Medium-sized Company Bonds Established in German Market
Almost one in four medium-sized companies is planning to issue a bond via Boerse Stuttgart’s Bondm trading segment, according to a survey on financing of medium-sized companies in Germany.
The survey, produced by consultants Seidenschwarz & Comp together with Prof Dr Burkhard Pedell of Stuttgart University, highlights the importance of alternative financing models for Germany’s medium-sized companies. At 83%, a large majority were convinced that corporate bonds in particular will become even more attractive. In the view of respondents, corporate bonds give them more independence from banks, greater financing security and a more balanced investor structure. According to the companies, the principal reasons for issuing a bond are to finance growth and acquisitions and as follow-up financing. Of those medium-sized enterprises surveyed, 15% have already made use of corporate bonds in the last three years. Without exception, these companies view corporate bonds as either positive or very positive alternative financing models.
For 74% of those surveyed, achieving a broad investor base and in particular attracting retail investors are either positive or very positive outcomes, while 83% see the improved balance between retail and institutional investors as being particularly beneficial. Seventy-one percent also expect to enhance their market profile by widening their investor base.
“The results of this survey on financing of medium companies provide further evidence of a trend we have seen for some time now towards greater diversification in terms of financing instruments,” said Christoph Lammersdorf, chief executive officer (CEO) at Boerse Stuttgart Holding.
“The success of medium-sized enterprises in particular is dependent on planning security. To this end, I believe it makes good sense to create a more differentiated financing structure. Bonds issued by medium-sized companies are one of the new options available,” said Michael Glos, German member of parliament and former economics minister.