A shift in the balance of power - the transformation from bank loans to corporate bonds

Abstract

Since the financial crisis in 2008, there has been an ongoing discussion in media concerning the need for alternative funding sources. Corporate bonds are the primary alternative to bank loans and many corporations currently consider entering the Swedish market. Therefore, this study aims to assess the possibilities for these firms to issue bonds. The report is based on interview answers of 43 respondents and assessed from three perspectives. The structure of the corporate bond market is firstly described. Secondly, the new conditions in the market are evaluated and finally the requirements from a corporate perspective are analyzed. The study concludes that the structure of the bond market is made for large firms and limits the possibilities for smaller corporations. However, for the first time all market players show interest in developing the market and the conditions for new firms will therefore be improved. Due to the awakened interest we predict a slow transformation where more corporations will issue bonds in the future.