Bank debt products and strategy

Strategic priorities

• Support institution building
• Promote bank lending to private enterprises
• Assist and promote inter and intra regional trade
• Support lending for small and medium companies (SMEs)
• Provide a broad range of debt and guarantee products

Key products

The EBRD responds to changing market conditions and client needs by revising existing debt products and offering new and innovative ones. The Bank can specifically tailor transactions to meet client needs.

• Senior loans: multi-currency, straight or with convertibility option, floating and fixed interest rates, caps and collar.
  
  
• Mortgage facilities: long term funds for on-lending, foreign or local currency on a select basis, standard pricing or with step-up, secured on a pool of mortgages or unsecured, standardised features for potential securitisation. The EBRD provide guidelines for good mortgage lending practice and structure:
  
  List of minimum standards for mortgage loans  (0.4Mb)
  Mortgage loan minimum standards manual  (4.3Mb)
  
  
• Subordinated debt: can be eligible for inclusion in tier two capital.
  
  
• SME Finance: credit lines through local banks for financing SMEs. Technical assistance for training bank staff often available. The TAM and BAS Programmes offer complementary schemes.
  
  
• Trade Facilitation Programme: goal is to foster international and intra-regional trade and to assist participating banks in building track records with their correspondent banks.
  More about the Trade Facilitation Programme.
  
  
• EU/EBRD SME facilities: targeted at EU new member states and accession countries. Provides credit lines through local banks and leasing companies, for sub-loans up to €125,000, supported by EU grants for incentives including technical assistance. Includes a Rural Finance component for use in defined “rural” areas in Bulgaria, Croatia and Romania. More about the EU/EBRD SME facilities.
  
  
• EU/EBRD Municipal finance: credit lines and/or risk sharing facilities with local banks to fund investments by small municipalities in EU new member states and accession countries. Priority given to infrastructure projects, 10-15 years maturity. EU grants provide technical assistance and financial incentives to participating banks and municipalities. More about EU/EBRD Municipal finance.
  
  
• Global Environmental Credit Facility: credit lines through local banks to fund environmental investments combined with GEF grants and technical assistance.
  
  
• Securitisation: support the structuring of securitisation transactions for CEE banks and non-bank FI such as leasing companies, consumer, mortgage financing companies. Two products: (1) Credit enhancement instruments including guarantees, equity, sub-debt to facilitate structuring. (2) Underwriting of commercial paper/bonds issues in the context of securitisation transactions.
  
  
• Risk sharing: main advantage for participating banks is to reduce risk weighted assets for capital adequacy purposes and reduce country and sector exposure. Two products: (1) EBRD and CEE banks share risk of a defined loan portfolio with certain characteristics: SME senior/mezzanine loans, mortgage loans, grain receipt loans, general corporate loans. (2) Risk sharing for pool of loans to CEE companies but booked by strategic investor outside CEE.
  
  
• Energy Efficiency & Renewable Energy Facilities: provides credit lines to private sector through local banks for applicable projects. Technical assistance for the development of Rational Energy Utilisation Plans and training of bank staff.