EIF supports first placement of SME securitisation post-crisis

The European Investment Fund (EIF) has signed a guarantee agreement over EUR 60 million to support a true-sale securitisation with loans to small- and medium sized enterprises (SME) in the UK. This is the first SME transaction which has been placed with investors since the financial crisis started.

Lloyds TSB has securitised a portfolio of UK SME loans through Sandown Gold plc, a special purpose vehicle set up for this transaction. The static portfolio comprises GBP 807 million of loans with 1,407 borrowers and loan sizes range from GBP 25,000 to GBP 5.5 million. The purpose of the transaction was to provide additional funding for Lloyds TSB.

EIF has guaranteed the EUR 60m Class A2 tranche which provides credit enhancement to the senior notes. Part of the EIF mandate is to restart the securitisation market for SMEs  loans across Europe in order to allow banks mobilising additional funding and/or capital  resources. SME securitisation is seen by the EIF as an important tool to ensure availability of financing to European SMEs which have otherwise no direct access to the capital markets. 

About EIF

The EIF central mission is to support Europe's SMEs by helping them to access finance.  EIF designs and develops venture capital and guarantees instruments which specifically target this market segment. In this role, the EIF fosters EU objectives in support of innovation, research and development, entrepreneurship, growth, and employment.  

For further information, please contact David Yormesor, d.yormesor@eif.org, or visit EIF's website www.eif.org