Pareto Securities expands market share in 2022 despite challenging macroeconomic environment

Frankfurt, January 19, 2023. Pareto Securities AS, an international investment bank headquartered in Oslo and a long-standing partner to the mid-market in Scandinavia and Germany, further consolidated its leading role in the Nordic High Yield Bond market, especially against the backdrop of a difficult market environment. Thus, Pareto Securities achieved a market share of 29% in the overall market in 2022 (2021: 24%). Pareto Securities also recorded growth in Euro-denominated Nordic High Yield Bonds, from a 29% market share in the previous year to 48% in 2022.

Compared to a strong 2021, and further driven by geopolitical turmoil and a spike in global interest rates, primary volumes in international high yield markets declined sharply in 2022. As a result, primary volumes in the European and U.S. high yield markets fell by 78% and 81%, respectively, to a record low since the 2008 financial crisis. The Nordic High Yield Bond market, on the other hand, only recorded a decline in primary volume of around 60% in 2022, to around EUR 7 billion from around 100 transactions. This development indicates the relative resilience of the Nordic High Yield market in international comparison.

Nordic High Yield Bonds with a total volume of EUR 170 million were placed on the Frankfurt Open Market in the fourth quarter of 2022. Pareto Securities acted as Sole or Joint Manager in all transactions. The transactions included a EUR 35 million senior secured bond by German automotive tier-2 supplier Booster Precision Components and a EUR 15 million tap issue by gym operator LifeFit Group. Both transactions were accompanied by Pareto Securities as Sole Manager. Activity in the German SME bond market was subdued in the fourth quarter of 2022, with a total volume of around EUR 47 million from three primary transactions.

Lutz Weiler, CEO Pareto Securities Germany, comments: "We were able to further strengthen our position as a leading player in the Nordic High Yield Bond market, especially against the backdrop of extremely challenging market conditions in 2022. Overall, the market development in 2022 underpins the robustness of the Nordic Bond market in an international context. At the same time, thanks to the flexible bond structures, our global investor network and the involvement of a Nordic trustee, the Nordic Bond format is an attractive way for medium-sized companies to raise capital even in difficult market environments. Accordingly, we see ourselves well positioned for the current financial year to be able to support issuers as a strong placement partner in growth financing.”

For 2023, Pareto Securities expects an improved market environment for primary transactions in the Nordic High Yield market. Julian Müller, Partner, Pareto Securities Investment Banking: “After a very challenging 2022, we anticipate a more supportive but still cautious capital markets environment moving into 2023. Following the sell offs last year, bond offerings in the secondary markets are beginning to dry up, which is expected to increase relative attractiveness of primary transactions for fixed income investors in 2023. Nevertheless, some of the topics from 2022, namely high inflation, central bank tightening and a potential recession, will continue to accompany us, likely causing some volatility throughout the year. On the Nordic High Yield primary side, we see well filled deal pipelines, which have already resulted in a busy start to the primary year.”

About Pareto Securities
Founded in 1986, Pareto Securities is headquartered in Norway and has offices in Denmark, Finland, Sweden, Germany, the UK, Switzerland, the US, Singapore, and Australia. Pareto Securities has a leading position in the Nordic financial markets and a strong international presence. Pareto Securities offers a wide range of financial services, including equity and fixed income brokerage, equity, debt and project finance, and advisory services related to mergers and acquisitions and restructuring.