Writing for specialist finance publication, FTSE Global Markets, Alexandra Krief, director of mid-market evaluations at S&P Global Ratings, explores the reasons behind the increasingly promising performance of Europe’s alternative lending markets. Krief points out that while issuances of debt on the pan-European private placement (PP) markets and the German Schuldschein have reached all-time highs – rising by almost 80% in 2015 on the year before – this growth is eating away at PP markets in the US, as well as more traditional financing options such as bank lending .
Yet, Krief argues that more must be done to support the progress we are seeing in Europe. In her article, she suggests that document and policy standardisation – similar to the institutionalised framework implemented in the US – could help to overcome the hurdles to market entry, such as the recognised lack of transparency. In addition, more consistent insights into company credit risk would allow for more informed decision making when it comes to funding allocations and could thereby see more investors tapping these markets in years to come.
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