Spain

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.

Spanish renewable energy developer Abengoa became this week’s market punchbag after on Monday announcing a shock €650m rights issue that left both debt and equity investors running for the hills, writes Victor Jimenez.

Spain is often held up as an example of how austerity works, and Markit data published on August 5 provides some support to this view.

Spain raised just shy of its maximum target at auction on Thursday, as polls this week in Spain suggested support is declining for anti-austerity party Podemos ahead of elections later this year.

The European Covered Bond Council (ECBC) will present its new dual-recourse bond structure to an audience of regulators, central bank heads and other stakeholders in October – a meeting which will be a barometer of official sector appetite for backing the product.