The general purpose of EIF's credit enhancement operations is to support new SME financing. EIF focuses mainly on deals backed by SME financing, although it does not exclude other asset classes. Examples of SME financing securitised with the help of EIF:
EIF guarantees senior and/or mezzanine tranches of risk, typically with a minimum rating equivalent to BB/Ba2.
The EIF guarantees are provided in different forms, such as wraps, bilateral guarantees, credit default swaps, etc.
The EIF guarantees facilitate the execution of securitisation transactions, allowing financial institutions to diversify their funding sources and/or to achieve economic and regulatory capital relief via credit risk transfer:
Asset-backed securities wrapped by EIF are assigned its AAA/Aaa/AAA rating.
Recently, EIF has been mandated by the European Commission to participate in securitisations using EU funds from the CIP - Competitiveness and Innovation Framework Programme 2007-2013.
Guarantees on ABS are provided in different forms, such as wraps or bilateral guarantees to the noteholders.