Risk and Pricing on the Italian Minibond Market

Abstract

The Italian Minibond market was born in 2013 and was expected to ease debt financing of SMEs as a complementary channel to bank credit. In this chapter, we investigate what were the determinants of the issuing prices of Minibonds in the ExtraMotPro market from 2013 to 2016, with a special focus on small listings by non-financial issuers and on default risk. We find evidence that the rating of Minibond issuers by credit rating agencies did not help investors reduce information asymmetries about their creditworthiness.