A Once-Hidden Credit Market Has Tripled in Recent Years

Published in

When a beloved regional beer ramps up production, there’s always a question of whether it can gain new fans without losing what made it special. Something similar is happening with a German debt instrument known as Schuldschein, a hitherto hidden corner of the market where borrowing has tripled in recent years, Bloomberg News reported. Not quite a loan and not quite a bond, the traditional Schuldschein was hammered out by local lenders for solid local manufacturers. Now companies like Volkswagen AG, ArcelorMittal and U.S. paintmaker Sherwin-Williams Co. are turning to Schuldschein as a way to borrow large sums from investors as far afield as China. Some of this new-style borrowing has blown up. How well can artisanal lending fare on the global stage? Read more.