Spain
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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.
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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.
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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.
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Spain’s construction and energy company Abengoa on Monday announced an unexpected €650m capital raise, which triggered immediate selling in its shares and bonds.
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Covered bond new issue premiums fell this week as six issuers raised a collective €5.5bn in three currencies with total demand of almost €8bn.
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The secondary market is no longer a relevant tool for covered bond price discovery, say bankers, as spreads have come only to reflect the level at which the eurosystem will buy bonds rather than regular investors.
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Spain’s Banco Santander on Thursday announced a 24% surge in first half profits as revenues grew and provisions shrank in its far-flung retail network, although its wholesale banking unit turned in a roughly flat performance.
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Covered bond new issue premiums fell on Tuesday as four borrowers launched deals worth over €2.5bn in total, on collective demand of about €5bn. LBBW’s second deal of the month was priced 1bp tighter than its last bond, even though it was two years longer. Bankia was set to issue at less than half the concession paid by peripheral borrowers last week, while Bank of Montreal and Bank of Nova Scotia were set to price in line with recent Canadian predecessors.
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Zegona Communications, an Aim-listed operating company set up to buy, fix and sell European telecoms firms, is acquiring the entirety of Telecable de Asturias for €369m.
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Two periphery banks this week made clear that their market is back in business. Like the wider FIG market, the periphery had been closed since early June. There is room, albeit temporarily, for more, writes Virginia Furness.
