The European Investment Fund (EIF) has signed a guarantee agreement of over €60m to support a true-sale securitisation with loans to small- and medium sized enterprises (SME) in the UK.
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 £807m of loans with 1,407 borrowers and loan sizes range from £25,000 to £5.5m.
The purpose of the transaction, which is part of the EIF mandate to restart the securitisation market for SMEs loans across Europe in order to allow banks tom moilize additional capital resources, was to provide funding for Lloyds TSB.
EIF has guaranteed the €60m Class A2 tranche which provides credit enhancement to the senior notes.