January 30 (SeeNews) - The European Bank for Reconstruction and Development (EBRD) said on Monday it is providing 25.6 million euro ($28 million) in credit protection to RBA, the Croatian subsidiary of Austria’s Raiffeisen Bank International AG, in the form of an unfunded financial guarantee.
“The transaction covers a loan portfolio of performing small and medium-sized enterprises (SMEs) and corporates worth about 366 million euro,” the EBRD said in a press release, adding that the deal is introducing a new financial instrument, synthetic securitisation, to the Croatian market.
The securitised loan portfolio, which will remain on RBA’s balance sheet, is split into senior, mezzanine and junior tranches. Under the transaction, the EBRD will assume the credit risk of the mezzanine tranche, while RBA will retain the credit risk of the senior and junior tranches.
RBA is Croatia’s fifth-largest universal bank in terms of assets, and operates 62 branches in 36 cities and towns.
($ = 0.917 euro)
Raiffeisenbank Austria d.d. is among the biggest banks in SEE, for more reference take a look at Top 100 banks