CDP launches its first 100 million Euro Basket Bonds for companies in the Emilia-Romagna region

Summary

The operation is made possible thanks to a memorandum of understanding signed between the Regional Council and Cassa Depositi e Prestiti to accelerate green investments in the region. The mini-bonds will also benefit from a 25 million euro guarantee fund made available by the Region.

Among the planned investment spending is the use of renewable energy for production facilities, the streamlining of circular economy processes and the promotion of ecological transition.

Facilitate access to credit for smaller enterprises, promote the use of renewable energy and increase seismic upgrading and refurbishment works. These are the investments’ objectives that companies operating in the Emilia-Romagna region will be able to make through the first regional Basket Bonds. The programme will benefit from the 25 million euro guarantee made available by the Region which, thanks to its leveraged investing effect, typical of these alternative finance instruments, will allow the creation of mini-bonds portfolio of up to 100 million euro, equivalent to four times the resources of the guarantee fund.

Particularly, the investment is the result of a memorandum of understanding signed between the Regional Council and Cassa Depositi e Prestiti that has initiated a specific collaboration to promote the issue of bonds by small and medium-sized companies in the Emilia-Romagna region. Additionally, BPER, formerly known as Banca Popolare dell'Emilia Romagna S.C. will act as a credit provider to help companies structure their mini-bonds as the Arranger of the transaction. CDP and BPER will also be investors in the Programme and commits to subscribe 50% of the total bonds issued.

By providing an alternative credit access channel to the traditional banking channel, the Region's Programme aims to support business investments in line with the objective and resources of the European Regional Development Fund 2021-2027 (ERDF) on sustainability, decarbonisation and biodiversity issues.

“A concrete help to Emilia-Romagna companies for investments in sustainability, decarbonisation, biodiversity and resilience," said Vincenzo Colla, Regional Councillor for Economic Development and the Green economy and Paolo Calvano, Regional Councillor for the Budget -. “These parallel financing instruments to the banking system are aimed precisely at allowing access to the capital market to medium-sized companies or those small and medium capitalisation companies that would otherwise not individually have the power to attract investments from qualified and institutional investors”.

Massimo Di Carlo, Deputy General Manager and Business Director of CDP, stated: "With the new programme presented today, CDP continues to strengthen its path to achieve synergies with local companies, financial institutions and the banking system. The use of Basket Bonds and the regional guarantee represents an enormous development opportunity for companies because, thanks to the importance of their leveraged investing effect, for every euro of public resources used, four euros of financing is mobilised for the region's SMEs. In addition, CDP confirms its position as market leader having participated in all major Basket Bonds operations in Italy, from the programme dedicated to ESG objectives for the promotion of technological innovation, which involved more than 240 companies, for a total issue amount exceeding 1 billion euro".

Marco Mandelli, Chief Corporate & Investment Banking Officer of BPER Banca, said: "BPER Banca participates through the Corporate & Investment Banking (CIB) department in this important transaction, once again demonstrating its great attention to the growth of local companies, with a particular focus on energy transition. We now have a structure that allows us to seize companies of different sizes and with different strategic needs, offering traditional or other more modern and alternative financing instruments'.

Basket Bonds - Call for Tender

Basket Bonds are a collection of mini-bonds issued by companies: SMEs with at least one operational office in Emilia-Romagna, with the exception of companies operating in the agriculture, fishing and aquaculture sectors can access the instrument. The mini-bonds are sold, through a complex securitisation system, to institutional investors. This programme represents the main investment route for the region to support the access to alternative financing channels for local businesses.

Key features include mini-bond denominations from a minimum of 2 million euro to a maximum of 4.8 million euro, with a duration of up to eight years and possible pre-amortisation of up to 24 months.

Thanks to the presence of the regional first-loss guarantee, issuing companies will achieve significant savings in terms of lower credit costs.