Top of the agenda as the new Commission looks to build on in-process capital markets union (CMU) workstreams to operationalise the single capital market should be creating a bespoke EU-wide debt market for midcap companies, providing them with more funding choices that help minimise capital costs.

Companies turning over between EUR 100m and EUR 500m and potentially up to EUR 1bn form a workable nucleus around which a bespoke market architecture can be built and instruments designed. An EU framework culminating in the assignment of an EU MidCap Bond label would give issuers, investors, intermediaries and service providers the confidence that labelled issues meet minimum standards.

A market intermediating issue sizes of between EUR 25m and EUR 125m would fill a major gap in the EU’s debt financing toolkit since the corporate segment of the Eurobond market caters to multinationals issuing frequently and in large size.

A number of in-process initiatives will benefit an EU Midcap Bond market, including the consolidated tape being ushered in by the MiFIR review; the introduction of the European Single Access Point; and the European Crowdfunding Service Providers for Business Regulation. Large pools of bank-originated receivables will be vital for a vibrant capital market. Securitisation is rightly embedded as a centrepiece of the single capital market with the aim of accelerating bank capital velocity and increasing the level of funds available to lend to the real economy.

Read the full The Wide Angle by Keith Mullin here.