Pareto Securities AS
Pareto Securities strengthens its market leadership in the first half of 2023

Pareto Securities strengthens its market leadership in the first half of 2023

Frankfurt, August 1, 2023. Pareto Securities AS, an international investment bank headquartered in Oslo and a long-standing partner to the mid-market in Scandinavia and Germany, once again expanded its leading position in the Nordic High Yield Bond market in the first half of 2023. In the first six months of 2023, Pareto arranged or advised on 37 debt transactions with a total volume of EUR 3.7 billion.

From January to June 2023 the Nordic High Yield Bond market regained momentum despite the continued volatile market backdrop. The primary volume in the Nordic Bond segment recorded an increase of 37% compared to the same period of the previous year. In the first six months of 2023, Nordic High Yield Bonds with a volume of EUR 5.1 billion were priced, thereof EUR 3.3 billion in the first quarter of 2023 and EUR 1.8 billion in the second quarter of 2023. Up to and including July, primary volumes in 2023 are already roughly on a par with the full year 2022 at EUR 6.0 billion.
A key volume driver in the reporting period was the EUR 750 million Nordic High Yield Bond for the acquisition financing of Scan Global Logistics by private equity firm CVC Partners, which was arranged by Pareto on a sole basis and represents the largest transaction in the Nordic High Yield Bond market to date.

Nordic High Yield Bonds continued to be an attractive financing instrument for issuers outside the Nordic countries, representing a total of 30% of primary volume in the first half of 2023. The DACH region was predominantly represented with seven primary market transactions and a volume of EUR 0.7 billion. These included a Nordic High Yield Bond with a volume of EUR 225 million for the Swedish-German gaming and advertising software company Media & Games Invest as well as a bond with a volume of EUR 200 million for Media Central, held by Bregal Unternehmerkapital, to finance the acquisition of ShopFully. Other notable transactions included a EUR 150 million bond for turnaround investor Mutares, a EUR 50 million bond for Orlando Capital-backed Secop, a EUR 50 million transaction for DEAG Deutsche Entertainment AG and a EUR 50 million bond for Hörmann Industries. Pareto was involved in six of these seven transactions.

In the German SME bond market (“Mittelstandsanleiheformat”), only five primary transactions with a total volume of EUR 33 million were completed in the first half of 2023. This represents less than 1% of the Nordic High Yield market in the first six months of 2023. This development resulted predominantly from an absence of real estate transactions, which had been a key driver for German SME bond activity in previous years. At the same time, a switch of traditional German SME bond issuers to the Nordic High Yield Bond market, such as DEAG in the second quarter of 2023, was recorded. Furthermore, the announced liquidation of the Deutsche Mittelstandsanleihe Fonds had a dampening effect on the demand side.

Lutz Weiler, CEO Pareto Securities Germany, comments: “After a positive start to the year in the Nordic High Yield market, we saw a brief slowdown in market sentiment, not least due to the impact of the regional banking crisis in the US and the forced takeover of Credit Suisse. Despite this challenging market environment, we again impressively succeeded in further expanding our market share. This underlines our capabilities in structuring and placing transactions, even in volatile markets. We are pleased that this is also confirmed by the latest Prospera 2023 ranking of Nordic DCM High Yield managers, in which Pareto was voted number one by issuers. In addition, more and more issuers outside the Nordic countries are recognising the attractiveness of the Nordic Bond format, which has proven itself even in challenging market phases, while at the same time convincing with its key advantages as an adequate financing format in the capital market.”

 

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.