White & Case advises EIF and EIB on first synthetic securitisation for Banca Transilvania

Global law firm White & Case LLP has advised the European Investment Fund (EIF) and the European Investment Bank (EIB) on a synthetic securitisation of a portfolio of loans originated by Banca Transilvania S.A. (BT) and granted to Romanian micro, small and medium-sized enterprises (SMEs) and corporates.

“To support new lending capacity to SMEs, EIF and EIB made securitisation investments of more than €3 billion during 2023, more than 55 percent of which were focused on Central & Eastern Europe,” said White & Case partner Dennis Heuer, who co-led the Firm’s deal team. “The BT deal is one of several transactions on which we have recently advised EIF and EIB.”

The landmark transaction is BT’s first securitisation transaction and marks the first capital relief transaction between BT and the EIB Group. The agreement is expected to support SMEs and small mid-caps in Romania, with an emphasis on projects aligned with climate action and environmental sustainability, supporting the transition to a low-carbon economy. The EIF guarantee on the mezzanine and senior tranches covers a reference portfolio of approximately €400 million.

Half of the BT’s exposure to the senior tranche and its entire exposure to the mezzanine tranche is in turn counter-guaranteed by the EIB and enables the redeployment of  BT’s capital to support the economy.

BT retains the junior tranche and full exposure to a set of selected loans with similar characteristics to the referenced exposures. The transaction features a use-it-or-lose-it synthetic excess spread mechanism, a two-year replenishment period and a pro-rata amortisation of the senior tranche and the mezzanine tranche, subject to performance triggers.

The White & Case team which advised on the transaction included partners Dennis Heuer (Frankfurt), Ingrid York (London) and Arnaud Cagi-Nicolau (Luxembourg), local partner Claire-Marie Mallad (Frankfurt) and associates Reetu Vishwakarma (Frankfurt), and Konstantinos Strakas (Luxembourg).

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