Bonds

The main difference lies in the source of funding and flexibility. In the case of a loan from a bank or other financial institution, the funds are provided by a single creditor, whereas in a bond issue, the funding comes from investors who purchase the bonds issued by the company. 

Bonds often allow a company to: 

• raise a larger amount of funding;
• negotiate a more flexible repayment schedule (e.g., repayment at the end of the term);
• diversify funding sources and reduce dependence on a single creditor;
• tailor financing to a specific project or business expansion.

The costs of a bond issuance depend on the size of the issue, its structure, and the complexity of the preparation process. 

They typically include: 

• structuring and placement fees; 
• preparation of legal documentation; 
• establishment and registration of security arrangements (if applicable); 
• other administrative expenses related to the bond issuance. 

We prepare an individual proposal for each company, therefore the exact cost structure is provided after assessing the planned transaction. In most cases, however, the total costs fall within the range of 2–4% of the total amount of the bond issue being placed.

Bond financing is particularly relevant for small and medium-sized enterprises, as well as fast-growing businesses seeking funding for expansion, investments or refinancing. 

Bond issuance is typically considered when the financing need amounts to several million euros or more. The key assessment criteria are not the size of the company itself, but its financial position, business model, cash flows and ability to meet its financial obligations. 

Profitus helps companies with annual sales revenue exceeding EUR 10 million to place their bond issues.

Not necessarily. Bonds may be either secured or unsecured. 

The decision depends on the company’s financial position, operating history, the size of the issue and investors’ risk assessment. In practice, secured bonds often make it possible to offer more attractive terms to investors. Therefore, in many cases, it is advisable to provide appropriate security arrangements, which Profitus identifies together with the issuer.

From the initial assessment to the placement of the bonds, the process typically takes 4 to 8 weeks. 

The timeline depends on: 

• preparation of the required documentation; 
• complexity of the legal structure; 
• establishment and registration of security arrangements; 
• the investor acquisition process. 

If the company provides the required documents promptly, financing may be raised within a shorter timeframe.

Yes. Refinancing is one of the common purposes of a bond issue. 

Companies use bonds to refinance bank loans, private loans and other financial liabilities, or to optimise their capital structure by extending financing maturities or improving cash flow management.

Not all information becomes public. However, in most cases, a certain level of disclosure is recommended in order to attract more investors to the bond offering. 

Investors are provided only with the information necessary to make an informed investment decision. Trade secrets, sensitive business information and other confidential material are not disclosed publicly. 

The entire disclosure process is carried out in accordance with applicable laws and confidentiality principles, ensuring an appropriate balance between providing investors with sufficient information and protecting the company’s interests.