The Vienna Stock Exchange is enlarging its market for corporate bonds and will operate a new segment – corporates prime.
This new premium segment for bonds is designed to enhance transparency – benefitting especially private investors – as issuers agree to comply with more stringent reporting requirements. Furthermore, the new segment will only include bonds that meet certain criteria: the placement needs to be accompanied by a listing prospectus, the bond denomination cannot exceed EUR 10,000 and the minimum issuing volume is EUR 5 million.
Birgit Kuras management board member Wiener Börse AG said: "By introducing the corporates prime segment we want to make it easier for private investors to thoroughly research companies and thus make informed investment decisions. However, the new segment dokes not give any indication of the creditworthiness of the issuer."
Issuers that want to list their corporate bonds on the new corporates prime segment enter into an agreement under which they agree to comply with stricter transparency obligations, such as the disclosure of certain earnings indicators and a brief profile. During the bond duration, the issuer must submit financial statements, key indicators and any rating updates to the Vienna Stock Exchange without delay.
The Vienna Stock Exchange will also provide corporate prime issuers with more space on its website and make specific bond-relevant corporate ratios, company information and the listing prospectus available for download for the entire duration of the bond. The new segment is already being very well received by issuers – the corporate prime segment will start with 21 bonds and nine issuers.
The domestic market for corporate bonds has been expanding for the past three years and, after the record year 2012 with 29 new corporate bonds and a capital increase with an overall volume of over EUR 5.5 billion, it continues to boom.
In 2013 there were nineteen new corporate bonds on the Vienna Stock Exchange and three capital increases with a total volume of over EUR 4 billion. There are 146 corporate bonds currently listed on the Vienna Stock Exchange.