Yes, a company can issue bonds without a bank and sell them directly to its own investors. A bond is a company's debt split into equal pieces, called securities, that many investors buy on the same terms, and nothing in EU law says a bank has to sit in the middle of it. What the law cares about is how the bond is offered and what investors are told.

That answer comes with one condition: the company needs people who already want to lend to it. A bank's main job in a bond is finding the buyers, so a company with its own customers, shareholders or investor network can skip that part and keep the fee, which raises the real question of this guide: when is going direct worth it?

In practice it takes three steps: structure the bond and decide what investors will be told, have investors signed up and checked by licensed partners, then get the holders recorded in the register and pay the interest until the bond is repaid. Below, we cover what direct issuance means, why companies do it, whether it is legal, each step, what you still need, and how the two routes compare.

What Direct Bond Issuance Means

Issuing a bond directly means removing the bank, not the rules.

Example: FC Schalke 04 (Germany, 2025). In November 2025 the football club Schalke 04 raised the public offer of its new five-year bond from €50 million to €75 million because demand ran well above plan. Fans subscribed straight on the club's own website, and a bank was used only to place part of the bond with institutional investors. It worked because Schalke already had the one thing a bank normally rents out: around 230,000 members willing to lend to their club. The club still needed an approved prospectus, so the rules stayed and only the bank's sales job went.

As the graphic shows, a bank-led issue runs from the company through a bank and its network of buyers to investors. In direct issuance, the bond goes from the company to its own investors, with a digital platform handling sign-up and subscription and a licensed registrar or depository keeping the record of who owns what.

The traditional model: why a bank normally sits in the middle

That bank, called the underwriter, does several jobs at once. It advises on the terms, prepares the paperwork, often promises to buy any bonds nobody else takes, and sells the bond through its own network of investors. In return it takes a fee from the money raised and sets the timetable. For a large bond sold to thousands of strangers, that network is worth paying for; for a smaller raise, the company often pays for buyers it does not need.

Direct issuance: bypassing the underwriter

Direct issuance, also known as self-issuance, splits those jobs up. The company sets the terms, prepares the paperwork with its lawyers, and offers the bond to people it already knows: shareholders, customers, the local backers of a project, or a private credit network. Schalke followed exactly this pattern: the relationship comes first, and the bond follows.

No investor base yet? You still don't need an underwriter. Companies without their own network usually place the bond through a licensed investment platform or a licensed placement partner that doesn't guarantee the sale, and use the first raise to build the relationships the next one relies on.

Why Companies Raise Debt Without a Bank

Cost, control, and margin

Owning the investor relationship is also where the money is saved. The underwriter's fee comes straight out of the amount raised, so a company that already knows its buyers keeps money it would otherwise pay for introductions. Control matters just as much: the company sets the interest rate, term and conditions around its own cash flow, and opens and closes the offer on its own calendar.

That saving is large for mid-sized bonds. Public data on bond costs is thin, and the clearest published estimates we found come from Germany's mid-market bond segment. There, guidance from IHK Nord Westfalen and a 2015 analysis in Unternehmeredition put the one-off costs of a bond placed through banks at 3 to 6 percent of the amount raised, covering placement fees, legal advice, rating, listing and marketing. Both are older estimates, but on a €10 million bond they still mean €300,000 to €600,000 gone before the first interest payment. In the direct issuances ONINO has supported so far, total costs have come to about 1 to 3 percent, covering technology, legal work and distribution, or €100,000 to €300,000 on the same bond.

The gap closes for very large bonds. On a bond of several hundred million, the bank's fee is spread over a much bigger amount, so as a share of the bond it shrinks, and the bank's reach into thousands of institutional investors is worth paying for. Going without a bank therefore pays off most for mid-sized raises, not for the biggest ones.

Access for mid-market issuers and SMEs

For many mid-sized companies, the choice is not between a cheap bank and an expensive one, but between going direct and not raising at all.

Example: SEICON Energy (Germany, 2026). In July 2026 SEICON Energy, a Berlin energy company founded in 2017, launched a five-year bond of up to €20 million at 7.5 percent. Up to €8 million of it is offered to private investors from €1,000 under a short, regulator-approved information document, and those investors subscribe directly with the company instead of through a bank. The money pre-finances solar installations the company has already sold and grows its energy sales business, without paying a bank to find the buyers.

Raises of this size are where direct issuance, one of the main alternatives to bank financing, changes who gets funded at all: mid-market companies, real estate developers, project companies and cooperatives whose raises are too small for a large bank but decisive for them. Instruments such as subordinated loans, where investors are repaid only after other lenders, participation rights and project bonds are common in these raises, although subordinated loans and participation rights follow different selling rules, covered below. Private equity managers and private credit managers use direct bonds the same way to fund deals across a pipeline.

Is It Legal to Issue a Corporate Bond Without a Bank?

Yes. No EU rule says a bond has to go through a bank, and issuing your own bond needs no banking licence. Licences apply only to the services around it, such as brokering, custody or keeping the register, and those run through licensed partners. Subordinated loans and participation rights are different: when they are not issued as securities, national law often requires them to be sold through a licensed firm or an authorised crowdfunding platform. For a bond, the real question is what investors must be told.

Prospectus thresholds: the numbers that decide your route

Whether you need a prospectus, the long document a regulator approves before a public offer, depends on who you sell to and how much you raise:

Rules differ between countries, so check the current position with your lawyer before you launch. The full ladder is in when a prospectus is required for a public offer.

Electronic securities and digital bonds

A bond no longer needs a paper certificate. A growing number of EU countries let companies issue it as an electronic security, including as a tokenized security on a blockchain-based register.

Example: Siemens (Germany, 2023). Siemens issued a €60 million tokenized bond on a public blockchain, sold it directly to three investors and settled it within two days, with a licensed registrar keeping the register. Our crypto securities guide explains how this works under German law.

The Bond Issuance Process, Step by Step

With the legal route settled, here are the three steps in more detail. Our self-issuance guide breaks the same work into five stages for every instrument.

Step 1: Structure the bond (terms, ISIN, documentation)

Start by defining the instrument: amount, interest rate (coupon), term, ranking (senior, meaning repaid first, or subordinated behind other lenders) and any conditions the company commits to (covenants), then prepare the terms and the offer documents your exemption requires. If the bond will be tradable or held in investors' securities accounts, arrange an ISIN, the international identification number for securities. Decide at this stage whether the bond will be tokenized, meaning issued as a digital security on a blockchain-based register, or kept as a classic security, because that choice sets who keeps the register later. Document for the most demanding reader you intend to invite: retail investors rarely question the fine print, but an institutional investor's lawyer will decide the deal on it, and the issuer, not an underwriter, owns the accuracy of every page.

Step 2: Onboard investors (KYC/AML, subscription)

With the instrument defined, the offer opens to investors. Each one is identity-verified (Know Your Customer, KYC) and screened under anti-money-laundering (AML) rules before subscribing, carried out by the licensed partners responsible for it through a digital onboarding and subscription flow rather than a bank's back office. Automating these checks is what lets a small team onboard hundreds of investors.

Step 3: Settlement, register, and servicing

Once investors subscribe and the funds arrive, the bond is allocated and holders are entered in the register, kept by the registrar, central securities depository or custodian that matches the bond's legal form, covered below. If the minimum amount is not reached by the end of the subscription period, the offer terms should say how subscriptions are refunded. From there the issuer runs the servicing around that register: coupon payments on the agreed dates, holder communications and reporting, and repayment of the principal at maturity.

What it looked like in practice: a €2 million SME bond

Those three steps are what a mid-market company went through when it used ONINO's software to issue a bond of roughly €2 million without a bank. The bond was issued as a tokenized security with an ISIN, with the register maintained by a licensed registrar partner, and the offer ran under a short national information document instead of a full prospectus. That let the company reach around 1,000 retail and professional investors.

• Time to launch: about three months from project start to the offer going live.

• Biggest delay: the national regulator's approval of the information document. The review has a fixed legal deadline, but each round of questions on the document added time.

• Total project time: about twelve months, through to the close of the offer.

• Total cost: 1 to 3 percent of the issue volume, split roughly evenly between technology, legal work and distribution.

• Bank comparison: there was none, because no bank would have arranged a bond of this size for the company.

For this company, the question was never bank versus direct: without direct issuance there would have been no bond at all, and the time to plan for was the regulator's review, not the bank's.

What You Still Need When You Skip the Underwriter

Removing the bank does not remove the jobs it did. Three of them still have to be covered:

Paying agent and registrar functions

Someone has to keep the register of holders and process the payments. Who does this depends on the bond's legal form. For a classic bond with an ISIN, the global certificate is usually deposited with a central securities depository (the institution that holds and settles securities centrally), investors hold it through their custodian banks, and a paying agent passes coupons to holders. For a tokenized bond, the register is kept by a licensed registrar or, for some security tokens, by the company itself, and interest and repayments can be paid out through a smart contract, a small program on the blockchain that sends each holder their share on the due date.

None of these is an underwriting role. ONINO's white-label bond issuance infrastructure gives the issuer this servicing layer under its own brand, with the licensed functions running through pre-integrated partners.

Compliance, reporting, and investor communications

Direct issuers also stay responsible for ongoing compliance: investor reporting, any updates to the disclosure document while the offer is open, and clear communication with holders. Building this in from the first issue is what makes repeat raises sustainable.

Secondary market and exit arrangements

The sharpest question investors ask is not about the coupon but about the exit. Brokering trades between investors and holding their securities for them are licensed services, whether the bond is a classic or a tokenized security. Decide before the first subscription how holders can exit, whether through hold-to-maturity terms, bilateral transfers or a licensed trading partner, and say so plainly in the offer.

Direct Issuance vs a Bank-Led Issue

Side by side, the two routes compare like this. The first difference comes before any cost: banks choose their clients, and many mid-sized companies never clear the bar.

Ultimately, a company can issue a bond without a bank, lawfully and at lower cost for mid-sized raises, as long as it can reach its own investors. Of the factors in that table, distribution decides the most, because the target investors determine the structure, never the other way around. For mid-sized companies with an investor base and a repeatable financing need, direct issuance usually makes more sense than paying a bank for buyers they already have.

As a rough guide from the figures above: for mid-sized raises sold to investors you can already reach, going direct usually costs less, at around 1 to 3 percent against 3 to 6 percent through banks. For bonds of several hundred million sold to investors you don't know, a bank's reach is worth its fee. The next move sits with the issuer: map who will buy your bond before you structure it, and the rest of the process follows. If you plan a programme of raises, ONINO's bond issuance software runs the workflow under your own brand.

This article is for general information only and does not constitute legal advice.

Last updated 13 October 2026. Last reviewed by Lukas Wipf, CPO & Co-Founder at ONINO, 14 July 2026.