Schuldschein from an international investor’s perspective
Penelope Smith, Director, Head of non-German Schuldschein Origination, DCM Loans at Commerzbank, considered the role of this unique private placement instrument in international investors’ portfolios.
The Schuldschein has gained a following among corporate borrowers as a means to raise money on the private placement market. Characterized by simple documentation and a high level of flexibility, the Schuldschein has been traditionally known for funding Germany’s industrial Mittelstand.
Who is investing in Schuldschein right now?
What are the attractions of Schuldschein for these investors?
How do the yields on Schuldschein compare with other instruments?
There is talk about QE in Europe coming to an end. What would that mean for the Schuldschein market?
What has growth in the market been like?
How is geographic and sector coverage developing?
What would you say are the key questions an investor needs to be asking when appraising a deal?
We continue to see the international investor base expanding, and it is not unusual to see a first time investor in nearly every deal. Arrangers still make efforts to widen the investor base further, visiting new regions and removing the miscomprehensions many still harbour about what is now an international product. As the investor base increases, the volume and number of transactions will also be able to increase and the future continues to look bright for the Schuldschein market.
This communication is issued by Commerzbank AG and approved in the UK by Commerzbank AG London Branch, authorised by the German Federal Financial Supervisory Authority and the European Central Bank. Commerzbank AG London Branch is authorised and subject to limited regulation by the Financial Conduct Authority and Prudential Regulation Authority.