White & Case advises EIF and EIB on synthetic securitisation of DLRO-originated leasing receivables portfolio

Global law firm White & Case LLP has advised the European Investment Fund (EIF) and the European Investment Bank (EIB) on a synthetic securitisation of leases granted to small and medium-sized enterprises (SMEs) in Romania originated by leasing company Deutsche Leasing Romania IFN S.A. (DLRO), a member of the Deutsche Leasing Group.

"To support new lending capacity to SMEs, EIF and EIB made securitisation investments of more than €3 billion during 2023, over 55 percent of which were focused on Central & Eastern Europe," said White & Case partner Dennis Heuer, who co-led the Firm's deal team. "The DLRO deal is one of several transactions on which we have advised EIF and EIB recently."

The transaction is expected to support small businesses and mid-caps in Romania, with an emphasis on environmentally sustainable projects, supporting a transition to climate neutrality and contributing to job creation and economic growth. The EIF guarantee on the mezzanine and senior tranches covers a reference portfolio of approximately €330 million.

Half of the EIF's exposure to the senior tranche and 100 percent of its exposure to the mezzanine tranche is in turn counter-guaranteed by the EIB and enables the redeployment of DLRO's capital to support the economy.

DLRO retains the junior tranche and full exposure to a set of selected leases with similar characteristics to the referenced exposures. The transaction features a use-it-or-lose-it synthetic excess spread mechanism, a three-year replenishment period and a pro-rata amortisation of the senior tranche and the mezzanine tranche, subject to performance triggers.

The White & Case team which advised on the transaction included partners Dennis Heuer (Frankfurt), Ingrid York (London) and Arnaud Cagi-Nicolau (Luxembourg), local partner Claire-Marie Mallad (Frankfurt), and associates Reetu Vishwakarma (Frankfurt), and Konstantinos Strakas (Luxembourg).

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