The latest high-yield issue under the new German Bond Act
adopts an issuer-friendly structure that calls into question
the preference for second-lien over unsecured debt.
It also marks the opening of the market for the
country’s mittelstand (small and mid-sized
companies) – a mainstay of the German economy.
Robotics manufacturer Kuka’s €202
million second-lien offering, the first of its kind under the
2009 Act, is part of a larger refinancing that includes
a €200 million syndicated senior loan.
The relatively small issue amount and its sale outside the
prospectus directive, combined with the comfort of domestic
law, shows these companies are no longer priced nor sized-out
of the high-yield market.
"It could be one of these landmarks that show that mid-sized
companies with a sub-investment grade rating like Kuka...