Slovak Investment Holding, a.s. (“SIH”) has launched the SIH Anti-Corona Guarantee as a new financial instrument employing European Structural and Investment Funds to help small and medium-sized enterprises (the “SMEs“) in Slovakia to overcome the financial difficulties and liquidity problems caused by the COVID-19 crisis and to help preserve employment and retain jobs. On 30 March 2020, SIH launched the call for expressions of interest under the SIH Anti-Corona Guarantee and, under publicly available information, as of today, SIH has already signed contracts with four commercial banks operating in Slovakia, namely Slovenská sporiteľňa, a.s., VÚB, a.s., BKS Bank AG, pobočka zahraničnej banky v SR and UniCredit Bank Czech Republic and Slovakia, a.s., pobočka zahraničnej banky. In total, nine commercial banks applied for the call for expressions of interest under the SIH Anti-Corona Guarantee as published on 30 March 2020.

The SIH Anti-Corona Guarantee, as a unique financial instrument, consists of two components, (i) the first one being a portfolio guarantee, with an 80% coverage on individual loans and a 50% portfolio coverage provided to commercial banks to support provision of loans to SMEs and (ii) the second element being the interest rate subsidy reaching up to 4% p.a. of the loans being conditional upon the SMEs’ capacity to preserve the level of employment and retain jobs during the first year of the loan regardless of the economic crisis caused by COVID-19 or despite it. Under the SIH Anti-Corona Guarantee, the SMEs can benefit from low interest rate loans to even interest free loans with three- to four-year maturities and additional benefit of one-year period of deferral of instalments of the principal amount, as well as the, the interest payments, all without any requirement for a collateral.

Each of the commercial banks already participating under the framework of the SIH Anti-Corona Guarantee will have its detailed conditions ready to discuss and negotiate with interested SMEs and will administer the whole process.

You can read more on the main parameters of the SIH Anti-Corona Guarantee, conditions for SME’s eligibility for this financial instrument and criteria for use of the financial aid thereunder in our client alert on the SIH Anti-Corona Guarantee prepared by Simona Halakova and Ivan Kolenič of our Banking & Finance team on 10 May 2020 based on publicly available information, mainly as published on the webpage of Slovak Investment Holding. Full version of this client alert you can find in the PDF document SIH Anti-Corona Guarantee.