Santander

Rating: —/BBB/BBB

The CFO of Banco Santander Mexico told GlobalCapital that the lender had decided to get ahead of a possible surge in demand for credit by issuing the largest ever bond by a Mexican bank on Tuesday. But DCM and syndicate bankers worry that most Latin American issuers are not taking advantage of strong markets to shore up cash positions with the full impact of the Covid-19 crisis still unknown.

Banco Santander Mexico showed that emerging market investors are willing to deploy cash in a greater range of credits than just sovereigns as it sharply increased the size of a five-year senior deal on Tuesday. But though the new issue concession was in line with expectations, the deal underscored the new reality of funding conditions for Latin America borrowers.

Banco Santander Mexico is hoping to become the first Latin American company to issue internationally in six weeks on Tuesday after speaking to investors on Monday about a potential senior unsecured trade.

European corporates found a strong bond market on Monday after raising a record amount of bond funding last week, as the European Central Bank pours money into high grade debt.

Lloyds Bank Corporate Markets spied an opportunity to launch a new senior bond on Thursday, with credit markets performing well despite the tougher backdrop in equities this week.

GS names new equity syndicate head — HSBC promotes two in MENAT — Hennebry steps up at Santander — Together hires Harrison

The power of central bank buying and fund redemptions are evident this week in the European investment grade corporate bond market, where issuers have been squeezed into a narrow range of maturities as they search for cash.

Extraordinary times call for extraordinary capital markets activity. The North American corporate bond market funded a staggering record $194bn of investment grade issues in March while Europe has also been busy — shaking up the league tables and yielding a surprise windfall for the very largest investment banks.

Spain’s Red Eléctrica Corporación has hired banks to run a series of fixed income investor calls for a debut five year senior unsecured deal, in the first European corporate roadshow since stringent social distancing measures were implemented across the continent.

The Bank of England threatened to use its ‘supervisory powers’ on UK banks if they did not agree to suspend dividend distributions this year and stop paying cash bonuses to staff. The instructions do not apply to the equity-like CCDS instruments issued by building societies.

Conor Hennebry has been promoted from head of European debt capital markets and syndicated lending to global DCM head, following the appointment of Rafael Noya as head of global debt finance.