Corporate bonds rising in popularity
The volume of corporate bonds rose from €2bn to €5bn in Slovakia over the past five years, as corporations attempt to diversify their sources of funding, the NBS financial stability report shows. Households have purchased a substantial share of the total, as their bond holdings rose from €0.5bn to €2bn (2.5% of their financial assets). Most of the Slovak corporate bonds have no rating, just half are listed on the stock exchange and are therefore at least partially liquid, and are subject to no guaranty scheme. They offer yields of 4-5% p.a., making them an attractive proposition when compared to zero yields on bank accounts. The NBS is trying to tighten rules for bond sales to retail investors.
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