It took a while to get going this year, but the cash capital relief pipeline is now in full swing.
Santander remains the main supplier of paper, despite such deals becoming increasingly popular and programmatic from other banks in recent years. The bank has been active, issuing from its German, Spanish and now Italian consumer shelves in recent weeks.
Notably, last week, BBVA also placed a large quantity of mezz: over €330m from an enormous €2.7bn Spanish deal. The mezz was well bid, while the class 'A' execution was eased by retaining the majority. The bank is starting to make a habit of such deals, following up from an €800m deal last year, after many of its previous trades were retained.
Placing size with this kind of trade almost makes it easier, because it offers the promise of greater liquidity to investors if there are more buyers out there with exposure. Sources have certainly argued in the past that Santander gains from its repeated presence and volume. BBVA could be heading down the same track.
Meanwhile, the Italian market is picking up too, with Stellantis and Mediobanca both getting full deals done.
The synthetic SRT cousins of these deals used to be very seasonal with activity concentrated at the end of the year, but it has been dispersing more and more as transactions spread out in part to manage workload, but also execution risk. The cash equivalent still seems a little seasonal, with now and September being popular windows.
The tricky market conditions this month might have cramped the calendar a bit, plus cash investors often seem to complain of a lack of euro mezz in Q1, so perhaps someone will try an early start next year.
Other action George Smith and Tom Hall delve into this week on Another Fine Mezz are prime mortgages in the UK and Netherlands and the rejuvenated CLO market.