Creditor Relations

from Wikipedia, the free encyclopedia

Creditor Relations (CR) describes the management of communication relationships between companies and their lenders. It can as a discipline of investor communication ( investor relations are understood) and, accordingly, as the field of corporate communications . The purpose is to ensure an appropriate rating (rating) on ​​the part of the lenders (e.g. banks) and to strengthen the company's ability to raise capital and the confidence of lenders.

term

New institutional economics and in particular the principal-agent theory can be seen as the theoretical basis of creditor relations .

There are other English terms for communication with lenders such as bondholder relations , debtor / debitor relations and fixed income investor relations . The term bondholder relations refers literally only on cultivating relationships with holders of bonds .

aims

The objective of creditor relations as a sub-discipline of investor relations is in the most general sense to increase the company value . A distinction is made between financial and communication policy goals. The former can be seen in the reduction of borrowing costs , the diversification of the creditor structure and the procurement of borrowed capital. The communication policy objectives, on the other hand, are to reduce information asymmetries and to build and maintain trust and image. These goals should ultimately be reflected in a long-term, maximum and fair assessment of the creditworthiness and contribute to increasing the company's value.

Target groups

The main target groups include banks, bond holders and other lenders. In addition, information brokers, such as rating agencies, whose judgment can have a significant influence on lending, play an important role. As a rule, the information brokers have no investment interests of their own, but are important for attracting lenders and conveying the credit risk. Buyer analysts, for example from bond funds, can also be among the information brokers. The analyst of the house bank plays an important role especially in the financing of small and medium-sized enterprises , as he ultimately carries out the internal rating and, on behalf of the bank, gives a recommendation regarding lending.

Tension between investor and creditor relations

In addition to numerous similarities, there are clear differences between communication with lenders (creditor relations) and equity investors (investor relations in the narrower sense), which can be justified by differing expectations and attitudes of their respective recipients . Equity providers, such as shareholders , participate in the growth of "their" company. They are usually interested in future price increases and large dividends, expect increasing cash flows and company values. Under certain circumstances, equity investors also support risky investment decisions, provided that they promise a high return. Lenders behave quite differently in this regard: banks, for example, do not normally participate in the growth of the borrower, but receive interest and repayments that are independent of success. The duration of the capital allocation is usually limited. Lenders are interested in stable cash flows, low operational risks, good rating results and a solid equity base.

literature

  • Eloy Barrantes: Theory and Practice of Creditor Relations: Communication with Lenders in the Context of the New Institutional Economy . AVM, Munich 2009, ISBN 978-3-89975-937-2 .
  • Clemens Denks: Bondholder Relations : Obtaining and processing information from corporate bond investors . 1st edition. GoingPublicMedia, Wolfratshausen 2006, ISBN 3-937459-29-4 .
  • Henryk Deter, Michael Diegelmann: Creditor relations: relationship management with lenders . 1st edition. Bankakademie-Verlag, Frankfurt am Main 2003, ISBN 3-933165-84-9 (276 pages, 24 cm).
  • Stephan Lowis, Holger Perlwitz, Olaf Streuer, Markus Walchshofer: Fixed Income Investor Relations . DIRK-IR-Guide, Volume XII, Frankfurt 2016, ISBN 978-3-9816831-4-1

Individual evidence

  1. ^ Barrantes, Eloy: Theory and Practice of Creditor Relations. Communication with lenders in the context of the new institutional economy, Munich: AVM, 2009, p. 19.