Minibonds

What are minibonds

Minibonds are medium-long term bonds issued by privately held small and medium-sized enterprises (SMEs), aimed at funding their development plans, extraordinary investments or refinancing operations. They allow SMEs to access capital markets, reducing their dependance on banks’ financing.

To invest in minibonds you need to look at:

  • Who is the issuing company (industry, history, financials, rating);
  • Use of proceeds of the issuance;
  • Repayment method (amortizing or bullet);
  • Coupon (fixed or floating) and maturity;
  • Any clauses, security, covenants.

How to invest in minibonds with Epic

On Epic platform investors and companies meet directly following the following steps in chronological order.

  • SHOWCASE: generic information on the company and the minibond terms
  • DATAROOM: investors can enter only after a specific approval by the company. The dataroom contains the minibond termsheet (draft updated regularly), the information memorandum and the business plan, the rating report when available and any other due diligence document. There’s also a forum for direct Q&A between the company and investors admitted to the dataroom.
  • OFFER: a specific period between O-date and C-date is defined, where investors can send an indication of interest (amount, coupon, any convenants). The company picks the indications desired and the final termsheet (same for all investors) is defined.
  • SETTLEMENT: An external settlement agent (nominated by Epic) collects the subscription amounts and delivers the minibonds (dematerialized) to the investors’ securities portfolios at their bank.

Investors are not required to open any checking accounts or securities accounts with Epic, nor with the settlement bank.

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Minibond Scorecard: Market Trends

Together with Business Support, a financial advisory boutique, Epic produces a quarterly analysis of the main characteristics of the minibond market (size, maturity, coupon, redemption…) and draws a «Minibond identikit» (based on average characteristics).

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