Home News BBVA Securitizes a 500 Million Euro Project Finance Loan Portfolio

BBVA Securitizes a 500 Million Euro Project Finance Loan Portfolio

BBVA Securitizes a 500 Million Euro Project Finance Loan Portfolio

BBVA has closed a risk sharing transaction with Alecta and PGGM for a project finance loan portfolio worth 500 million euros. This portfolio represents a variety of projects, mainly in Spain and Western Europe, with one third of the portfolio consisting in renewable energy related projects, as that has been a clear focus in BBVA origination activities. The bank  retains a risk alignment of minimally 20% for each project in the portfolio.

The transaction also establishes a framework for future collaborations with institutional investors PGGM and Alecta, which rely on BBVA’s origination capabilities to continue investing and provide the bank with capital that will allow it to continue promoting projects that help combat climate change.

BBVA has been actively using credit risk sharing to capitalize their small- and medium-size lending activities, and is now expanding this to its project finance loan book. This is a further step in the sophistication of risk management in its wholesale banking business. BBVA has a proven track record in the project finance business, which is managed from its BBVA Corporate & Investment Banking division, focusing on its core markets and leveraging its relationships with key clients.

Pablo Fenoll, Head of Portfolio Management at BBVA Investment Banking & Finance: “Credit risk sharing transactions have proven to be a very efficient tool to recycle regulatory capital and reduce risk-weighted assets at a very attractive cost for the bank. We are proud to establish this long-term co-investment relationship with two investors of the caliber of Alecta and PGGM.”

Angélique Pieterse, Senior Director at PGGM says: “We are very happy to be adding BBVA as one of our latest risk sharing relationships, as we add a counterparty with a strong reputation and expertise. The longer dated profile of loans to infrastructural, social and energy related projects fits well with the long-term, buy-and-hold approach of our mandate. Next to that, the transaction reflects both our and our end-investor PFZW’s ambition to contribute to the Sustainable Development Goals. One of the ways to do that is by teaming up with banks that have high-quality origination capabilities and providing them with capacity to grow the lending to projects that help fight climate change. We hope there will be many more transactions to follow.”

Tony Persson, Alecta’s head of Fixed Income and Strategy, shares: “For Alecta the transaction offers a valuable source of credit diversification as it presents the first risk sharing investment based on project finance loans. This fits well with the long-term strategy of our fund and will create value for our 2,6 million Swedish customers.”

Fiscal Stimulus Bolsters US Economic Growth in Q1, Fastest GDP Growth Since 2003

The second-fastest gross domestic product growth since the third quarter of 2003, reported by the Commerce Department on Thursday, left output just 0.9% shy of its level at the end of 2019.

US Economy Grew Robustly in First Quarter

GDP grew at a 6.4% annual rate in the quarter, leaving the economy within 1% of its peak.

Asia-Pacific Markets Broadly Lower As Investors Turn Cautious

Asia-Pacific markets struggled for gains Friday as investors turned cautious, despite a positive finish stateside in the previous session.

World Shares Near Record High on Strong US Economic Data and Earnings

US economic growth accelerated in the first quarter, fuelled by massive government aid.

How the US Won the Economic Recovery

I looked for a country that got the economic response to Covid-19 right. I found the US.

Barclays Boss Predicts Biggest Economic Boom Since 1948

The UK is about to experience its biggest economic boom since the aftermath of World War Two, according to Barclays boss Jes Staley. His upbeat...

Buying American Is Easier Said Than Done: Will Biden’s Plan Juice the US Economy?

Joe Biden and Donald Trump don't agree on much, but this much they do: We should buy American products. But that's easier said than done.

Silver Down As Dollar and Yields on Bonds Rose as US Economy Advanced

Benchmark U.S. 10-year Treasury yields hovered near a more than two-week high, increasing the opportunity cost of holding non-yielding bullion.

Yellen Doesn’t See Biden Plan Creating Inflation ‘Issue’

President Joe Biden’s economic plan is unlikely to create inflation pressure in the U.S. because the boost to demand will be spread over a decade, said Treasury Secretary Janet Yellen.

Inflationary Pressure, Hawkish Fed Official Remarks Keep US Stocks on Leash

Dow added 2.4%, the S&P 500 gained 5.6%, and the Nasdaq jumped 7%. Dow was down 0.54% at 33,875 while the S&P was down by 0.72%. Nasdaq was down by 0.85%.