InnovFin Presentation

InnovFin Product Overview

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InnovFin Product Overview

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InnovFin SME Guarantee

Up to 50% loss coverage

(Principal + Interest 90D)

Full Delegation to Financial

Intermediaries

Automatic Coverage/Inclusion

Attractive Guarantee

Terms

Favourable Capital

Treatment

Guarantee and

Counter-Guarantee

This guarantee instrument covers the risk related to losses of a portfolio

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What Transactions can be supported?

Loan amount: min EUR 25k – max EUR 7.5m (only Senior Debt)

Loan maturity: min 1 year – max 10 years

Currency: EUR and local currency

Max Portfolio: EUR 400m per intermediary – EUR 1bn per intermediary

group

Purpose of Financing: Loans, Credit Lines, Leases and Bonds

Tangible & Intangible

Assets

Working Capital

Business Transfers

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Key Guarantee Terms

Financial Intermediaries are required to transfer the Financial Benefit to

SMEs & Small Mid-caps

Financial Intermediaries are selected on a “first come, first processed”

basis

Guarantee Fee: SME

0.50% p.a.

Guarantee Fee: Small Mid-Cap

0.80% p.a.

Financial Intermediary

50

% G

uar

ante

e G

uar

ante

e Fe

e

Financial Intermediary

Guarantee from EIF

Innovative SMEs / Small Mid-caps

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Transfer of Benefit (indicative example)

Funding Costs

Fixed Costs

Margin

Without InnovFin

Financing at 4%

0.5%

0.5%

1.5%

0.5%

0.5%

1.5%

50% of financing 50% of financing

Cost of the

guarantee :

0.5% (or 0.8%

for small

midcap)

1.5%

Reduction of Cost of Risk

with InnovFin

0.5%

Cost of Risk

Ind

ica

tive

pri

cin

g m

od

el

co

mp

on

en

ts

With InnovFin

Financing at 3.5%

Total = 4% Total = 3%

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Single EU Equity Financial Instrument (managed by EIF) supporting Union enterprises’ growth and research and innovation (R&I) from the early-stage to the growth

and expansion stages

InnovFin SME Venture Capital

(EUR 430m)

EU 28, Norway, Albania, Bosnia and Herzegovina,

FYROM, Montenegro, Serbia, Turkey, Israel,

Moldova, Faroe Islands

COSME Equity Facility for Growth (EFG)

(up to EUR 660m)

EU 28, Iceland, Montenegro, Turkey, FYROM

PRE-SEED PHASE SEED PHASE START-UP PHASE EMERGING GROWTH DEVELOPMENT

LOWER RISK

Multi.Stage funds – InnovFin & COSME

on a pro-rata basis

EXPANSION

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InnovFin SME Venture Capital - Key Features

VC and BA funds focusing on early stage companies

Focus on Horizon 2020 objectives

(e.g. ICT, life sciences, clean energy,

high-tech)

Companies in pre-seed, seed, start

up phase of development

Investment size up to EUR 30m

up to 50% of total commitments

(CATALYTIC)

EIF’s standard screening and

selection process

Addressing multi-stage funds with

COSME EFG (single Call for EI)

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Investment funds/vehicles,

private equity funds

Focus on companies in their expansion &

growth phase

Investment size up to EUR 30m

Up to 25% of total commitments

Pari-passu, at least 30%

co-investment from private investors

EIF’s standard screening and

selection process

Addressing Multi-stage funds with InnovFin SME VC (single Call for EI)

COSME EFG- Key Features

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InnovFin Product Overview

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How does the MidCap Guarantee work?

EIF Financial Intermediary

Innovative Mid-Caps

3,000 employees

New Loans

50% Guarantee EUR 25m

50% loss coverage for new mid-cap loans of up to EUR 50m not covered

under InnovFin SME Guarantee

Can be complemented with EIB funding (global loan)

Pari-passu sharing of risk and pricing

Full delegation to financial intermediaries

Favourable capital treatment, English law

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How does MidCap Growth Finance work?

Direct long term debt and mezzanine finance: EUR 7.5m – EUR 25m

Loans can be structured as economic equity (silent participation)

For innovative Mid-Caps and SMEs (eligible counterparty concept)

EIB can finance up to 50% of all investments over 3 years

Streamlined EIB approval process & English law

EIF Innovative Mid-Caps

3,000 Employees

Growth Finance / Mezzanine EUR 25m

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EUR 12m

Term

loan

2013

EVS

Broadcast

EUR 25m

Term

loan

2014

Welltec

EUR 20m

Term

loan

2014

Manz

EUR 25m

Term

loan

2014

Rovio

EUR 25m

Term

loan

2013

Marposs

EUR 25m

Term

loan

2014

Pharmathen

EUR 8m

Term

loan

2014

Pramac

EUR 14m

Term

loan

2014

Novabase

EUR 12m

Term

loan

2014

eNet

EUR 7.5m

Term

loan

2014

Maier

EUR 10m

Term

loan

2014

Marangoni

EUR 10m

Term

loan

2015

SAES

MidCap Growth Finance Transactions since Launch

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Mid-Cap Product Advantages

No crowding out. Complementary finance to house banks

EIB signaling effect to attract other banks & investors (quality stamp)

Long-term lending at attractive terms (no subsidised)

Growth finance without dilution of shareholders

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InnovFin Product Overview

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How does InnovFin Large Projects work?

Senior debt (pari-passu with other senior lenders)

Eligible project required. EIB can only finance 50% of R&D and

innovation investments

Comprehensive due diligence including project due diligence

EIB standard documentation under English or Luxembourgish law

EIF Large Projects EUR 50m – EUR 600m

Direct Lending EUR 25m - EUR 300m

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Large Projects Advantages

Long term loans at attractive terms (pari-passu)

Signaling effect and quality stamp (technical expertise)

Co-financing with house-banks preferred

No cross selling & hold to maturity strategy

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InnovFin Product Overview

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EIF

How does InnovFin Energy Demo Projects work?

Broad range of instruments

EIB can only finance 50% of project costs

Comprehensive due diligence (legal, financial, technical, etc.)

EIB standard documentation under English or Luxembourgish law

Projects Direct Lending

Up to EUR 75m

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Which projects can be supported?

Pre-commercial stage

Loan amount: min EUR 7.5m, max EUR 75m

Loan maturity: max 15 years

Currency: EUR and local currency

Eligible Projects

Renewable energy Fuel Cells, Hydrogen

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Risk and pricing

EIB 100% risk

Implementation

and

Performance

Risk

Design, Construction

and Early Operational

Phase

Operating Risks and Market Risks

Operating Phase

Le

ve

l o

f risk

Time

EU 95% FLP risk

EIB 5% RRT risk

Guarantee release

FLP – First loss piece

RRT – Residual risk tranche

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Technical and Financial Guarantee Release Tests

Two conditions must be met to activate the guarantee release :

Financial performance is in line with pre-agreed cover ratios demonstrating

that the project can generate the expected level of cash flows.

The following aspects are to be confirmed by a competent external

advisor:

Evidence of project

completion

Achievement of

minimum technical

performance

Project is fully

operational

1 2 3

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InnovFin Product Overview

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Broad range of products - standard debt instruments (i.e. senior,

subordinated, and mezzanine) to risk sharing instruments (RSL) with

forgiveness options

EIB can only finance 50% of project costs

Comprehensive due diligence (legal, financial, technical, etc.)

EIB standard documentation under English or Luxembourgish law

Projects Direct Lending

Up to EUR 75m

How does InnovFin Infectious Diseases work?

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Projects which have passed pre-clinical stage and for which clinical

validation is needed for further development

Loan amount: min EUR 7.5m, max EUR 75m

Loan maturity: up to 7 years

Currency: EUR and local currency

Pricing : commensurate to the risk incurred

Eligible Projects

Vaccines, drugs Medical and

diagnostic devices Manufacturing plants

Infectious diseases

Innovative

Which projects can be supported?

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Review of all Promoter's Infectious Diseases R&D activities

Definition of risk-sharing portfolio (entire portfolio or sub-set of the most

promising compounds incl. at least 5-10 different streams to diversify risk)

Pharma

InnovFin Infectious Diseases

Innovative vaccines and R&D financing

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FLP and RRT to be assessed every 6 mths by

Steering Committee

EU - EIB Sharing of Risk

R&D and

authority

approval risk

Pre-commercial phase

Operating Risks and Market Risks

Commercial phase

Le

ve

l o

f risk

Time

EU 95% FLP risk

EIB 5% RRT risk

FLP – First loss piece

RRT – Residual risk tranche

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Risk-Sharing-Loan Mechanism

Set up of development milestones/related payments to be structured to target, on a probability

adjusted basis, the repayment of the RSL plus a return commensurate with the risk incurred

Compound

financing

Step 1 Step 2 Step 3 Next steps

Success

Failure

x%

1-x%

Milestone 1 Milestone 2 Milestone 3

Success

Failure

Success

Failure

x%

1-x%

x%

1-x%

Forgiveness

option

Forgiveness

option

Forgiveness

option

Repayment 1

Repayment 2

Repayment 3

x% Milestone achievement

probability

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InnovFin Product Overview

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• Hydrogen Mobility Germany

• Myrrha

• European Lead Factory (ELF)

• European Spallation Source

(ESS)

• Global TB Vaccine Partnership

• Light Project Advisory (LPA)

pipeline

• Infectious Diseases Financing

Facility (IDFF)

• Circular Economy (CE)

• Key Enabling Technologies (KETs)

• Bio -Economy

• Strategic Energy Technology Plan

(SET Plan)

• Financing options for Pan-

European RI

• Web tool to guide innovative

companies

Enable maximum access to finance for innovative projects

Improve bankability/investment

readiness

Enable earlier/ faster access

to finance

Improve framework conditions

for financing

Develop “business case” for

new financing mechanisms in

RDI sectors

Innovation Finance Advisory- What do we do?

Horizontal Activity Project Advisory

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Visit www.eib.org/innovfin

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