TFF 2.0: What do the banks make of it?
In June, the EIB launched its upgraded Trade Finance Facility 2.0 – to enable Greek banks to ramp up support for SMEs and Midcaps. TXF caught up with international and domestic Greek lenders to find out their responses to the revamped product.
In June, the European Investment Bank (EIB) launched its updated Trade Finance Facility 2.0. Effectively an EIB guarantee against Greek issuing banks not funding their commitments – and a follow-up to the EIB’s TFF 1.0 – TFF 2.0 incorporates a number of new elements.
To better align TFF 2.0 to market requirements, the EIB guarantee will cover up to 100% of the face value of each transaction (a threshold of 85% was in place for the original TFF 1.0) if those transactions are below one year in term and/or are agreed export related transactions which have a high direct impact on SME and Midcap employment levels.
Cover is also extended to a range of new types of transaction – pre-shipment financing, letter of credit with post financing – all aimed at relieving working capital and liquidity constraints on Greek SMEs/Midcaps. The EIB guarantee can also cover short term cash advances used by Greek SMEs/Midcaps for export-import related projects.
The confirming banks involved are Citibank, Commerzbank, HSBC and other eligible confirming lenders. The EIB guarantee beneficiaries (issuing banks) are Alpha Bank, Eurobank Ergasias, National Bank of Greece and Piraeus Bank.
The maximum eligible maturity of trade and export finance for TFF2 is three years with an availability period of up to two years. EIB’s risk coverage/participation provided to confirming banks will go up to 100%, provided the amount of an individual transaction does not exceed €25 million.
At the EIB’s launch conference, TXF caught up with some of the banks that will be using the service to discuss how the TFF will be rolled out across different organisations; the effects that the updated service will have on SMEs; and how feedback from TFF 1.0 will improve 2.0.
Syed Imtiaz Hussain – Director, financial institutions, global trade & receivables finance – HSBC Bank
Piero Rizzi – Director EMEA TTS trade – Citi Bank
Katerina Theodorou – Head of trade finance – Piraeus Bank
Guido Clary – Senior banker, investment team for Greece – European Investment Bank (EIB)
Evvy Passa – Senior director, group head global transaction services – National Bank of Greece
