Commentary SMEs

SME bonds

Investors are kept waiting for ratings

The recent headline made pleasant reading. Standard & Poor’s announced that in future they were also planning to rate small and medium-sized enterprises and their bonds. However: the Americans do not dare to venture into the booming market for stock-market-listed SME bonds. They only plan to examine private placements. In consequence the results will not be published and will only be made available to a limited group of investors or lenders. There is a substantial need for this service, too, because SMEs in particular find difficulty in obtaining finance. This is due to tighter bank regulation as well as issuers failing to satisfy the standards of the capital market.

But from the investor’s point of view it would be desirable for independent ratings to become available as soon as possible for market-listed SME bonds, too. This would involve higher costs for the companies. But if the SME bond issuing machinery, which is currently powering ahead at full steam, is not to grind to a halt, greater transparency and information for investors is needed. And this is ultimately also in the interests of the issuers