Solid performance despite weak economic conditions: SME bond market remains resilient in 2025

• 27 bond issues with a placed volume of with a placed volume of EUR 1.00 billion, around 9% below the prior-year period, but at a solid level in a long-term comparison
• Average coupon significantly lower at 7.34% p.a. (2024: 8.14% p.a.)
• High sector diversification: energy sector dominates
• Kolibri Beteiligung, Homann Holzwerkstoffe and FC Schalke 04 recorded the largest issues
• Defaulted bond volume increased to EUR 155.0 million, in line with the overall market trend
• IR.score of bond issuers slightly improved: positive correlation with placement success
• Surveyed banks expect stable market conditions in 2026 and rising transparency requirements

Cologne, 21 January 2026 – The German SME bond market once again proved remarkably resilient in 2025 despite a challenging economic environment. Against the backdrop of geopolitical tensions, economic uncertainty and volatile financial markets, the market remained stable and receptive to new bond issues. Although the number of transactions as well as target and placed volumes declined slightly, overall market activity remains at a solid level in a long-term comparison. These are the findings of the latest analysis by iron AG on the German SME bond market.

Slight decline in issuance activity and placement ratio – investor demand remains stable

Issuance activity in 2025 was below the previous year’s level: 24 companies issued a total of 27 bonds, compared with 33 issues by 28 companies in the prior year. Despite the lower number of issues, placement dynamics remained robust. The actual placed volume of EUR 1.00 billion was only slightly below the prior year’s level (2024: EUR 1.10 billion). Based on a target volume of EUR 1.26 billion, this corresponds to a stable placement ratio of around 80% (2024: 83%). Overall, the SME bond market once again demonstrated its capacity to absorb new issues in 2025, with investor interest remaining broadly stable.

Significantly lower coupons compared to the prior year

At an average of 7.34% p.a., coupons in 2025 were noticeably lower than in the previous year. Compared with 2024, this represents a decline of 80 basis points, while still standing 16 basis points above the level recorded in the first half of 2025. The decrease reflects the monetary policy shift toward a generally lower interest rate environment.

Bank support and stock exchange listing as key success factors

Of the 27 bond issues in 2025, more than half were placed as own issues without bank support, of which only three were fully placed. By contrast, 69% of bank-backed transactions (9 out of 13 issues) were fully placed or even oversubscribed. A stock exchange listing once again had a positive impact on placement success, with listed issuers achieving a placement ratio of 85%, compared with 76% for privately held companies.

Broad sector diversification shapes the SME bond market in 2025; energy sector again in the lead

From a sector perspective, the SME bond market remained broadly diversified in 2025. A total of 24 companies from eleven different industries used the SME bond market to finance their activities. As in previous years, the energy sector once again took the leading position, accounting for six bond issues and representing the largest issuer group. This was followed by the real estate sector and the “Travel & Leisure” segment, each with four issues, the latter being particularly influenced by two bonds issued by German Bundesliga football clubs.

Frederic Hilke, Head of Financial Communications & Investor Relations at iron AG:
“The SME bond market once again proved resilient and sectorally diverse in 2025. From football clubs such as FC Schalke 04 and SV Werder Bremen to commodity companies like Deutsche Rohstoff and HMS Bergbau, and established family-owned businesses such as Homann Holzwerkstoffe – the SME bond market once again demonstrated its importance as a financing channel for a broad range of mid-sized companies.”

Slight increase in restructurings and higher default volume in line with the overall market

In 2025, a total of 15 bonds were restructured (2024: 12), with the affected volume increasing by 14% year-on-year to EUR 387 million (2024: EUR 338 million). Given the significant economic challenges, bond restructurings have become an important instrument for companies undergoing restructuring phases.

With a volume of EUR 155.0 million from four issuers, the bond volume affected by insolvencies was significantly higher than in the previous year (2024: EUR 60 million from five issuers). By the end of the first half of 2025, defaulted volume amounted to only EUR 10 million. Overall, the number of insolvencies developed moderately compared with the broader market.

IR score: SME bond issuers with improved investor communication

Transparency levels in the SME bond market improved slightly in 2025 compared with the previous year. The average IR.score of issuers increased from 3.9 to 4.0 points. Listed companies achieved an average IR.score of 4.3 points, significantly above the average of non-listed issuers at 3.8 points. Comparisons between first-time and follow-up issues, as well as between bank-backed and own issues, further underline the importance of experience: follow-up issues and bank-backed bonds achieved average scores of 4.2 and 4.3 points respectively, while first-time issues and own issues reached only 3.6 points each.

Outlook of issuing banks for 2026: continued robust market development

For 2026, the surveyed issuing banks expect between 25 and 30 SME bond issues, driven by persistently high financing demand. Sound business models, resilient capital structures and professional reporting are seen as essential prerequisites for successful bond placements.

Frederic Hilke:
“The banks all agree: quality requirements for issuers are rising and transparency is becoming a decisive competitive factor in the SME bond market. According to issuing banks, investors will act more selectively in the current issuance year, and issuers with a high level of information quality will enjoy significantly better market opportunities.”

A summary of the survey is available on the iron AG website at https://ir-on.com/en/kmu-anleihen/.

German SME bond issues 2025

Criteria for SME bonds:
Issue volume up to EUR 150 million; denomination per bond max. EUR 1,000; bond listed on a stock exchange

* Industry classification according to Industry Classification Benchmark (Dow Jones, FTSE)

** If no information (n/a) on the volume placed was available or could be requested, the placement volume was stated as EUR 0

*** 3-month-EURIBOR as at 2 January 2026: 2.029%

About iron – the good guidance company
iron AG stands for trusted consulting in investor relations, financial communications, ESG, and sustainability. For over 25 years, we have supported listed small and mid-cap companies, bond issuers, as well as medium-sized and family businesses – with a strategic perspective and a clear understanding of business realities. Our clients value us as a reliable sparring partner: professional, proactive, and on equal footing. We provide sound guidance and ensure pragmatic and effective solutions.


Contact:
iron – the good guidance company
Frederic Hilke
Mittelstr. 12-14, Haus A
50672 Cologne
P: +49 221 9140-970
Email: ir@ir-on.com
http://ir-on.com