Cash & Liquidity Management
Published  7 MIN READ

Schuldschein: Helping SITA Rebuild the Airline Sector

When global air transport infrastructure provider SITA was seeking to extend its cash buffers, Germany’s Schuldschein market caught the eye of its Group Treasurer and Finance Director, Andrea Sottoriva. TMI talks to him about how issuing debt mid-pandemic has been a positive experience for all.

In a challenging economic environment, a significant cash holding is advantageous, yet market unpredictability still weighs heavily on its confident deployment. Arranging for a suitable buffer might see some listed corporates tapping into the capital markets, but this may seem unjustifiably demanding and expensive for what’s required. Financing options in this context may appear limited but there is an alternative source that many Corporate Treasurers are yet to consider: Germany’s Schuldschein market.

Similar to a traditional bond but less expensive and administratively demanding for issuers, Schuldscheindarlehen (SSD), or promissory note loans, are privately placed instruments that do not need to be registered at a stock exchange. As such, while the market is recognised mainly as catering to unlisted mid-sized DACH-based corporates (German, Austrian and Swiss), it has been slowly attracting attention in recent years from much larger players. Not least among these are Germany-based household names such as Porsche, Lufthansa, Bosch and TUI, and non-DACH corporates such as Port of Rotterdam, Sweden’s Vattenfall, and French retailer Auchan.