Corporate Finance via Deutsche Börse — Status Quo

In early September 2014, Europe's top central bank chief Mario Draghi pushed the key interest rate down to a microscopic 0.05 percent. Banks can borrow money more cheaply than ever before in European history. When the capital market is flooded with money and interest rates are at a historic low, it should be possible for companies to gain easy access to new debt financing options. However, especially in the case of smaller companies, the increased requirements on the equity capital to be deposited by the banks depending on the creditworthiness have resulted in a completely different picture when it comes to granting loans. Deutsche Börse offers solutions, corporate bonds are also interesting for private equity companies.

Young, fast-growing companies often find it difficult to raise outside capital for their further development, as their business model is not yet as established as that of large corporations and is therefore subject to greater external influences. Deutsche Börse offers a solution for companies when it comes to debt financing: Since April 2011, it has been possible to raise money by means of corporate bonds, which can be subscribed, listed and traded directly on the stock exchange. The route here is via the Entry Standard transparency segment for corporate bonds.

Development Entry Standard for corporate bonds

Since the launch of the segment, the Entry Standard has developed positively. Since its launch, around 50 companies have been able to issue one or more bonds. The advantages here are obvious for both investors and companies. On the corporate side, this method of financing enables fresh capital to be raised for further growth, further acquisitions or for the replacement of existing refinancing measures. On the investor side, a listed bond provides daily liquidity and a debt investment opportunity in smaller companies that is otherwise only available through equity investments. Thus, this segment offers a welcome portfolio diversification opportunity for investors.