HSBC and the European Investment Bank (EIB) have agreed a €200mn facility to finance trade for mid-caps and SMEs in Greece.
The agreement is part of the EIB’s Trade Finance Facility scheme for Greece, under which the EIB guarantees letters of credit and other trade instruments issued by Greek banks to overseas banks for international trade carried out by local companies.
First launched in 2013 in the wake of a succession of credit agency downgrades for Greece that saw its businesses forced to pay for goods up front, the EIB’s Trade Finance Facility seeks to mitigate systemic and transaction risk within the Greek trade finance space, and has so far supported almost €1bn of international trade activity for the country.
“Export-focused companies are an integral part of the Greek economy and expanded international trade is crucial for economic growth. Trade finance is essential for most international trade and the EIB is committed to working with international and Greek banking partners to overcome trade finance barriers,” says Christian Kettel Thomsen, the EIB’s vice-president responsible for lending in Greece. “The new €200mn partnership between HSBC and the EIB builds on the success of previous trade finance co-operation and ensures that leading Greek companies can secure access to global markets.”
“Our partnership with the EIB encourages the expansion of international trade by supporting small and medium-sized business to trade internationally,” adds Vinay Mendonca, chief growth officer for global trade and receivables finance at HSBC. “The expansion of the Trade Finance Facility by a further €200mn builds on the success of the previous agreements and will help even more Greek companies to grow and prosper.”
HSBC’s contribution covers the remaining amount outstanding under the EIB’s third expansion of the facility to a total of €550mn, up from the original €500mn, following an agreement signed between the multilateral lender with Citi for €350mn last year. The Greek banks involved are Eurobank, the National Bank of Greece and Piraeus Bank.