Spanish listed companies increase market-based financing
The indebtedness of Spanish Stock Exchange’s non-financial companies has dropped from 72.4% to 67.1% over the past seven years, according Spain’s stock markets operator Bolsas y Mercados Españoles (BME).
BME’s report also found that during the same period the Ibex 35’s non-financial companies increased their equity’s financing as well as the replacement of bank credit with financing based on listed debt instruments.
The companies’ weight of equity increased by 6.3% between 2010 and 2017. During this period, the equity (net assets) of the IBEX 35’s non-financial institutions grew by 27%, a figure that sets a trend for companies with privileged access to bank financing and Corporate Debt markets. The total equity of these companies in 2010 amounted to just over €142bn and to €180.9bn in 2017.
The report also found a reduction in bank financing and debts with credit institutions. Bank financing went from €113.5bn in 2010 to €69.1bn in 2017, down by 39%.
Conversely, financing via debt issues – managed through capital markets – rose by 28% during that period, from €90.8bn in 2010 to €116.1bn in 2017.
“This is a process that brings the Spanish corporate financing model closer to that of countries such as the United States or the United Kingdom, which usually lead economic growth,” states the BME Research report.
“This trend, also followed by other European countries, is very significant among those Spanish listed companies that are leading the internationalisation and growth drive which is gradually taking root in the processes of change and transformation of the Spanish production model. The diversification of the business financing sources is one of the main signs of this broad change.”
Bolsas y Mercados Españoles (BME) is the financial operator of all stock markets and financial systems in Spain. It has been a listed company since 2006 and offers a wide range of products, services and trading systems.