Non-bank lending to mid-size firms in Europe: evidence from corporate securities

Olivier Darmouni and Melina Papoutsi

No 2663, Working Paper Series from European Central Bank

Abstract: Using newly available micro-data, this paper documents new evidence on the rise of nonbank credit to mid-size firms in the euro area. Recent new issuers of debt securities are typically small, private, and unrated. Their spreads are comparable to high-yield bonds. Traditional “buy-and-hold” investors are small for unrated and smaller issuers, while nonbank intermediaries are large. These non-bank intermediaries were however as stabilizing as insurers during the March 2020 turmoil. Nevertheless, the subsequent bond issuance wave was restricted to large and rated firms. This market thus more closely resembles “private debt” markets than the traditional bond market. JEL Classification: G21, G32, E44

Keywords: bond markets; financial fragility; Non-bank lending; private debt (search for similar items in EconPapers)
Date: 2022-05
New Economics Papers: this item is included in nep-cfn, nep-eec, nep-fdg, nep-fmk and nep-mac
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Citations: View citations in EconPapers (12)

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Persistent link: https://EconPapers.repec.org/RePEc:ecb:ecbwps:20222663

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