EMF-ECBC Welcomes the Launch of the First European Secured Note (ESN) Programme to Support SME Financing
The European Mortgage Federation – European Covered Bond Council (EMF-ECBC) welcomes the recent announcement by Bpifrance of the public launch of its €2 billion European Secured Note (ESN) programme, a landmark initiative designed to strengthen and diversify the financing of small and medium-sized enterprises (SMEs) across Europe.
A Milestone for the Development of European Secured Notes
Providing financial support for the SME sector in the current geopolitical landscape can be a strategic driver to foster the energy transition/independence and reinforce the defence sector. In this context, the European Secured Note concept represents an innovative approach and the EMF-ECBC believes that the launch of the first ESN programme represents a major step forward in the development of operational solutions for a pan‑European, market‑based financing instrument aligned with the objectives of the European Union’s Savings & Investment Union (SIU) and the long‑standing policy vision of the European Commission.
Supporting the Real Economy and Financial Stability
ESNs are a dual‑recourse instrument can efficiently mobilise private capital towards the real economy, in particular SMEs, by building upon the proven foundations of covered bond technology and best market practices. ESNs benefit from dual recourse, combining:
- Recourse to the issuer, and
- Recourse to a segregated pool of medium‑ and long‑term secured and unsecured SME loans.
ESNs are a complementary asset class to traditional covered bonds, extending the benefits of secured, high‑quality funding to financing pools beyond residential mortgages and public sector exposures.
The EMF-ECBC believes that ESNs are strategically important in:
- Diversifying funding sources for banks and public financial institutions active in SME lending (which so far in the EU are mostly reliant upon bank funding);
- Enhancing financial stability through dual‑recourse, asset‑based structures, which have proven highly resilient in past financial crises;
- Supporting counter‑cyclical financing of the real economy, including during periods of market stress;
- Financing categories of assets which are essential for the transition and competitiveness of the EU economy; and
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Providing robust and standardised disclosure. To further support the growth of this asset class, the EMF-ECBC will develop robust and standardised disclosure models based on the pre-existing Covered Bond Label Harmonised Transparency Template (HTT).
Commenting on this development, EMF-ECBC Secretary General, Luca Bertalot said:
“The operationalisation of the ESN concept is a landmark development for European capital markets and for SME financing, providing a tangible, high‑quality example of how European Secured Notes can be implemented using dual recourse principles, providing secured funding to new asset classes.”
Looking Ahead
The EMF-ECBC looks forward to supporting further dialogue between policymakers, issuers, investors, and regulators to foster the development of a consistent and scalable ESN market across jurisdictions. This is a conversation that will be advanced at the upcoming EMF-ECBC Roundtable on ESNs, organised in cooperation with the Official Monetary and Financial Institutions Forum (OMFIF), to be held in Brussels on 22 June 2026.
Contact:
Luca Bertalot
Secretary General
Tel: +32 2 285 40 35