Session timeout

Sorry, your session timed out after a long time of inactivity. Please click OK and Sign In again.


Exploring the international appeal of Schuldschein

Commerzbank Corporates & Markets examines the international attractions of Germany’s private placement solution, and it's potential role in financing CEE corporate requirements.


By Penelope Smith, Director, ILO, Debt Capital Markets Loans, Commerzbank Corporates & Markets

Schuldscheindarlehen – a private placement based on German law (literally in English ‘certificates of indebtedness’) – has been used to fund Germany’s industrial ‘mittelstand’ heartland for centuries and is now expanding internationally.  The last few years have seen issuance from corporates in amongst other countries, France, UK, Spain and even Brazil.  The CEE market however seems to remain impervious to the product’s charms.

Schuldschein appeal most to midcaps, but sometimes to larger companies also. A formal rating is not needed but a clear and strong credit story is essential, with most transactions sitting in the implied BBB+ to BB+ space. They offer flexibility, allowing multi-tenor and various currency and interest structures all in one issue. The norm is for deals of EUR100- 300m although benchmark size have been seen and the debt is fully drawn. One of the biggest attractions compared to other capital market products is that a floating rate Schuldschein can be prepaid at par on interest dates.

The Schuldschein document is simple and straightforward – running to around 30-40 pages and outside Germany financial covenants are the norm.  No listing is required and no prospectus.  Over the last year we have increasingly seen the Schuldschein become a “take-out” option for acquisition finance and have seen the emergence of the green Schuldschein but often they are used for general purposes or requirements such as capex.

Pricing tends to sit between syndicated loans and public bonds, as investors are non-relationship with no other business opportunities, and perhaps this is a reason why CEE has been hesitant given how aggressively banks are prepared to lend in the loan market right now.  For investors, Schuldschein can provide the opportunity to invest in companies where the lack of an existing relationship would otherwise make it impossible and we do see CEE investors beginning to take more notice of the product. 
We see considerable opportunities for CEE borrowers and investors to participate in this exciting growing market, and believe the Schuldschein has a role to play in financing CEE corporate requirements.

*Source: Thomson Reuters

Penelope will be speaking at the upcoming 13th Annual Syndicated Loans Conference, being held on 28th & 29th November 2016 in Vienna.   To hear more from her and our lineup of fantastic industry leading speakers, you can secure your place here or email us at

This content is provided by Euromoney Seminars for informational purposes only, and it reflects the market and industry conditions and presenter’s opinions and affiliations available at the time of the presentation.