Corporate Financing Trends in Germany: Midsize Companies Navigate a Shifting Sea (Boston Consulting Group)

Summary

• BCG surveyed 63 restructuring experts on the financing of German midsize companies.§1
• In refinancing situations BCG supported, 78% relied on commercial banks, 41% used bank guarantees, 34% shareholder loans and 16% SME bonds.§3
• 73% of respondents believe the relevance of traditional bank financing will decline over the next three to five years.§3
• 76% expect PE and PD financing to grow significantly, and 76% expect fintech financing to grow.§3
• PE involvement in BCG's own refinancing cases is up by 14 percentage points over three years, to 44%.§5
• Global distressed private debt volume reached $222 billion in 2017, growing an average of 5.6% each year.§6
• A record €29 billion of SSDs was issued in Germany in 2017, almost four times the volume in 2013.§8

Key insights

1. German price-adjusted GDP increased 2.2% in 2017, slightly below the EU average of 2.4%.§2
2. The 600 largest companies in Germany, Austria, and Switzerland achieved annual growth of 2.5% in revenues and 6.3% in EBIT from 2013 to 2017.§2
3. Global PD volume increased by 9.8% annually from 2012 to 2017, from a baseline of $400 billion.§6
4. Online fintech lenders provide loan volumes in most cases ranging from €0.1 million to €5 million.§7
5. Landesbank Baden-Württemberg worked with Daimler to launch a one-year SSD using blockchain, providing around €100 million.§7
6. The last standard mezzanine program expired in 2014.§8
7. The ECB's guidance on nonperforming loans was issued in March 2017 to encourage banks to reduce problem credits.§4
8. More than half of surveyed experts consider diverging interests of new stakeholders to be a leading generator of restructuring complexity.§9