Investment Plan for Europe: EIB and Be-Spoke Capital provide long term financing opportunities for SMEs and mid-caps in Spain
28 November 2019
- Spanish SMEs will benefit from favourable EIB funding conditions
- EIB acts as anchor investor in a securitisation transaction to broaden the financing opportunities available to Spanish SMEs
- The agreement is supported by the Investment Plan for Europe, or Juncker Plan
The European Investment Bank (EIB) has invested up to EUR 61m of Alhambra SME Funding 2019-1 DAC (Alhambra 2019-1), the first-ever securitisation of loans originated by Be-Spoke Capital, a new direct lending platform. This newly established platform will support Spanish SMEs and mid-caps with long-term financing opportunities that complement the offer of traditional lenders. The agreement is supported by the European Fund for Strategic Investments (EFSI), the main pillar of the Investment Plan for Europe, also known as the Juncker Plan.
The deal signed today by EIB Vice-President Emma Navarro and Be-Spoke Capital CEO Lars Schmidt-Ott will bring the benefits of favourable EIB funding conditions to eligible borrowers in the underlying portfolio. The successful closing of the securitisation transaction will replenish Be-Spoke Capital’s origination capacity and increase lending to Spanish companies.
"SMEs and mid-caps are the backbone of the European economy and boosting their access to finance is key to fostering innovation and job creation, two of the main priorities of the EU bank", said EIB Vice-President Emma Navarro, responsible for EIB operations in Spain. "We are pleased to support a first-of-a-kind platform providing financing to small and medium-sized businesses in Spain, which complements the offer of traditional bank-intermediated channels. Thanks to our partnership with Be-spoke Capital, more Spanish SMEs and mid-caps will benefit from the advantages of our financing."
European Commission Vice-President Valdis Dombrovskis, responsible for the Euro and Social Dialogue, also in charge of Financial Stability, Financial Services and Capital Markets Union, said: "Over the past five years, one of the Commission’s top priorities has been to boost funding opportunities for small businesses in Europe. Thanks to the Juncker Plan, more than one million start-ups and SMEs are set to benefit. I welcome this new agreement between the EIB and Be-Spoke Capital for its innovative approach to lending and I encourage Spanish companies to take full advantage of this new financing resource."
"We are grateful to have found such a reliable partner in the EIB, which enables us to lower our borrowers' funding costs. Indeed, it was a pleasure to work alongside the EIB professionals in this transaction." said Be-Spoke Capital CEO Lars Schmidt-Ott.
By investing in securitisation transactions, the EIB is also contributing to the development of a Capital Markets Union, one of the key EU objectives. In this context, supporting different funding options for SMEs and mid-caps is key. Such diversity is expected to lead to more resilient debt-markets, less prone to shock disruptions in liquidity flows to the real economy.
The EIB has reinforced its position as mezzanine investor and Alhambra 2019-1 will benefit from the favourable conditions of EIB financing in terms of both long maturity periods and interest rates thanks to the Juncker Plan, which enables the EIB to offer increased support for investments fostering innovation, economic growth and jobs.
NatWest Markets and J.P. Morgan Securities plc managed the transaction placement and the involvement of the EIB and other institutional investors, and NatWest Markets was the sole arranger of the securitisation.
The European Investment Bank (EIB) is the long-term lending institution of the European Union owned by its Member States. It makes long-term finance available for sound investment to contribute towards EU policy goals. Spanish SMEs and mid-caps are the firms that benefited most in the EU from EIB support last year. In 2018 alone, the Bank provided more than EUR 4.8bn to Spanish SMEs and mid-caps, accounting for 57% of EIB Group activity in the country. These funds will support the investment projects of more than 82 600 Spanish companies employing roughly 766 000 people.
The Investment Plan for Europe, known as the Juncker Plan, is one of the European Commission’s top priorities. It focuses on boosting investment to generate jobs and growth by making smarter use of financial resources, removing obstacles to investment, and providing visibility and technical assistance to investment projects.
The European Fund for Strategic Investments (EFSI) is the main pillar of the Juncker Plan and provides first-loss guarantees, enabling the EIB to invest in more projects that often come with greater risks. The projects and agreements approved for financing under EFSI are expected to mobilise more than EUR 450.6bn in investment, including EUR 49.5bn in Spain, and support more than one million start-ups and SMEs in the 28 Member States. Juncker Plan-backed investments have increased EU gross domestic product by 0.9% and added 1.1 million jobs compared to the baseline scenario. By 2022, the Juncker Plan will have increased EU GDP by 1.8% and added 1.7 million jobs.
More information on the results of the Investment Plan for Europe is available here.
Be-Spoke Capital is a non-bank lender located in London and Madrid. It specialises in lending to Spanish SMEs and mid-caps, addressing a perceived shortage of medium-term funding due to reduced bank lending. Be-Spoke Capital originates and funds loans to Spanish SMEs and mid-caps, focusing on regional leaders with proven track records, sustainable business models and resilient cash flows.
The in-house credit analysis is based on quantitative top down selection of Spanish SMEs and mid-caps and supporting qualitative analysis. Be-Spoke Capital aims to be a repeat lender and a long-term partner for borrowers with growth potential, offering flexible use of funds to complement existing bank funding options. Be-Spoke Capital’s has extensive experience in direct lending, credit, private equity, corporate finance, and restructuring, which enables Be-Spoke Capital to deliver collaborative, value-added solutions to borrowers to address their funding needs.
Alhambra 2019-1 is a public cash flow securitisation collateralised by a €275mm portfolio of 52 senior loans to Spanish small and medium sized enterprises and mid-cap corporates. All the loans in the portfolio have an assigned credit estimate by DBRS and a probability of default by Axesor, both of whom also rated the ABSs.