Spain

Shares in Abengoa, the troubled Spanish renewable energy company, plunged again on Thursday and its credit default swap spread widened sharply, on unconfirmed reports in the Spanish press that banks including Bank of America Merrill Lynch, Citigroup and Société Générale had declined to underwrite its rights issue.

UniCredit Bank Austria (Baca) returned to the covered bond market on Tuesday to issue the first Austrian Pfandbrief since the country’s Financial Markets Authority (FMA) announced a debt moratorium on bonds issued by Heta Asset Resolution AG (HAR).

Spain’s 10 year borrowing costs rose at an auction on Thursday to more than double their low for the year so far.

A resurgent Spanish corporate finance market is putting the expansion plans of Spain’s national champions to the test, at home and abroad, writes David Rothnie.

Ardian, the French investment firm formerly known as Axa Private Equity, has opened a new office in Madrid to reinforce its relationships with corporations and clients in Spain.

Traders this week reversed the recently growing dispersion among some of Europe’s widest iTraxx Crossover credits, with Abengoa rallying sharply as three banks backed the company’s rights issue. But the reprieve was brief and against the tide, say some participants.

Was it all a dream? At the start of the week the markets were in the throes of a full-blown panic, with talk of “Black Monday” and plentiful comparisons with the Lehman collapse. Yet barely three days later, the iTraxx Europe was back trading at 70.5bp, exactly the same level it was quoted at a week ago.

Levfin specialist firm DebtXplained on Thursday said covenants on Abengoa’s €375m unsecured bond leave investors less protected than on competitors’ notes.

Spain’s 10 year borrowing costs dipped below 2% on Thursday for the first time since May, as the sovereign approached the three quarter mark on its funding schedule for 2015.

Spain slashed its one year borrowing costs at auction on Tuesday but the yield was still higher than the lowest level the sovereign has achieved so far this year.

Spain could be set to record its lowest borrowing costs at a 10 year auction since May if its yields hold steady this week, after its levels tumbled in secondaries on Monday.

Shares in Abengoa, the Spanish renewable energy developer, jumped initially today after it won a €600m contract, but bondholders have not yet felt any relief from the distressed levels at which its notes are trading.