Minibonds and basket bonds: what do they are?

Minibonds are debt securities under 500 million euros that can be issued by SMEs, (excluding banks and micro-enterprises) to access to funding resources without recurring to bank credit and without providing collateral.

Like any kind of financial obligation, minibonds grant investors an interest rate, paid through fixed-rate or floating-rate coupons. The principal can be refunded at the maturity or amortized over the life of the bond.

The Campania Region aims at encouraging the use of this financing instrument among local SMEs through a basket bond project of 148 million euros. A basket bond is a portfolio that collects the issues of minibonds of a group of companies, in order to represent an asset of some interest to investors. 

How does Garanzia Campania Bond work

Garanzia Campania Bond is the first basket bond operation backed by public guarantee.

Generally, the issuance of minibonds is secured by collaterals or personal guarantee, which reassure investors allowing companies to obtain financing at competitive economic conditions. 

The Campania Region provides a public guarantee of 37 million euros, which will cover 100% of the losses up to 25% of the portfolio.

The value of each issue will be determined according to the requests of the selected companies, but the average amount should not exceed 3 million euros (with a tolerance of 20%). The role of the Arranger will be played by Banca FISG.

To participate in the basket bond operation, you just need:

• to be an Italian SME headquartered in the Campania Region;

• got a rating of at least BB- issued by Credit Rating Agency registered by ESMA and recognized as ECAI.

The credit rating

A credit rating provides a declaration of reliability of the issuer, reassuring investors on the probability of losses.

An application may also be made submitted without a rating if the following conditions are met:

• to have not incurred losses in more than one of the last 3 years
• to have achieved sales revenues for at least 10 million euros in the last financial year
• Net debt / EBITDA < 5x
• Net debt / Shareholders' equity < 3x
• EBITDA / Sales > 4%.

Once the application has been submitted, the arranger will porpose the company a Credit Rating Agency.

Thanks to its AI-based rating methodology, modefinance has been chosen as main partner of the project for rating costs up to 83% below the market price. 

Check the credit score on s-peek

Before applying for a rating, you can check on s-peek the credit score assigned to your company.

A credit score is a credit assessment based on the company’s financial data.

In s-peek, the credit score is calculated through the MORE methodology developed by modefinance. 

To know your company's credit score, just download on s-peek the FLASH report of your company or purchase the Extend12M report, which provides, together with the credit score and the credit risk analysis, the balance sheet data of the last three years.

More information on the website of Garanzia Campania Bond.