SME’s bond issuance and access to bank credit: evidence from Italy

Annalisa Croce, Anita Quas, Francesca Tenca

Research output: Contribution to journalArticlepeer-review

Abstract

In this paper, we rely on the information asymmetries framework and relationship lending theory to study how small and medium-sized enterprises (SMEs)’s access to bank credit improves after the issuance of a Minibond. Minibonds are fixed-income securities issued by SMEs aimed at supporting growth projects and refinancing operations. They were introduced by different European countries only recently, in response to the European sovereign debt crisis, which considerably constrained bank credit for SMEs. Using a representative sample of Italian companies that issued Minibonds in the 2012–2020 period, we find support to our hypotheses. Issuing Minibonds helps SMEs access higher amounts of debt and improves credit conditions in terms of cost of debt and debt maturity, but with some caveats: only Minibonds issued with lower interest rates and longer maturities lead to better access to credit. Moreover, we find that some companies more exposed to information asymmetries (i.e. younger), with better access to transaction lending (depending on their location) and with larger amounts of collateral available (i.e., tangible assets) benefit more from Minibond issuance.

Original languageEnglish
Pages (from-to)499-535
Number of pages37
JournalReview of Managerial Science
Volume19
Issue number2
DOIs
Publication statusPublished - Feb 2025

Keywords

  • Bank credit
  • Information asymmetries
  • Minibonds
  • Relationship banking
  • SME

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