abcfinance securitisation with EIF and KfW unlocks €380m for German SMEs

The abcfinance Group has completed a landmark securitisation transaction with the European Investment Fund (EIF), KfW and private investors that is expected to mobilise more than €380 million of new financing for small and medium-sized enterprises (SMEs) in Germany.

The public-private partnership will enable abcfinance to expand leasing finance for businesses investing in vehicles, machinery and equipment, while supporting broader efforts to strengthen European capital markets and diversify funding sources for the real economy.

As part of the transaction, €85 million of the new financing capacity has been earmarked for female entrepreneurs, businesses in the cultural and creative industries, and green investment projects.

The securitisation is backed by a €500 million portfolio of lease receivables covering more than 18,000 leasing contracts with German SMEs. By transferring part of the portfolio risk to investors, abcfinance will free up regulatory capital and increase its capacity to provide new leasing finance.

Hubertus Mersmann, CEO of abcfinance, said: “As a leasing company for German SMEs, this transaction provides us with strong, sustainable financing capacity in a difficult economic environment.

“This enables us to offer our customers attractive leasing solutions and promote their growth and economic success. The partnership with the EIF, KfW and private investors marks an important step in our strategic development.”

Under the agreement, the EIF will provide guarantees totalling €280 million, helping create highly rated securities designed to attract institutional and private investors. The structure allows abcbank, part of the abcfinance Group, to release capital tied up in existing leasing assets while broadening its investor base.

KfW is investing €70 million in the EIF-backed Class A1 notes under a new mandate from Germany’s Federal Ministry for Economic Affairs and Energy as part of the Deutschlandfonds initiative, which aims to strengthen capital market financing through asset-backed securities (ABS) and asset-backed commercial paper (ABCP) transactions.

Marjut Falkstedt, Managing Director of the EIF, said: “The partnership with abcfinance is an important step to make it easier for companies in Germany to obtain leasing financing for investments, innovation and growth.

“We help to free up financing capacities – with a noticeable effect on SMEs and the economy as a whole.”

Tim Armbruster, Group Treasurer of KfW, added: “We are pleased to support the European securitisation market with this investment as part of our mandate for the Deutschlandfonds and thus make companies in Germany and Europe more competitive. With this transaction, we are opening a new chapter in our long-standing trusting cooperation with the EIF.”

In addition to supporting the senior tranche of the transaction, the EIF will provide bilateral guarantees covering the remaining €80 million mezzanine tranches. This will reduce abcbank’s risk-weighted assets, release additional regulatory capital and further increase its lending capacity to SMEs.

The transaction also aligns with the European Union’s objective of building a stronger Savings and Investment Union by converting a diversified portfolio of SME leasing contracts into tradable securities, helping channel long-term private capital into productive business investment.

The abcfinance Group provides leasing, factoring and sales finance solutions to SMEs across Germany, as well as in the Netherlands and Austria. The latest transaction is expected to support continued investment by German businesses while demonstrating how public-private partnerships can expand access to equipment finance through capital markets.