Investment of EUR 10 million in credit linked notes, issued by Aurora SME I Designated Activity Company (the "Issuer"), covering the credit risk of the mezzanine tranche in a synthetic balance sheet securitisation of a performing SME and corporate loans portfolio, originated by Alpha Bank S.A., a commercial bank incorporated in Greece (the "Originator" or "Alpha").
The project boosts the resilience of a systemic bank in Greece, by allowing Alpha Bank to achieve a risk-weighted assets' relief and optimise its regulatory capital requirements. Furthermore, the EBRD promotes resource efficiency in the country by requiring Alpha Bank to allocate funds in the amount of 1.5 times of EBRD's subscription to finance green investments in renewable energy and energy efficiency.
ETI score: 60
The project delivers transition impact through the Resilient quality, as it contributes to the optimisation of the bank's capital structure by achieving weighted assets' relief and freeing up lending capacity, and support the establishment of an innovative instrument in the Greek market, the use of which remains limited to date. The project also supports the Green transition quality and the EBRD's Green Economy Transition ("GET") approach in Greece through Alpha Bank allocating a multiple of the EBRD investment towards projects, which meet strict GET-eligibility criteria.
AURORA SME I DESIGNATED ACTIVITY COMPANY
The Issuer: Aurora SME I Designated Activity Company is a securitisation special purpose entity established in Ireland for the purposes of the synthetic balance sheet securitisation originated by Alpha.
The Originator: Alpha Bank is one of four systemic banks in Greece with a market share by assets of c. 24% as of end-June 2021. Since April 2021, it is fully owned by Alpha Services and Holdings ("ASH"), which is listed on the Athens Stock Exchange.
EBRD Finance Summary
Investment of EUR 10 million in credit linked notes
Total Project Cost
The project is additional in terms of innovative financing structure and risk mitigation, as the Bank supports Alpha's first synthetic securitisation issuance in a market, where the instrument is novel, while EBRD's participation as a stable investor facilitates further mobilisation of institutional investors. The project also involves standard-setting in the request to allocate EBRD participation proceeds to GET-eligible projects meeting certain demanding standards and certification requirements. This helps Alpha Bank to promote green projects and enhance awareness and deployment of funds in this area and sets a market example for sustainable finance.
Environmental and Social Summary
Categorised FI (2019 ESP). Alpha Bank is an existing client and well known to the EBRD through previous exposures. Under the existing exposures, Alpha Bank is in compliance with the EBRD's Performance Requirements 2, 4 and 9. Alpha Bank will continue to comply with these PRs, implement EBRD's applicable E&S Risk Management Procedures including the specific eligibility criteria for wind, solar, hydro, geothermal or biomass projects, as relevant; and continue to submit annual environmental and social reports to the EBRD.
Technical Cooperation and Grant Financing
Company Contact Information
40 Stadiou Str., Athens, 102-52, Greece
PSD last updated
17 Dec 2021
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Independent Project Accountability Mechanism (IPAM)
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