El RMBS Prado XII securitization fund of Unión de Créditos Inmobiliarios (UCI) It has become one of the main financial levers for boosting energy efficiency in homes in Spain. This operation, involving the EIB Group and the Official Credit Institute (ICO), strengthens the availability of financing for energy rehabilitation reforms and for the purchase of new homes with almost zero energy consumption.
Thanks to this structure, UCI will be able to channel new sustainable loans aimed at both individual owners and communities of neighbors who want improve the energy performance of their buildingsThis is a formula that combines the mobilization of private capital with the support of European and Spanish public financial institutions, aligned with the climate strategies of the European Union.
Participation of the EIB Group and the ICO in the securitization fund
In this operation, the The EIB Group, comprising the European Investment Bank (EIB) and the European Investment Fund (EIF), has joined the ICO to participate in the RMBS Prado XII securitization fund promoted by UCI, the joint venture formed by Banco Santander and the BNP Paribas Group specializing in mortgage financing.
The central objective of this joint venture is Strengthen funding aimed at improving energy efficiency of existing homes, as well as facilitating the purchase of newly built homes that meet the nearly zero energy consumption standards promoted by European regulations.
According to the entities involved, This is the second joint transaction between the EIB Group, the EIF, the EIB and the ICO with UCI, which demonstrates a continuity in the strategy of using the securitization of residential mortgages as a way to channel resources towards projects with a positive climate impact.
The RMBS Prado XII collection is structured around a portfolio of mortgage loans generated in SpainThis portfolio consists of residential mortgages that are currently paid off. In this way, UCI leverages an existing asset on its balance sheet to obtain additional liquidity that will be directed towards new green loans.
Amounts committed and financial structure of the operation
In terms of volume, the ICO will commit 100 million euros In this transaction, structured through the acquisition of part of the senior tranche of the securitization. This participation is in addition to the contribution of the EIB Group, which will allocate a total of 225 millones de euros to the same section.
The contribution from the EIB Group is distributed as follows: 150 million euros come from the EIBWhile 75 million are contributed by the European Investment Fund (EIF)Both amounts are concentrated in the most senior tranche of the structure, which is the one that presents the lowest level of risk within the securitization scheme.
Together, the EIB Group and the ICO become acquire a portion of the senior tranche of a €650 million loan portfolioThis portfolio consists of residential mortgages that are up to date with their payments, which reduces the probability of default and contributes to the solidity of the securitization vehicle.
This configuration allows the ICU free up capacity in your balance sheetso that the entity can originate new sustainable loans aimed at energy rehabilitation and the purchase of efficient housing, while maintaining a prudent risk management framework.
Key features of the RMBS Prado XII securitization
The structure of the RMBS Prado XII securitization fund incorporates various mechanisms designed to protect investors to guarantee the vehicle's stability over time. Among the main elements, the amortization schedule for the different stages stands out.
Initially, the operation anticipates a prorated amortization for all tranches of the securitization, so that the principal payments are distributed proportionally. However, once five years have passed since the issuance, and coinciding with the so-called adjustment date, an accelerated amortization scheme is activated.
This change to accelerated depreciation implies that, after that five-year periodThe principal repayment is focused on the higher credit quality tranches, strengthening the position of senior investors as the transaction progresses over time.
Another relevant element of the transaction is the existence of a specific cash reserveThe purpose of this reserve is to provide an additional buffer against potential interest shortfalls. It acts as a protective mechanism, allowing bondholders to be paid in the event of temporary deviations in the mortgage portfolio's cash flows.
Furthermore, the structure includes mechanisms for deferring interest payments for the mezzanine and junior tranches. If a deterioration in portfolio performance is detected—for example, an increase in delinquency—these interest payments may be postponed in order to prioritize the stability of the more senior tranches and strengthen the overall soundness of the vehicle.
Boosting green loans for homes and homeowners' associations
One of the highlights of this securitization fund is the specific use that will be given to the funds raisedUCI will allocate the funds to the granting of new sustainable loans aimed at different beneficiary profiles.
On the one hand, funding is planned for individuals who wish to undertake energy efficiency renovations in their homes, such as improving thermal insulation, replacing windows, the heating and cooling system renovation by other more efficient ones or the installation of renewable self-consumption solutions.
On the other hand, a significant portion of the loans will be directed towards homeowners' associations that promote energy rehabilitation projects at the scale of a whole building. This type of action, which may include the thermal envelope, the modernization of common facilities or the optimization of consumption, usually requires larger investments and, therefore, access to adapted financing.
In addition to the rehabilitation of existing buildings, the program also includes the financing the purchase of newly built homes with nearly zero energy consumptionThese homes are designed according to very demanding standards in terms of insulation, ventilation, and the use of renewable energy, which significantly reduces energy needs and associated emissions; in this sense, the demand for nearly zero-energy homes It is on the rise.
Overall, the operation makes it easier for a specialized entity like UCI to expand its range of green products and reach a greater number of households, contributing to accelerating the pace of renovation of the Spanish residential stock in line with European climate goals.
Alignment with the Renovation Wave strategy and European climate roadmaps
The transaction falls squarely within the European Commission's Renovation Wave strategyThis initiative aims to significantly increase the rate of energy renovation of buildings in the European Union. The European building stock is responsible for a substantial portion of energy consumption and CO2 emissions.2Therefore, its modernization is key to moving towards climate neutrality.
By channeling funding towards improving the efficiency of existing homes and towards acquiring homes with near-zero energy consumption standardsThis securitization fund fits with the Renovation Wave philosophy: leveraging innovative financial instruments to mobilize private and public resources on a large scale.
The initiative also aligns with the EIB Group's strategic priority for climate action, included in its Strategic Roadmap for the period 2024-2027. In this document, the European Investment Bank defines itself as the "climate bank" of the European Union and commits to increasing the weight of climate and environmental investments in its portfolio.
Furthermore, the operation falls within the Phase 2 (2026-2030) of the Climate Bank RoadmapIn this document, the EIB Group details how it intends to contribute to the objectives of the Paris Agreement and the European Green Deal. Support for securitization schemes linked to green mortgages and energy-efficient building renovations is one of the tools being considered to achieve this.
In this way, the participation of the EIB Group and the ICO in the RMBS Prado XII fund not only has a direct financial impact, but also strengthens the framework of climate public policies in Europe, providing a concrete example of collaboration between public institutions and private entities to decarbonize the housing stock.
The launch of this UCI securitization fund focused on energy efficiency in homes illustrates how Structured financial solutions can become a key ally in the fight against climate change. When designed with sustainability criteria and aligned with major European strategies, combining resources from the EIB Group and the ICO with UCI's mortgage expertise opens the door for more households and communities in Spain to access green loans to renovate their buildings or acquire high-energy-performance homes, moving towards a more efficient, comfortable, and less emissions-intensive housing stock.
