After a slowdown in 2023 that had interrupted years of steady growth, the Italian minibond market is running again. According to data from the Minibond Observatory of the School of Management of the Politecnico di Milano, 2024 marked a higher-than-expected recovery, with 208 issues and total funding of EUR 1.515 billion, up 32% on the previous year.
A restart driven by big business
The market rebound, however, was driven by large companies. SMEs, which historically represent the heart of the Italian entrepreneurial fabric, raised 'only' EUR 686 million, down from 2023. The figure points to a dynamic that needs to be monitored: while on the one hand minibonds are confirmed as an effective tool for accessing capital as an alternative to bank credit, on the other hand the challenge of extending access to them to smaller companies is still open.
More emissions, more investors, but still high costs
From 2013 to date, the minibond market has seen 1,977 issues totalling EUR 12.56 billion, of which EUR 5.45 billion was raised by SMEs. 2024 marked the recent record with 208 issues (compared to 188 in 2023), confirming a positive trend. However, some structural obstacles remain: direct issuance costs continue to be a significant barrier, especially for smaller entities.
Moreover, the geographical distribution is still uneven: Lombardy leads the ranking with 71 broadcasters (39.9% of the total), followed by Latium and Veneto, while entire areas of the South and the islands are still poorly represented.
The rise of ESG minibonds
2024 also saw an acceleration on the sustainable finance front: 20 green minibonds, 3 social and 19 sustainability-linked bonds raised a total of EUR 233.7 million, or 15% of the market. This is a sign that sensitivity to ESG (environmental, social and governance) issues is also beginning to translate into debt instruments, and not just equity or corporate policies.
Basket bonds and new initiatives for 2025
One of the main drivers of growth has been the development of basket bonds: system projects that aggregate companies by geographic area or production chain, often with the support of public guarantees. The main initiatives in 2024 include the Basket Bond Lazio, Emilia-Romagna, Made in Italy, RedFish and the new tranche of Hydrobonds. New editions are expected in 2025, which could further contribute to the expansion of the market.
Who invests in minibonds?
2024 saw a greater involvement of foreign investors, with non-Italian funds and banks underwriting 33% of the total volume. Italian banks followed with 31%, while private debt funds covered 18% and Cassa Depositi e Prestiti 10%. The volume of securities placed on crowdfunding platforms fell from EUR 22.17m in 2023 to EUR 13.4m. There are still few specialised and active credit funds on minibonds, as well as on direct lending: it would therefore be desirable to broaden the investor base and pay more attention to investing in unlisted SMEs.
Emission characteristics: longer, more profitable
From a technical point of view, the average duration of minibonds has increased to 6.7 years, partly due to the effect of transactions such as Hydrobonds. Most issues provide for repayment in instalments (amortising), while bullet solutions (full repayment at maturity) are concentrated on short-term securities.
Coupons have adapted to the higher rate environment: the average is 9.04% for fixed rates and 6.89% for variable rates. Remuneration linked to ESG performance indices is increasingly frequent, while the use of guarantees and ratings still remains limited.
Conclusion: a mature market, but still to be expanded
As Giancarlo Giudici, head of the Minibond Observatory, points out, 'minibonds have proven to be a valuable tool for accessing the capital market and establishing relationships with investors, but the potential is not yet fully expressed. Work needs to be done to broaden the pool of issuers, strengthen the presence of independent arrangers throughout the country, and incentivise professional investors, particularly those specialised in SME credit.
2025 could be the breakthrough year, if macroeconomic conditions remain favourable. The minibond is thus confirmed not only as an alternative to bank credit, but as a strategic opportunity for the growth of the real economy.