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Pareto Securities further extended its leadership position on record activity in the Nordic HY bond market in Q1 2024

Pareto Securities further extended its leadership position on record activity in the Nordic HY bond market in Q1 2024

Frankfurt, April 19, 2024. The Nordic High-Yield Bond market started strong in 2024, with several significant transactions closing in the first quarter and setting a new record for activity. The total value of transactions reached EUR 4.6bn, with a total of 47 transactions completed. This performance mirrors the growth seen in the wider European and US high yield markets. Amidst this buoyant atmosphere, German issuers also capitalized on the favorable market conditions offered by the Nordic Bond format. In total four German issuers were able to seize their opportunity, setting a new record for Q1. Capitalizing on this tailwind, Pareto Securities further expanded its leadership position in the Nordic HY Bond market in Q1 2024, with a market share of 31% in the overall market, a 66% market share in EUR-denominated Nordic HY bonds, and a 66% market share for private equity-backed transactions.

Nordic HY bonds have commenced the year with vigor, bolstered by sustained positive net inflows into Nordic high-yield funds and a prolonged period of market stability devoid of significant geopolitical surprises. Simultaneously, companies have demonstrated resilience in their earnings, resulting in a record-breaking 25 transactions occurring solely in March within the Nordic High-Yield Market. This favorable environment has been effectively leveraged by both new entrants and established issuers for refinancing purposes, resulting in the first quarter marking the most active period ever, with a total placed volume of EUR 4.6bn – a 38% surge compared to Q1 2023.

The development in the mid-sized bond focused Nordic High Yield market was in line with its mostly benchmark size driven European and American counterparts. Both witnessed robust growth rates compared to the previous year’s Q1. For instance, the European HY market gained over 119% in volume, closing Q1 2024 at EUR 28bn. Similarly, the US HY market experienced growth rates of 110% compared to the same period twelve months prior, concluding Q1 2024 at USD 84bn, reflecting the globally favorable market conditions.

German Nordic Bond issuers surged with activity in Q1 2024 from the outset
Investment holding Mutares capitalized on its market track record with a EUR 100m tap issue in January, fully utilizing its EUR 250m bond frame. Subsequently, LifeFit Group continued its growth agenda, funding the acquisition of 19 additional fitness clubs in Germany through a EUR 12m tap issue. March saw LR Health & Beauty SE successfully refinancing its outstanding EUR 125m with a EUR 130m bond, while SLR Group, backed by private equity firm Orlando Capital and specializing in the production of spheroidal graphite iron components, debuted with a EUR 75m issuance. Pareto Securities acted as sole or joint bookrunner in all these transactions. Outside the Nordic Bond format, however, the German SME bond market witnessed marginal activity in the first quarter of 2024.

Christian Czaya, Head of Fixed Income Sales Germany and designated CEO of Pareto Securities Germany: “Thanks to our in-depth market knowledge and the flexibility of the Nordic format, we were able to achieve excellent results for our clients even in a challenging 2023. The strong start into 2024 with four successful issues in Q1 confirms that now more and more companies are becoming aware of the benefits of Nordic bonds. As the market leader with decades of experience, we at Pareto want to take advantage of this momentum and support companies with our financing solutions.”

To access the newsletter on the Nordic HY Bond market, please follow this link.

About Pareto Securities 
Founded in 1986, Pareto Securities is headquartered in Norway and has offices in Denmark, Finland, Sweden, Germany, the UK, Switzerland, the US, Singapore, and Australia. Pareto Securities has a leading position in the Nordic financial markets and a strong international presence. Pareto Securities offers a wide range of financial services, including equity and fixed income brokerage, equity, debt and project finance, and advisory services related to mergers and acquisitions and restructuring.