Morningstar DBRS' Analytical Treatment of State-Guaranteed Italian SME Loans in SME-CLO Transactions

The Italian Central Guarantee Fund (CGF) is a fund managed by Mediocredito Centrale S.p.A., a bank ultimately owned and controlled by the Italian Ministry of Economy and Finance. Its main activity is to issue state guarantees securing loans for small and medium-size enterprises (SMEs) in order to facilitate their access to traditional financing via the banking system.

In this commentary, we outline our application of Rating CLOs Backed by Loans to European SMEs and treatment of CGF guarantees in the context of SME-CLO transactions.