Baltics Commercial Paper Framework

approved

An investment framework of up to EUR 75 million to subscribe to Commercial Paper ('CP') to be issued by non-financial Baltic firms. The CP is a new tradeable instrument for the region that could play a key role as part of the Covid-19 recovery process by providing non-financial corporates with an alternative source of financing for short-term liquidity and working capital needs. The framework aims to address the corporate financing needs at a regional level by mobilising investment funds from the institutional investor sector and is supported by a Memorandum of Understanding ('MoU') signed in 2021 by all the Baltic Central Banks, NIB and EBRD to support the development of the regional CP market. The proposed development of a Baltic CP market is also supported by the European Commission which indicated strong interest in this initiative as a template for delivering the wider CMU initiative across the European Union. Ultimately, with a dedicated framework, the Bank will be well positioned to contribute in a structured and consistent way to developing the necessary critical mass needed to develop the CP market. The Bank's participation as an investor helps build issuer momentum and provides a strong signal to stimulate other investor interest as part of the post-Covid-19 recovery process and to support the efforts of Baltic issuers to diversify funding sources.