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Market update Q1 2025
The subdued second half of 2024 continues in the first quarter of 2025: The market for Schuldschein loans is currently severely underrepresented. A noticeable slowdown is reflected both by developments on the capital market and by the downturn in the economy. Compared to previous years, demand for private placements or club deals is significantly higher than that for broad issues. As in the past two years, debut issuers are acting cautiously. Demand for ESG structures is falling sharply. With the first ESG Schuldschein loan of 2025, only one transaction is currently being marketed.
The recent interest gap was significantly influenced by the political scandal between the USA and Ukraine on February 28, 2025 and the subsequent “one trillion meeting.” The 25 basis point interest rate cut on March 6 had no direct impact on the markets, as this had already been largely pre-priced in. The preliminary low of MidSwap rates was reached at the beginning of December 2024.
An inverse yield curve is currently only visible at maturities of over 20 years. The 6-month EURIBOR continues to fall and was last at 2.17% (as of April 22, 2025)
Spreads have widened moderately in recent weeks. Spreads in the industrial sector react particularly clearly to economic developments. iTraxx Europe is stable over a 15-month comparison.
However, in view of the continuing uncertain geopolitical situation, subdued economic prospects and increasing fiscal room for manoeuvre, spreads are expected to widen further.
Outlook 2025
Solid Business Models wants to remain in demand over the rest of the year. There is a persistent sweet spot, particularly in the five-year term range. Spreads remain attractive.
Risk Factors
The market environment remains characterized by geopolitical tensions, ongoing crises, and uncertain economic prospects and inflation developments.
expectation
An increasing number of transactions and higher placement volumes are expected over the rest of the year, particularly in the second half of the year. A total market volume of 15 to 18 billion euros is expected for 2025.
