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:

  • Interest rate turnaround after 4 decades of declining interest rates
    • Average interest rates for corporates loans in Germany ("Loan Interest Rates") in all sectors and rating classes have reached a maximum of significantly above 10% in the early 1980s, followed by a 40-year decline with lows around 1%
    • Since mid-2016, i.e. for the last 7 years, Loan Interest Rates have been fluctuating around historical lows at approx. 1.5%, and have hence built the trough of the long-term development
    • Starting in 2021, in initially moderate, during the last weeks continuously more rapid rise of the Loan Interest Rates could be observed, up to currently more than 2%; driven, inter alia, by the high inflation rates in Germany, the Euro Area as well as the US – but also by windfall gains of the lending banks
    • During the last week, i.e. since the begin of the Russian-Ukrainian war, Loan Interest Rates have declined slightl
    • The last interest rate upswings (before the start of the Russian-Ukrainian crisis) have already been dramatic, with increase rates in excess 50% within only a few weeks. When closing new financings / loans, corporates will hence have to pay interest at a level not seen within the last 7+ years. The decline in Loan Interest Rates due to the war in the Ukraine is, in our opinion, only a temporary effect – further increasing Loan Interest Rates are to be expected
  • Financing environment currently still positive
    • Historically, current interest rates are still on a very low level close to the all-time lows – although with rising trends during the last weeks and months
    • For the following quarter, lending banks expect only moderate tightening in the terms & conditions of corporate loans – however, the actual development during the last few quarters have always been somewhat more negative than predicted in the banks' expectations in the surveys
    • During the last 12 months, especially co-op as well as savings & loans banks have further increased their lending volumes in the corporate loan market, while commercial banks and state banks (Landesbanken) have been somewhat more cautious and foreign banks already somewhat reduced their new corporate lending volumes
    • The corporate lending market is currently still providing sufficient liquidity for new financings with attractive terms & conditions for corporates with sufficiently high ratings. This window might close however during the upcoining weeks and months, especially for companies with lower ratings in the BB-area and below
  • Macro-economic data points towards interest rate hikes
    • Inflation in Germany at currently above 5% has reached a level last experienced in the 1990s – although the core inflation (without energy and food prices), at currently just below 3%, remains not too far off the 2% ECB inflation target
    • In the Euro area, which is the important area for the ECB, inflation rate has also reached just over 5% - while the core inflation at "only" 2.3% remains to be closer to the 2% ECB inflation-target
    • Inflation has risen to above 2% - i.e. above the ECB inflation target – in all 19 Euro-participating countries
    • In the USA, inflation has already reached levels of above 7%, causing the FED to recently announce an interest rate increase for March 2022
    • The ECB will not be able to avoid interest rate increases in the mid-term, some ECB committee members have already demanded to end ECB's bond purchases program as well as the assessment of interest rate hikes; in addition, the expected additional new indebtedness of the Federal Republic of Germany (as well as probably most other Euro countries) in relation to the crisis in the Ukraine points to interest rate increases in the short- to mid-term
  • Impacts of the Russian-Ukrainian war
    • The interest and corporate loan markets do not (yet) show any noticeable impacts from the Russian-Ukrainian crisis
    • However, as this war has only started about a week ago, it might still be too early for predictions and future negative impacts just cannot be ruled out

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.

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