First closing for the Piedmont Basket Bond fund
The target has been set at 37.5 million, with support from Finpiemonte and the regional government – The initiative aims to facilitate SMEs’ access to the capital market
The Basket Bond Piemonte fund has become operational with a target fundraising total of €37.5 million, having achieved an initial closing of €16.5 million. The initiative aims to facilitate access to the capital markets for Piedmont-based businesses, in support of investment projects. The fund, established by Sinloc Investimenti SGR, has as its initial backers Finpiemonte – contributing €7.5 million – and the Piedmont Region, and pools mini-bond issues from Piedmontese SMEs into a portfolio intended for institutional investors. The partnership with MedioCredito Centrale, which will subscribe equally to the individual issues, will enable the total amount subscribed by the fund to be doubled.
First closing
The first closing of the fund – which is the main instrument of the extraordinary regional finance programme promoted by Finpiemonte, a body controlled by the Piedmont Region – has therefore been finalised. ‘The initiative,’ the Region explains, ‘introduces an innovative financing instrument into the Piedmont region that pools the mini-bond issues of local businesses into a single portfolio, making new resources available to support investment, development and competitiveness-boosting programmes.’
As part of the public-private partnership that characterises the initiative, Banca Alpi Marittime, Banca d’Alba, Banco Azzoaglio, Banca di Cherasco and Cassa Centrale have collectively subscribed to shares totalling 9 million euros; Mediocredito Centrale is supporting local investors with a commitment equal to the value of the regional fund, bringing the total amount available at the first closing to €33 million. Over the coming months, the operation may be expanded through the involvement of new institutional investors, up to a maximum total amount of €37.5 million raised by the fund, which, together with MCC’s contribution, will amount to €75 million in potential investments.
Who it is aimed at and how it works
The programme is aimed at Piedmontese SMEs ‘that demonstrate economic and financial stability and prospects for growth’. The selected companies will be able to issue minibonds as part of an aggregate portfolio, thereby gaining access to funding that complements traditional bank loans, to be used for investment and growth plans.
The financial structure provides for recourse to the Special Section of the Central Guarantee Fund, which covers 80 per cent of the loss on each individual issue, up to a limit of 25 per cent of the fund’s total amount. Issuing companies will also be eligible for a non-repayable grant provided by the Piedmont Region to reduce issuance and placement costs, up to 50,000 euros. For bonds that qualify as ESG-linked, the grant ceiling is increased, with the aim of incentivising the achievement of measurable environmental and social targets.
