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Pareto Securities Marks a Year of Success in High Yield Bond Markets Amidst Global Economic Headwinds

Pareto Securities Marks a Year of Success in High Yield Bond Markets Amidst Global Economic Headwinds

Frankfurt, January 30, 2024. As 2023 draws to a close, the Nordic High Yield (HY) market underscores both resilience and its pivotal role for German issuers. Amidst geopolitical tensions and an uncertain economic and inflation outlook, the Nordic Bond format gained significant traction in the German market, achieving a primary market volume of EUR 615 million in 2023. The overall Nordic HY market exhibited exceptional growth, with a 53% increase compared to the previous year and concluded the period with a total issued volume of EUR 9.1 billion (2022: EUR 6.0 billion).

The ongoing integration of the Nordic Bond format into the German market was particularly noteworthy. German issuers have increasingly opted for this approach, recognizing its flexibility and efficiency, particularly in response to the demands of the current economic climate. This strategic pivot has resulted in a historic number of six German issuers choosing Nordic Bond documentation.  It underscores a transformative year where the traditional German SME bond market (“Mittelstandanleiheformat”) faced further decline, and the Nordic Bond model rose to prominence.

Notable among the transactions in Germany was the issuance of a EUR 100 million secured bond by Mutares SE & Co. KGaA, followed by a EUR 50 million tap issue. Additionally, the German confectionery manufacturer Katjes International managed a successful refinancing with an unsecured EUR 115 million senior bond in the Nordic format.

This remarkable growth has been Pareto’s playground, where it not only sustained but bolstered its leading position in 2023 with a steadfast 32% (2022: 29%) market share in the overall Nordic HY, a 57% (2022: 48%) share for Euro-denominated Nordic HY bonds, and a 55% (2022: 54%) share for private equity-backed transactions.

Lutz Weiler, CEO of Pareto Securities Germany, reflects on the year’s achievements: “2023 was a testament to the robustness and agility of the Nordic HY Bond format, particularly within the German mid-market. Our clients have not only adapted to but thrived in a challenging economic landscape, leveraging the flexibility of the Nordic structure. We’re proud to have facilitated this market evolution and to have empowered our clients to achieve their financial objectives.”

In a year marked by global financial turbulence, Pareto’s strategic insights and strong market presence have been central to its clients’ successes. As Pareto looks ahead to 2024, it remains dedicated to harnessing its market expertise to drive growth and deliver value in an ever-changing financial environment.

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.