loans	United Kingdom
  Gracechurch Corporate Loans Series 2007-1	SME loans	United Kingdom
  ROOF CEE 2006-1	Small ticket lease receivables	Czech Republic and Poland