FCF
Interest & Corporate Loan Monitor

FCF regularly conducts comprehensive research regarding the German corporate loan and interest market, based on publically available information. The results are updated and published quarterly in the

FCF INTEREST & CORPORATE LOAN MONITOR

The FCF Interest and Corporate Loan Monitor provides valuable information regarding the prevailing macro-economic environment as well as the corporates loan and bank markets and covers the following topics:

  • macro-economic environment
  • currently prevailing interest rate environment
  • current developments of credit margins
  • behavior of the bank within the corporate loan market

The most important insights of the acurrent issue:

The interest rate-turnaround has now occurred – after four decades of declining interest rates
    • The average interest rates for corporate loans in Germany ("loan interest rates") across all sectors and rating classes had reached a peak of well over 10% in the early 1980s, which was followed by almost 40 years of declining interest rates (down to approx. 1%) until 2016
    • From 2016 to 2022, i.e. for a period of almost 6 years, interest rates have been fluctuating around the historic low of approx. 1.0% to 1.5% and have hence bottomed-out in the long-term view
    • Since the beginning of 2022, an initially moderate but in the second quarter 2022 increasingly rapid rise in loan interest rates to 2.5%+ in June 2022 could be observed, driven by high inflation rates in Germany, the eurozone and the US, as well as windfall profits for the lending banks (e.g. higher credit margins)
    • In July 2022 the increase in interest rates decelerated, loan interest rates even slightly decreased to 2.0%
    • Recent interest rates hikes have been dramatic, with increases of more than 250% in Q2/2022. Despite the small temporary decrease in the last four weeks, a further increase in interest rates is expected due to the high inflation and additional indicated hikes in key interest rates. Companies already have to pay the highest interest rates for the last 8 years for new loan financing
Current financing environment is still positive
    • Historically – viewed over a 40-year period – interest rates are currently still at a very low level, albeit with an upward trend
    • Banks even expect further improving lending terms & conditions for Q3/2022
      • however, the development of lending terms & conditions during the last few quarters dropped short of the banks' positive expectations
      • Empirical observations and feedback by companies in the market show both increasing reference interest rates as well as credit margins; further terms & conditions (e.g. maturity, covenants, securities, etc.) appear to be stable to slightly stricter
    • During the past twelve months, especially the foreign banks (after a temporary reduction) and Sparkassen have once again expanded their lending volumes, while the other banking groups have already started to become more cautious; mortgage banks already decreased new lending
    • The banking market is currently still very receptive to new financing with comparatively beneficial terms & conditions – especially for companies with high credit ratings (e.g. Investment Grade). However, this window could close rather fast over the next few months, particularly for companies with lower ratings in the non-investment grade "BB"-range and below
Macroeconomic data point to further interest rate hike(s)
    • At over 8%, inflation in Germany is as high as it was in the early 1980s, and the core inflation rate (excluding energy and food) is currently at 3.2%, well above ECB's inflation target of 2%
    • In the eurozone the harmonized consumer price index is also at 8.6% and the core inflation rate is now at 3.7%, which is significantly higher than in Germany and also well above ECB's inflation target of 2%
    • In all 19 countries of the eurozone, inflation is currently well above ECB's inflation target of 2%
    • In the US, inflation has now risen to over 9%, the FED announced interest rate hikes at the end of January 2022 and has meanwhile already raised the key interest rate four times by a total of 2.25%
    • Despite the key interest rate hike of 0.5% in July 2022, the ECB will not be able to avoid further interest rate hikes in the short term. The bond purchase program has already been reduced and additional key interest rate hikes have been implicitly announced. The expected new indebtedness of Germany (and other EU countries) in connection with the Corona and Ukraine crises indicate additional short to medium-term interest rate increases

SMALLCAP / MIDCAP RESEARCH SERIES

The FCF SmallCap / MidCap research reports are periodically updated and cover eight specific sectors as well as certain general capital market developments. Based on the data of publicly listed European corporates, the respective sector and market are individually analyzed. Our systematic analyses include information to, amongst others:

Sector Research

Automotive Supplier Market Study
Research on the automotive supplier sector based on available data from European automotive suppliers.

European Chemicals Market Study
Research on the chemicals sector based on available data from European chemical companies.

Forestry Paper and Packaging Market Study Cover GenericForestry, Paper and Packaging Market Study Research on the forestry, paper and packaging sector based on available data from European forestry, paper and packaging companies.

Industrial Machinery Market Study
Research on the industrial machinery sector based on available data from European industrial machinery companies.

Metals and Materials Market Study CoverMetals & Materials Market Study
Research on the metals & materials sector based on available data from European metals & materials producers.

Logistics & Transportation Market Study
Research on the logistics and transport sector based on publicly available data from European logistics and transportation providers.

European Infrastructure & Construction Market Study
Research on the logistics and transport sector based on publicly available data from European logistics and transportation providers.

Pharmaceutical Market Study CoverEuropean Pharmaceutical Market Study
Research on the pharma sector based on available data from European pharma companies.

Pharmaceutical Market Study CoverTMT Market Study
Research on the TMT sector based on available data from European TMT companies.

Market Research

The FCF market research covers e.g. fundamental analysis of interest rate and margin development in the German corporate lending / debt market, development of the rating and credit standing of banks addressing the German MidCap corporate lending market, etc.

Bank Monitor
Analysis of the historic and current spreads of credit default swaps for banks most active in the German corporate lending market.

IPO Market Monitor
Providing relevant valuation metrics (e.g. ratios, multiples), general information and performance data of European IPOs that have been issued within the last six months.

Valuation Monitor
The FCF Valuation Monitor is a comprehensive quarterly valuation analysis (e.g. ratios and multiples) for the German small / midcap market segment of selected industry sectors.

Credit Monitor
Comprehensive analysis of the interest rate environment and loan market for corporates in Germany.

NEWS & PRESS

thumbnail of European Pharmaceutical Market Study

FCF Pharmaceutical Market Study – 2022

FCF Fox Corporate Finance GmbH is delighted to publish the new “FCF Pharmaceutical Market Study – 2022”. Based on available data from European pharmaceutical providers, the FCF Pharmaceutical Market Study is a detailed and comprehensive

Read More »

FCF Bank Monitor – Q3 2022 published

FCF Fox Corporate Finance GmbH is delighted to publish the new “FCF Bank Monitor – Q3 2022”. FCF regularly engages in research on the banking sector based on available data from the most active and

Read More »
[a-zA-Z0-9_.-]
[a-zA-Z0-9_.-]
[a-zA-Z0-9]
[a-zA-Z0-9]