Bigbank AS, based in Estonia, has entered into a landmark synthetic securitisation agreement with the European Investment Bank Group, which includes the European Investment Bank and the European Investment Fund. The partnership aims to expand access to financing for small and medium-sized enterprises and mid-sized companies across the Baltic region, including Estonia, Latvia and Lithuania. The initiative will particularly focus on supporting micro-enterprises, young businesses and projects that contribute to environmental sustainability.
Through the agreement, the European Investment Fund is providing a financial guarantee covering a reference portfolio of more than €210 million composed of loans, credit lines and leases. The guarantee provides credit risk protection on senior and mezzanine portions of the portfolio, while the European Investment Bank provides a counter-guarantee for part of the exposure. Bigbank retains the smallest, or junior, portion of the portfolio.
The structure of the transaction reduces Bigbank’s regulatory capital requirements, allowing the bank to redirect the capital that is freed up toward new lending activities. As a result, Bigbank plans to generate approximately €253.6 million in additional financing for small and medium-sized enterprises and mid-sized businesses across the Baltic countries over the next three years.
Bank officials described the transaction as a significant milestone for the institution, as it is Bigbank’s first synthetic securitisation deal. The agreement is expected to help businesses in Estonia, Latvia and Lithuania gain access to more affordable financing, enabling them to invest, expand and strengthen their operations.
Leaders from the European Investment Bank Group emphasized that innovative financial instruments like securitisation can help strengthen Europe’s economy by directing more funding toward smaller businesses that often face difficulties obtaining capital. By sharing financial risk with Bigbank, the partnership aims to stimulate entrepreneurship, encourage innovation and promote sustainable economic development in the Baltic region.
Founded more than 30 years ago, Bigbank operates in nine countries and serves more than 190,000 customers. The European Investment Bank Group, which is owned by the European Union’s member states, is one of the world’s largest multilateral development banks and plays a key role in supporting economic growth, innovation and investment across Europe.
