MARF, the alternative to bank financing, is now a reality
The stage is all set for the start-up of the new Alternative Fixed-Income Market (“MARF”). Officially unveiled on October 7, 2013, the platform offers Spanish companies one more alternative to bank financing.
As we reported in an earlier post on this blog, the Spanish business community has traditionally financed growth through bank credit. However, the intervention of certain credit institutions, the new banking legislation requiring them to have more capital, not to mention the crisis itself, have all put the squeeze on bank financing.
Against this backdrop, in order to promote forms of non-bank financing, the lawmakers have approved a raft of measures in a bid to mitigate the restrictions imposed by the Corporate Enterprises Law on securities issuances by these companies, as well as to relax the requirements for the issuance of debentures to be listed through multilateral trading systems (by introducing a new article 30quáter to Securities Market Law 24/1988, of July 28, 1988).
One such measures has brought with it the creation of the MARF, a new multilateral trading system, the establishment of which is now in the final stages.
The market consensus is for the MARF issuances to reach a minimum volume of between 20 and 25 million euros, although those of around 10 million euros and, needless to say, issuances of higher amounts, could also be considered feasible. The MARF issuances will be targeted at qualified investors, both Spanish and foreign, looking to diversify their portfolios with fixed-income securities in medium-size companies, usually unlisted and with healthy business prospects. This entails a substantial contribution to the development of alternative markets, conceived as multilateral trading systems and, in keeping with other initiatives of the Spanish and European legislatures, aimed at improving the financing of Spanish SMEs by facilitating the appearance of markets specializing in the trading of company debt.
Garrigues has prepared a Guide on the participants, the requirements for securities issues and admission of securities in the MARF, and the obligations for the issuer, which constitutes a handbook for any issuers looking to take the plunge.
Garrigues Corporate/Commercial Department
