Cédulas faces face lift

By Bill Thornhill
23 Oct 2014

The Spanish covered bond law could be set for profound change that will bring it into line with the best in show schemes. However, as the claim of existing holders would be considerably diminished, a huge liability management exercise is justified.

Proposals set out on Wednesday by the Spanish treasury tie into capital requirement regulations and will become unstoppable under their own momentum. The major challenge is not that investors will have much less collateral protection but rather the transition process itself. Grandfathering existing deals isn’t a viable option. ...

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