Vienna enhances corporate bond offering

Vienna Stock Exchange has extended its bond market with a new segment for prime corporate bonds, offering enhanced transparency.

Vienna Stock Exchange has extended its bond market with a new segment for prime corporate bonds, offering enhanced transparency.

Bond issuers operating in the corporates prime segment will need to comply with more stringent reporting requirements intended to benefit private investors in particular. Reporting rules include disclosure of certain earnings indicators, submitting financial statements and ratings updates to the exchange in a timely manner.

In addition to the reporting requirements, corporate bonds must meet certain criteria, with placements accompanies by a listing prospectus and denominations not exceeding €10,000 and a minimum issuing volume of €5 million.

Vienna said the extension was made due to expansion in Austria’s domestic corporate bonds market. Last year, 29 new corporate bonds were issued in Austria, with capital increases worth €5.5 billion.

So far this year, 19 new corporate bonds have been issued on the Vienna Stock Exchange, bringing the total to 146.

Birgit Kuras, management board member of the exchange, 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 does not give any indication of the creditworthiness of the issuer.”

Corporates prime issuers will also receive dedicated space on the Vienna Stock Exchange website to make bond-relevant information available. It currently consists of 21 bonds with nine issuers.

Corporate bond trading has taken off in Central Europe in recent years, with the Warsaw Stock Exchange in Poland today celebrating four years of operating its bond market platform Catalyst. It has attracted significant interest, with value of bonds listed increasing by 20% between August 2012 and August 2013 to PLN58.7 billion.

Catalyst also aims to make bond investment more transparent and secure to increase market confidence.

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