PREPS 2004-2 €616m mezzanine instrument for financing European Mittelstand companies
HVB was mandated lead arranger
PREPS 2004-2, the second issuance of this innovative instrument for financing Mittelstand companies, was successfully closed several times oversubscribed, raising €616m, more than double the first transaction earlier in 2004. PREPS – preferred pooled shares – finance Mittelstand companies via the capital markets. Profit participation rights agreements with Mittelstand companies are pooled in a special purpose vehicle and securitised via notes. Due to high standardisation, PREPS offer participating companies attractive terms and low additional costs, easing access to capital markets.
PREPS 2004-2 securitised mezzanine funds to 67 companies, 66 German and one Austrian. With a total issuance volume of €865m within one year, the PREPS programme is, in terms of size, the most successful mezzanine instrument for financing Mittelstand companies, helping to secure 100,000 jobs and strengthening the capitalisation of these companies.
