Using flexible investments to diversify your portfolio, Promissory notes and private placements
Your benefits
Documentation – simple and cost-effective
Customisable risk/return ratio for the investment thanks to variable credit ratings
Investment volumes from €1 million upwards
Suitable for insurance company cover fund assets (depending on structure)
Implemented within a short period of time
Indicative issuance levels from different issuers provided upon request together with sample documentation
Promissory note loans: well worth the investment
- Promissory note loans are bilateral short-, medium- or long-term money loans for which a promissory note (in accordance with section 371 of the German Civil Code) is usually issued as evidence.
- Issuers know their creditors by name.
- Promissory note loans are not classified as securities under German law. Investor and debtor enter into a bilateral agreement.
Promissory note loans in three simple steps, Bringing together issuer and investor
Investor submits a request
It is usually the banks that first bring the issuer and investor together. Commerzbank acts as an intermediary between the two parties, either of which can make the first move.
Finalising trade details
One of the main advantages of promissory notes is that they are highly flexible and can be tailored to the needs of their contracting parties. All trade details are agreed upon with the issuer and investor during this second step.
Issuer mandates bank and transaction is concluded
Once all details of the transaction have been agreed upon, the issuer mandates the bank, which then issues the promissory note and concludes the transaction.
Is there anything else you would like to know?, FAQs on promissory note loans
Medium-sized enterprises in the German-speaking world often use promissory notes as an additional source of financing; they undertake to fulfil certain minimum standards (covenants).
The minimum issuance volume of €1 million makes promissory notes an ideal investment for medium-sized enterprises with corresponding investment volumes. Traditionally, other investors include banks domiciled in Germany and institutional investors.
No, not as a rule. An external rating is not required either.
Promissory note volumes range between €1 million and €200 million.
While standard maturities are 3, 5 or 7 years, other maturities (e.g. 10 years) can also be arranged.
The preparation phase takes 1 to 2 weeks. The subsequent credit check and book-building process take another 4 to 5 weeks. The remaining steps, including contract signing and documentation, are usually completed within 1 to 2 weeks.
IAS 39 and Solvency II do not classify promissory note loans as marketable securities.