cheese firm sells Parmesan-backed bond
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[February 04, 2016]
ROME (Reuters) - An Italian dairy
cooperative has sold bonds backed by Parmesan cheese, the company said
on Tuesday, a rare example of one of the country's plethora of small
firms raising funding on capital markets.
Three years of recession have choked bank lending and Prime
Minister Matteo Renzi's government is trying to encourage firms to
raise money elsewhere and take advantage of a tentative economic
Cheese-maker 4 Madonne Caseificio dell'Emilia has done just that,
raising 6 million euros ($6.55 million) in mini-bonds guaranteed by
wheels of Parmesan.
4 Madonne's chairman said it would use the money raised in the bond
issue to improve its facilities and promote the thick-rinded cheese
it makes in Italy's northern gastronomic heartland Emilia Romagna.
More than 95 percent of Italian companies have fewer than 10
employees and traditionally rely on bank lending for financing.
But banks' willingness to provide credit has eroded as bad loans
piled up on their balance sheets during the recession, making it
harder for smaller, more vulnerable companies to get funding.
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The government wants to spur lending to boost the economy, which is
estimated to have grown about 0.8 percent last year.
4 Madonne's bonds will pay a fixed yield of 5 percent each year
until they mature in January 2022.
(Reporting by Isla Binnie)
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