Investors · Bond programmes

Bond programmes for institutional investors, banks and fixed-income funds

Two programmes issued by European Sustainable Investments, a Luxembourg securitisation vehicle, with bonds backed by loans to companies. Issues funding loans under the European Investment Fund programme carry an EIF guarantee of up to 80% of the nominal and a target investment-grade rating. Alter5 invests 5% in each issue.

Access to transactions Investment criteria

Programme guarantor

Information for qualified investors and professional clients. It constitutes neither an offer nor an investment recommendation.

Bond programmes

Issues are made from dedicated compartments of European Sustainable Investments S.A. (ESI), a Luxembourg securitisation vehicle. The bond is senior and its asset is the loan to the company or project together with its security. The EIF-guaranteed programme and the conventional programme differ in cover, size and use of proceeds.

EIF-guaranteed programme

EIF-guaranteed bonds

A €200m programme for SMEs and midcaps, focused on investment linked to sustainability, the energy transition and energy efficiency. Loans of €5m to €15m, with a European Investment Fund guarantee of up to 80% of the nominal under InvestEU and a target investment-grade rating.

Green loans to EU SMEs and midcaps: energy transition
EIF guarantee of up to 80% of the nominal, first-demand and irrevocable
Target investment-grade rating, assigned by an ESMA-registered agency
Green bonds aligned with the ICMA principles; collateral over real assets
InvestEU eligibility verified and guarantee confirmed before going to market

Conventional programme

Conventional bonds

Issues without a public guarantee and with no predetermined size limit. No restriction on use of proceeds.

Capex, acquisitions, refinancing, project finance, real assets and working capital
Contractual security depending on the transaction: asset pledges, parent company guarantee
3 to 5 years, bullet repayment, fixed coupon or Euribor plus margin
Unrated, or rated by an ESMA-registered agency
Admission on MARF, Vienna MTF, Euronext Dublin or the Luxembourg Stock Exchange

The holder has limited recourse to the assets of the compartment and no direct claim against the financed company. Ring-fencing (arts. 62–64 of the Luxembourg Securitisation Law) does not exclude default on the underlying loan or loss of capital.

EIF-guaranteed bonds

Programme terms and structure

Programme: €200m · one issue per compartment · loans of €5m to €15m
Ranking and repayment: Senior, guaranteed by the EIF · bullet repayment
Tenor and coupon: 3 to 5 years · fixed annual coupon or Euribor plus margin, per issue
Rating: Target investment grade · assigned by an ESMA-registered agency
Use of proceeds and framework: Green loans to SMEs and midcaps eligible under InvestEU · aligned with the ICMA principles
Minimum investment: €100,000 · qualified investors

Issuing vehicle

European Sustainable Investments S.A. (ESI), a Luxembourg securitisation vehicle, issues the bonds through separate compartments. Each compartment grants the loan to the company or project and issues the senior bond subscribed by the investor. The holder's recourse is limited to the assets of the relevant compartment.

Issuer: ESI S.A., Luxembourg
Compartments: One per issue
Service providers: PwC, PalmerFS, GSK Stockmann

European Investment Fund guarantee

The EIF guarantees up to 80% of the nominal of each issue under InvestEU, on a first-demand and irrevocable basis. Upon default, ESI notifies the EIF and payment to the holder is made within 60 days of notification, in accordance with the applicable conditions. Cover is partial: the remainder is subject to the contractual security of the transaction.

Cover: Up to 80% of the nominal
Payment: 60 days from notification
Governing law: Luxembourg

Capital charge

Compared with an unrated bond, the EIF guarantee and an investment-grade rating, once obtained, reduce the capital an investor must hold. Programme estimates: spread risk for insurers and effective risk weight for banks. Treatment depends on each investor's regulatory framework, method and portfolio.

The effective capital charge is for each investor to determine under its own regulatory framework.

Insurers: ≈ 7% on net exposure
Banks: ≈ 20% effective risk weight
Pension funds: Debt with a target investment-grade rating, admitted to trading; eligibility depends on each institution's investment policy

Capital treatment assumptions

Reference for an unrated bond: Delegated Regulation (EU) 2015/35 (Solvency II), Article 176(4), 3% per year of modified duration (15% at five years); Regulation (EU) 575/2013 (CRR), Article 122, 100% risk weight.
The figures for the guaranteed programme are estimates based on Regulation (EU) 575/2013 and Delegated Regulation (EU) 2015/35, with recognition of the EIF guarantee subject to the terms of each issue.
They do not constitute a determination of any investor's capital requirement.

Five eligible categories · InvestEU

Renewable energyGeneration, storage, components

Energy efficiencySelf-consumption, heat pumps, industrial upgrades

Green buildingsCertified construction and refurbishment

Zero-emission mobilityElectric vehicles, charging

Green ICTDigital solutions that reduce consumption

How the issue works

Alter5 originates the transaction and prepares the analysis.

Company or project

financed company or project

Issuer · Luxembourg

ESI S.A. · Compartment n

asset: loan + security · liability: senior bond

Institutional investor

insurers · pension funds · asset managers · banks

loan / debt service

holder's recourse limited to the compartment

senior bond / subscription

holder's recourse limited to the compartment

01Screening

02Due diligence

03Structuring and documentation

04Rating and admission

05Monitoring

Investment risks

Credit. Payment depends on the company or project servicing the loan.

Concentration. A single obligor per compartment.

Illiquidity. Limited secondary market; admission does not ensure a counterparty.

Refinancing. Single bullet repayment at maturity.

Structure. Limited recourse to the compartment; the EIF guarantee covers part of the nominal.

The documentation of each issue contains the full list of risks.

Documentation request

Access is restricted to qualified investors and professional clients. Issues are presented to the institutions whose stated investment criteria admit them. A request creates no commitment to invest and constitutes no offer on the part of Alter5.

Sharing investment criteria creates no obligation to invest and constitutes no offer on the part of Alter5. Alter5 originates, prepares and distributes the transaction. The lender grants the loan following its own analysis.

More than 200 registered institutional investors.

Corporate information addressed to qualified investors (Article 2(e) of Regulation (EU) 2017/1129) and professional clients (Annex II to MiFID II). This page does not constitute an offer, a personal recommendation or a prospectus; any offer will be made through the documentation of the issue and under an exemption in Article 1(4) of that Regulation.

Market references carry a date and a source and do not represent terms offered by Alter5. Investment may result in losses. Where an issue carries a rating, it is assigned by an ESMA-registered agency; Alter5 is not a rating agency. The European Investment Fund guarantee is subject to InvestEU eligibility, approval and applicable conditions, and covers part of the nominal.

These pages are addressed to financial institutions, institutional investors and professional investors. Nothing on them constitutes investment advice, a recommendation, or an offer to subscribe or acquire any financial instrument.