MARF, an ideal alternative for Portuguese companies to reduce their reliance on bank financing

12th February of 2019

Lisboa, 12 de febrero de 2019 "Portuguese companies need to reduce their reliance on bank financing to strengthen their resilience to potential credit shocks, given the growing uncertainty surrounding the global economy," said Lisbon's Managing Director of Axesor Rating, Adolfo Estévez, in his speech in the conference "Alternatives of Financing for Portuguese companies", organized by the law firm Gómez-Acebo & Pombo. Together with the managing director of Axesor, in this day the general director of BME (Bolsas y Mercados Españoles) Renta Fija, Gonzalo Gómez-Retuerto, took part; representatives of the markets such as Sergio García, head of Capital Markets and advisor to M&A (Fusions and Acquisitions) at EBN Banco, or Ricardo Benedé, managing director at Haitong, as well as partners of Gómez-Acebo & Pombo Mafalda Barreto and Guillermo Guerra. This meeting set out the advantages that MARF represents so that Portuguese companies can diversify their funding sources. This market was created in Spain in 2013, aimed exclusively at institutional investors and in just five years of life has channeled financing for medium and large companies for more than 12.7 billion euros. In these years, more than 55 companies have accessed this fixed income platform, from various sectors, such as telecommunications, construction, infrastructure, food, real estate, renewable energy, media, tourism or retail. These companies have made both long-term and short-term emissions, as well as structured products, such as securitisations or bonds designed to finance specific projects (Project Bonds). The director of Axesor Rating defended the suitability of going to capital markets. "It is a win-win for companies and banks," said Adolfo Estévez, who explained that "financial institutions allow them to reduce the risk profile of their assets, while generating fees to the intermediary of financing between institutional investors and Customers, while for companies it allows them access to investors willing to accept longer terms than traditional bank financing, with bullet depreciation structures and introduces a very welcome culture of discipline and transparency into companies financially." Several Portuguese companies have already debuted at MARF, but the circular adopted on 4 December makes the market regulation even more flexible and accessible to Portuguese firms by lightening documentation requirements and allowing, for example for example, that admission brochures made for other markets are also valid for MARF. On the other hand, the head of Axesor Rating underlined the advantages that it entails for companies to have a rating: it brings transparency to the main stakeholders of the company, which improves the functioning of the company; allows easier access to private sources of financing, such as financial institutions themselves and, having a rating, is an ideal support for the internationalization processes of companies". Axesor has recently awarded Portugal a BBB rating with stable trend. The agency expects the Portuguese economy to grow this year by 1.8%, warning of the maturity of the economic cycle and among the risks is precisely the high volume of non-performing loans to companies, with a delinquency rate of 11.7%.