Recovery in the SME Bond Market: Significant Growth in 2024

The German SME bond market showed signs of recovery in the first half of 2024, as revealed by an IR.on AG study. Volume placed in 11 issues reached EUR 405 million, marking a 43% increase compared to the previous year. The average coupon saw a minor rise to 8.87% p.a.

Notably, bonds from the energy sector were most prominent for the third consecutive year. Defaulted volume was minimal at EUR 5.74 million. However, SME bond issuers underperformed in the IR.score due to more first-time issues and private placements.

Full placements dropped slightly compared to 2023, with five fully subscribed bonds. The market stayed receptive, especially in a challenging capital environment, underscoring the strength of capital market-oriented SMEs.

Despite fewer restructurings, the affected bond volume increased. Analysts expect issuing activity to remain stable throughout 2024, following trends from the first half of the year.