Beyond Bonds: Valmet’s €375M Schuldschein Signals Market Shift

ESPOO, FINLAND – December 12, 2025 – In a move that speaks volumes about both its own financial health and the shifting tides of European corporate finance, Finnish technology leader Valmet has successfully secured its first-ever Schuldschein loan, a landmark transaction totaling €375 million. While any capital raise of this magnitude is noteworthy, the details reveal a far more interesting story. The issuance was not merely successful; it was substantially oversubscribed, enabling Valmet to more than double the initial amount it sought from the market.

This overwhelming demand from a sophisticated investor base serves as a powerful endorsement of Valmet’s strategy and stability. More broadly, it highlights the growing appeal of alternative debt instruments as companies seek to navigate an increasingly complex financial landscape. For institutional investors and financial market analysts, Valmet’s transaction is a compelling case study in financial dexterity and a bellwether for the evolution of corporate funding strategies.

Demystifying the Schuldschein

For many outside of continental Europe’s core debt markets, the Schuldschein remains an unfamiliar instrument. Governed by German law, a Schuldscheindarlehen (SSD) is a privately placed, unlisted loan agreement that cleverly blends the characteristics of a traditional syndicated loan with the simplicity of a bilateral agreement. It is not a security and isn't traded on public exchanges, which is a key differentiator from corporate bonds.

This structure provides several distinct advantages for a borrower like Valmet. Firstly, documentation is significantly leaner and less costly than a public bond prospectus, reducing issuance friction and expense. Secondly, the terms are highly customizable. Valmet’s issuance is a prime example, comprising 11 distinct tranches with a mix of fixed and floating interest rates and maturities spanning three, five, seven, and ten years. This allows the company to build a staggered debt maturity profile, avoiding a single large refinancing cliff.

Critically, the Schuldschein opens doors to a different and deeper pool of capital. The typical investors are institutions such as insurance companies, pension funds, and asset managers—often conservative, long-term players who might not participate in the more volatile public bond markets. By tapping into this network, Valmet not only diversifies its funding sources away from an exclusive reliance on banks and public bonds but also forges relationships with a new class of long-term creditors.

A Strategic Play Rooted in Financial Strength

Valmet’s decision to tap the Schuldschein market now is no accident; it is a calculated move that aligns perfectly with its robust financial position and forward-looking strategy. The company’s recent performance paints a picture of a business executing with precision. In the third quarter of 2025, Valmet reported its best-ever comparable EBITA and margin (12.3%), fueled by a 7% organic increase in orders received. With an order backlog of €4.5 billion, the company has strong visibility into 2026.

This operational strength translates into a solid balance sheet. At the end of Q3 2025, Valmet’s gearing stood at 38%, comfortably below its strategic target of under 50%. This low leverage provided the ideal platform from which to launch this debt issuance. Rather than borrowing from a position of need, Valmet is borrowing from a position of strength to optimize its capital structure for the long term.

"The issue was substantially oversubscribed," noted Reetta Antila, Vice President, Group Treasury and Risk Management at Valmet. "The interest in the issuance underscores investors' confidence in Valmet's strategy and solid financial position. We chose the Schuldschein format to diversify funding sources, extend the debt maturity profile, and broaden the debt investor base."

The new loan, with an average maturity of nearly six years, significantly extends Valmet’s existing average non-current debt maturity of 2.8 years, enhancing its financial stability and providing long-term capital to support its “Lead the Way” growth and cost-competitiveness initiatives.

A Bellwether for European Corporate Finance

Valmet's successful transaction is reflective of a broader trend across Europe. The Schuldschein market, once a niche dominated by German-speaking issuers, has become a mainstream, pan-European financing tool. Its appeal often grows when public bond markets experience volatility, offering a more stable and predictable funding route. While the first quarter of 2025 saw a cautious start for the market, activity rebounded strongly in the second quarter, demonstrating resilient demand for quality issuers.

This move toward private debt instruments offers a fascinating contrast to the financing strategies of other industrial giants. Siemens Energy, for example, recently secured a massive €9 billion syndicated bank facility to support its project business. While effective, this represents a more traditional path. Valmet’s choice of the Schuldschein highlights a nimbler approach, leveraging a bespoke instrument to achieve specific strategic goals without the full scale and publicity of a major syndicated loan or bond program.

For a company like Valmet, which does not carry a formal rating from agencies like S&P or Moody’s, the Schuldschein market is particularly advantageous. It allows investment-grade-quality companies to access capital market-style funding without the rigorous and costly process of obtaining and maintaining a public credit rating.

The Ultimate Endorsement: Investor Confidence

The most telling aspect of Valmet’s issuance is the overwhelming investor demand. For an unrated company to more than double its initial offering size is a powerful testament to how the market perceives its creditworthiness. Institutional investors conducted their own deep-dive due diligence and concluded that Valmet represents a secure, long-term investment. This oversubscription acts as a market-driven credit endorsement, arguably as potent as a formal rating.

The success was facilitated by a trio of seasoned arrangers—BNP Paribas, Landesbank Hessen-Thüringen Girozentrale (Helaba), and Skandinaviska Enskilda Banken (SEB). Helaba and BNP Paribas are consistently ranked among the top arrangers in the Schuldschein market, and their expertise in structuring the deal and connecting Valmet with the right investor base was instrumental. Their involvement lent significant credibility to the transaction, assuring investors of a well-managed process.

Ultimately, the €375 million flowing into Valmet’s coffers is more than just capital. It represents a resounding vote of confidence in the company’s 225-year industrial legacy, its current strategic direction, and the resilience of the high-end industrial technology sector. As other corporate treasurers weigh their funding options, Valmet’s successful foray into the private debt market stands as a clear signal that innovative and flexible financing frontiers are not just open, but are welcoming to those with a compelling story to tell.