Germany stands at an interesting juncture. Chancellor Angela Merkel has impressed with her time in office so far, but the honeymoon is over and she now needs to tackle pressing economic reforms that will once again put Germany on a growth trajectory and reduce unemployment levels of close to four million. Business confidence is slowly picking up as companies, rehabilitated after years of balance sheet restructuring and deleveraging, are looking once again at acquisition opportunities to boost ou

The outstanding value of structured products held by German retail investors is estimated to exceed €80bn. For the most part, such products are issued as certificates – essentially debt securities issued by banks that provide synthetic exposure to any underlying asset class – a format that provides tax breaks for the investor if the certificate is held for a qualifying period. The tax breaks are an added plus for investors, but would not be sufficient to sustain such large volumes on their own.

There were fewer jumbo deals and a higher proportion of deals between €500 and €1bn in 2005. Excluding real estate portfolio transactions, this trend was even more obvious. “In the first months of 2006 the number of both large and mid-sized deals has been lower, although the transaction services teams at the large accountancy firms are very busy on the due diligence and spin-off advisory sides “, said Jochen Koenig, managing director and head of leveraged finance Germany at RBS. “I am very optim

Banks are actively marketing mezzanine finance and quasi-equity to their Mittelstand clients. And there is also plenty of demand for Schuldscheine, a quasi-capital markets product for unrated companies or those without direct access to the bond market. In addition, asset-backed commercial paper (ABCP) conduits are increasingly being used by companies that generate stable flows of trade receivables with top-quality customers. Companies at the very top end of the Mittelstand may be forging links w

After years of getting their balance sheets in order, German companies are now sufficiently emboldened to pursue acquisitions and they have foreign companies in their sights. And with the European loan market so liquid – not to mention cheap – it is little wonder that this acquisition frenzy is bringing billions of euros of loan paper to market. "Companies in various industry sectors are in good shape and have trimmed down their balance sheets," said Dietmar Stuhrmann, head of loan syndicate EME

Speaking at the March 2006 European Securitisation Forum conference in Venice, Fitch Ratings' Stefan Bund noted that overall German structured finance volume had quadrupled last year compared to 2004, and that he expected this rate to continue into 2006. A swathe of multi-family home deals are in the pipeline, and if all goes according to plan, 2006 could see as much as €10bn of multi-family unit issuance. Deutsche Bank research suggests that since the year 2000, 32 entities have sold a total of

Recent news that AHBR is to buy back four of its mortgage-backed pfandbriefe is only the latest evidence of the shrinking German jumbo covered bond market, though for those who were skilled enough to short such issues at the right time, trading the asset class remains lucrative. At one point, AHBR's pfandbriefe had been trading around the mid swaps plus 30bp area, but they have since tightened to low single digits with the buy-back level of plus 2bp seen as a fair. Apart from AHBR's restructurin

Prior to 2005, Germany had not been a major source of ECM volumes for years. The amount of work banks put in to make this happen should not be underestimated, given that deals had not always received an easy ride and investors had not always made money. But with a much stronger performance in 2005, volumes look set to rise for the fourth consecutive year. The absence from the market of KfW, the German privatisation agency, makes these achievements even more significant. Not all companies have ha

German banks have traditionally had the small and mid-cap sector all to themselves, as long as international banks have only been interested in banking big-ticket clients. But with each passing year, the domestic banks' inbuilt local advantage is eroding as international banks aggressively court more clients. In ECM, Credit Suisse was joint bookrunner on the €49.6m IPO of biotech Jerini, while Morgan Stanley ran the books on the €83.2m flotation of gaming company Tipp24. The appearance of intern

Following a lengthy period of restructuring, corporate Germany is looking healthy again. Larger companies, which have spent the last few years restructuring their balance sheets and divesting non-core assets, are at last returning to the acquisition trail amid growing business confidence. Where corporate expansion has taken place, boardrooms have been quick to take advantage of the greater flexibility offered by the EU accession countries and other emerging economies to keep wages and other cost