How a Little-Known German Debt Product May Flourish After Brexit

Schuldschein growing at 50% compound annual rate, says Scope
Almost one-third of issuance is for non-German companies

Visitors take in the city skyline view from the 15th floor pantry area inside the European Central Bank (ECB) headquarters as skyscrapers tower over commercial and residential property in Frankfurt, Germany, on Wednesday, Oct. 18, 2017. In a tweet with the hashtag #Brexit, Goldman Sachs Group Inc. Chief Executive OfficerLloyd Blankfeinon Thursday hailed great meetings he had in Frankfurt and said he will spend a lot more time there.Photographer: Alex Kraus/Bloomberg

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By Jacqueline Poh

November 2, 2017 at 10:33 AM UTC

This article is for subscribers only.

Bankers and investors relocating from London to Frankfurt after the U.K. leaves the European Union next year may have to get to grips with more than just a new language.

International issuance of a German debt product known as Schuldschein, which combines elements of both bonds and loans, is already expanding at a compound annual rate of nearly 50 percent, according to Scope Ratings. With banks including Morgan Stanley and Nomura Holdings Inc. setting up EU headquarters in Frankfurt, adoption of this once obscure structure may step up a gear as the international capital market adapts to its new hub.