Mini-bonds in Italy: Results of the 5th edition of its Report
Mini-bonds in Italy: Results of the 5th edition of its Report
2019-03-07
The Italian mini-bond market continues to strengthen, as the number of issues has kept rising through all 2018, continues to strengthen, as the number of issues has kept rising through all 2018 continues to strengthen, as the number of issues has kept rising through all 2018.

From November 2012 through December 2018, 746 mini-bonds (mostly bonds) were issued by 498 Italian companies, Mainly operating in the manufacturing industry, For a total value of 25.2 billion euro. A total of 260 SMEs have issued mini-bonds for 4.6 billion euro. Also, the report found that 636 mini-bonds below a 50 million euro value each were issued for a total of 4.9 billion euro.

In 2018 the Italian mini-bond market totaled 198 issues compared to 170 in 2017, but with an investment return of 4.3 billion euro (versus 5.5 billion in 2017) its value has dropped to a record low: 22.40 million euro in the second half of 2018 (versus 45 million) and 20.85 in the first half.
The report has found a total of 159 issues under the 50 million euro threshold. The collection made by SMEs has halved - 668 million against 1.4 billion - while issuers have increased: 176 (of which 123 "debutants") compared to 137 in 2017. Public limited companies have more than doubled, from 21 to 45 .

At the end of 2018, the ExtraMOT PRO market managed by Borsa Italiana, the most suitable list for Italian mini-bonds, Reached a record high of 207 listed securities (44%), the highest value ever seen.

The number of issues listed abroad has increased by 12%. The average duration in 2018 is 5.2 years, a slight increase compared to 4.9 years in 2017. The buyers of mini-bonds worth less that 50 million euro are mostly closed-end private debt funds (26% of investments compared to the sample) and foreign investors (25%).

“Expectations for 2019 are more conservative than in previous years due to the rise of negative signals from the economic cycle, uncertainties in the domestic development strategies and the potential competition from direct lending operations that are becoming more common on the market” - Says Giancarlo Giudici,  scientific director of the Mini-Bond Observatory  - “Volumes in 2019 will be similar to those in 2018. We hope that the ELTIF will succeed where the RIPs have not, i.e. channeling resources to SMEs ".

Mini-bonds - defined as debt securities issued by non-financial Italian companies - remain an established funding source for enterprises that is alternative to bank lending, especially in preparation for subsequent transactions with more complex institutional investors such as private equity or stock exchange listing.

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