In recent years, many Italian companies have discovered a new financing opportunity to support their growth projects: minibonds. These financial instruments, designed for small and medium-sized enterprises (SMEs), represent a valid alternative to traditional bank credit channels. But how exactly does the minibond issuing process work? Here is a detailed guide for companies that want to explore this possibility.
What is a minibond?
A minibond is a medium- to long-term debt security issued by an SME to raise capital directly from investors. Unlike traditional bonds issued by large companies, minibonds are designed for smaller companies and offer direct access to the capital market.
The advantages of minibonds
- Diversification of financing sources: Companies should not depend exclusively on bank financing.
- Increased visibility: Issuing minibonds can increase the company's visibility among institutional investors and the public.
- Flexible conditions: The issuing conditions can be adapted to the specific needs of the company.
- Growth support: Funds raised can be used for expansion projects, R&D investments, acquisitions, etc.
The minibond issuance process
1. Preliminary Assessment
The first step in issuing a minibond is an internal evaluation to determine the amount of capital needed and the purpose of the financing. It is essential that the company has a clear and detailed business plan that justifies the minibond issue.
2. Choice of consultant
SMEs need to rely on experienced minibond financial advisors to guide them through the entire process. These professionals help in structuring the transaction, preparing the necessary documentation and managing investor relations.
3. Due diligence
The due diligence phase is crucial. A team of experts analyses in detail the company's financial situation, its business model, sector and future prospects. This process is essential to ensure the transparency and reliability of the transaction in the eyes of investors.
4. Structuring the minibond
After due diligence, we move on to the structuring of the minibond. This includes defining the main characteristics of the security, such as the duration, interest rate, repayment terms and any guarantee clauses. It is important that these terms are balanced and attractive to investors.
5. Drafting the prospectus
The prospectus is a fundamental document that describes in detail the transaction, the issuing company, the associated risks and how to subscribe. This document must be drawn up accurately and transparently, following the regulations in force.
6. Marketing and roadshows
Once the prospectus is ready, the company begins the marketing phase to promote the minibond issue among investors. Often, roadshows are organised, i.e. meetings with potential investors to present the transaction and answer their questions.
7. Issuance and placement
On the day of issue, minibonds are offered to investors through a trading platform, such as the ExtraMOT PRO segment of Borsa Italiana. The placement can be public or private, depending on the characteristics of the transaction and the regulations in force.
8. Post-issue
After issuance, the company must maintain transparent communication with investors, providing regular updates on the financial performance and progress of projects financed with minibonds. This is essential to maintain investor confidence and ensure the long-term success of the transaction.
Conclusions
The issuance of minibonds represents a significant opportunity for Italian SMEs to finance their growth projects in an innovative and flexible way. However, it is a process that requires preparation, transparency and the support of experienced advisors. If your company is interested in exploring this possibility, it is crucial to start with a thorough assessment of its financial needs and the opportunities offered by the minibond market.
For more information or a personalised consultation, please do not hesitate to contact our experts.