The Athens bourse looks set to see a revival of trading in corporate bonds for the next couple of months at least. Kathimerini understands that four new bulletins were submitted to the Capital Markets Commission last week, with the aim of raising a minimum of 100 million euros in total.
Sources say that construction firm GEK Terna, fuel trading enterprise Coral and clothing retailer BSB are among the companies that submitted bulletins.
The considerable decline in sovereign bond yields that started after November 28, 2017 – when the debt swap involving the exchange of PSI bonds issued in 2012 for new paper was completed – had an impact on corporate bonds too. The five new state bonds worked as a catalyst, slashing the yields of both domestic corporate paper and the international bonds that listed enterprises had issued.
Therefore companies have once again started looking into drawing cheap funds via debt issues to support their investment plans and reduce or eliminate their bank borrowing.
Kathimerini has learned that the bulk (63 percent or 616 million euros) of the 977.57 million euros raised last year through the Athens Exchange platform came from the issue of corporate bonds. The most recent was a September 14 issue by MLS Informatics, which drew 6 million euros for its investment program.
The domestic corporate bonds market, which started in May 2016, offers an alternative solution to investors who are disappointed by their portfolios’ losses, given that the interest rates that bond issues offer are much higher than those for bank deposits. Of course investors should beware because corporate bond yields are never guaranteed, as companies may face negative developments, reversing their bonds’ positive course.