Deutsche Börse plans new premium segment for corporate bonds Alternative financing for larger listed and unlisted companies

21 November 2011

As of 2012, companies will be able to float bonds on the Prime Standard of the Frankfurt Stock Exchange. The new segment will provide cost-effective access to private and institutional investors on the primary market and liquidity and transparency on the secondary market. The Prime Standard for corporate bonds is aimed at larger listed and non-listed companies that wish to place an issue volume of over €100 million.

“The Prime Standard for corporate bonds systematically expands our range in the area of debt financing in addition to equity financing for also larger companies,” said Alexander Höptner, Head of Markets Services at Deutsche Börse.
“After successfully introducing the Entry Standard for bonds in February, this new segment is the logical extension for issuers that orient themselves towards the conventions of institutional issues, tap new investor groups with liquid trading and at the same time exhibit a high level of transparency.”

The Prime Standard for corporate bonds provides a fixed allocation ratio of at least 10 percent of each bond for private investors. Investors placing an order size of less than €25,000 count as private investors. The denomination of the securities is set at €1,000. There are two flexible ways to enter the new segment: via the regulated market or the Open Market. Large, unlisted and family-run companies in particular will benefit from an alternative entry route to the new segment via the Open Market.

In contrast to the Entry Standard for bonds which is aimed at SMEs, the issuers in the premium segment have to meet higher transparency standards and more extensive follow-up requirements. These include publishing a total of 24 key company figures (Entry Standard for corporate bonds: 6 key figures) and holding an annual analysts' conference for credit investors.

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