Schuldschein loans have existed in Germany for decades and its precursors even longer. Despite being a fundamentally German law instrument due to its defining characteristics, in particular a lean documentation, flexibility, a certain fungibility and a favourable accounting treatment, it has become an internationally accepted instrument for raising funds in the capital markets.
This Advanced Schuldschein Guide is a translation of an article originally published in the Handbook of Financing Stock Corporations (Ekkenga/Schröer, Handbuch der AG Finanzierung, Carl Heymanns Verlag, 2014, ISBN 978-3452271518) and is aimed at professionals in the capital markets and loan space, in particular outside Germany, who want to get a deeper understanding of the functioning and legal basis of Schuldschein loans. It is suitable for issuers and investors as well as financial intermediaries and will be a useful guide for anyone seeking to enter this market or to better understand it, including possible pitfalls.
The guide will explain, amongst other things, the nature of a Schuldschein loan, why it is called so and why it is considered a capital markets instrument despite being a loan, advantages and disadvantages, an overview over the market and the placement process, characteristics of the Schuldschein loan as a German law instrument, covering the legal framework, regulatory issues and the restructuring of Schuldschein loans. Both legal as well as commercial aspects will be dealt with.
We have created the first summary guide on Schuldschein loans in Mandarin, which can be downloaded here. Download the full English and German versions of the “Advanced Schuldschein Guide”.
This Advanced Schuldschein Guide does not claim to be and is not an exhaustive source of information in this regard. Anyone interested to enter into a Schuldschein loan transaction should seek legal advice prior to entering into any such agreement and should also consult with its tax and banking advisors.
Please also see “Emission von Unternehmensanleihen – Hartwig-Jacob Koller Wick in der AG-Finanzierung” (in German only).
This document (and any information accessed through links in this document) is provided for information purposes only and does not constitute legal advice. Professional legal advice should be obtained before taking or refraining from any action as a result of the contents of this document.