BankM AG
BankM AG: Paving the way for government-guaranteed bonds, issued by German SMEs – First application submitted to WSF

Press release

BankM AG: Paving the way for government-guaranteed bonds, issued by German SMEs – First application submitted to WSF

– Alternative to financing through banking debt and KfW-programs

– Further applications in the process of final processing and submission

– Target coupon of 4 to 5 percent p.a. including government guarantee
 

Frankfurt, 15 December 2020 – BankM AG supports a number of medium-sized companies in applying for a support measure from the Economic Stabilisation Fund (WSF). The first application for the standard product “Guarantees for Bonds” was submitted last Friday and is one of the first ever in this segment. BankM advised the applicant on the preparation of the documents and, in particular, drew up the planned financing structure. Luther Rechtsanwaltsgesellschaft mbH provided legal support. The application is for a direct 90% state guarantee for a bond with a volume of up to EUR 28 million; the funds are to be used in particular for working capital to finance the orders in hand.

With sales of around EUR 100 million in fiscal 2019, the applicant is temporarily struggling with declining sales and earnings due to the Corona pandemic. However, the order situation is positive and in the medium term, there are various market opportunities that now need to be pre-financed. Despite the good prospects for continuation, banks are not prepared to expand their exposure or grant new loans in the current situation. This confirms the general observation that most banks are currently placing a clear focus on risk management in their corporate customer business and are reassessing even long-standing customer relationships from a portfolio perspective.

BankM has therefore been working since the beginning of the Corona crisis to ensure that the capital market is included in government support measures for companies. The WSF launched in March is a EUR 600 billion federal aid program with the explicit aim of supporting refinancing via the capital market and mitigating the economic impact of the pandemic on Germany as a business location and labor market.

Initially, however, the fund only provided guarantees for bonds with a volume of more than EUR 100 million. At the end of October, the fund expanded its range of instruments to include bond guarantees of EUR 5 million or more. This opens up the program to large sections of the upper middle market. Companies are thus no longer dependent on the goodwill of their principal banks, but can be introduced to the capital market by issuing bonds with a WSF guarantee and build up a track record that enables follow-up financing that is independent of banks and largely resistant to crises.

“From the very beginning, we have worked in dialog with policymakers and companies to push through the WSF in its original form as a bank-independent program for crisis management for the broad SME sector. As one of the first applicants for the standard product “Guarantees for Bonds”, we now want to work together with our client to develop a standard that takes the needs of companies, capital market investors and taxpayers into account in the best possible way. As an experienced capital market partner of medium-sized companies and one of the leading issuing agents in the SME bond segment, BankM guarantees application and placement from a single source, thus ensuring fast and efficient implementation,” says BankM board member Thomas Stewens.

About BankM AG:

Since 2007, BankM AG (Frankfurt am Main, Germany) is the partner of small and medium-sized enterprises and specializing in capital market financing with its experienced, interdisciplinary team. SME customers benefit from individual service and rapid access to selected investors that fit their needs. BankM’s services include capital market advisory, arranging IPOs and capital increases for equity financing, debt advisory and debt capital mediation, designated sponsoring and research as well as M&A, hereby specializing in the identification of suitable strategic partners in China.

Contact:

Thomas Stewens
BankM AG
Mainzer Landstraße 61
60329 Frankfurt
Germany
Phone: +49 (0) 69 71 91 838-10
Fax: +49 (0) 69 71 91 838-50
Email: pr@bankm.de
Internet: www.bankm.de

Legal notice:

This announcement does not constitute a recommendation or an offer or a solicitation of an offer for the purchase, sale or subscription of any mentioned securities. It does not serve any investment advice but general information purposes only.