Spain

Caja Madrid was downgraded from AA- to A+ by Fitch yesterday (Wednesday) afternoon because of a decline in its asset quality and risk concentration.

Fitch yesterday (Tuesday) downgraded Banco Popular Español from AA to AA-, on concerns over its funding mix and its exposure to the worst-hit sectors of the Spanish economy.

The flow of Spanish government guaranteed bond issuance is showing no signs of stopping as two more borrowers are preparing issues, of which at least one will be priced next week.

The Spanish authorities’ rescue of Caja de Ahorros de Castilla-La Mancha (CCM) is not likely to affect Fitch’s AAA ratings of multi-issuer cédulas transactions to which the savings bank contributes, said the rating agency yesterday (Thursday).

Caixa Galicia has closed books on a Eu1.25bn three year government guaranteed issue that it is due to be priced this (Friday) afternoon, rounding off a week in which Spanish issuers fared better than some market participants had been expecting after Caja de Ahorros de Castilla-La Mancha had to be rescued last weekend.

Fitch yesterday (Tuesday) placed the issuer rating of Caja de Ahorros de Castilla La Mancha (CCM) on Rating Watch Positive.

Fixed income markets were this (Monday) morning taking the Spanish authorities’ rescue of Caja de Ahorros de Castilla-La Mancha (CCM) calmly, despite it being the first bailout of a bank in the country since the crisis began.

Banco Cooperativo Español on Wednesday priced a Eu1.4bn three year government-guaranteed deal, showing that despite the relentless pace of guaranteed issuance from Spain, the right name can still drum up plenty of investor interest.

The ever dwindling appetite for Spanish government-guaranteed paper was clearly evident yesterday (Monday) as Cajamar just about got a Eu1bn deal over the line, but another mandate is already out.

Aareal’s debut SoFFin-backed issue has been the highlight of government-guaranteed supply this week, while BNP Paribas is today (Wednesday) adding momentum to a reopening of the unguaranteed senior bank market.

Fitch on Friday afternoon downgraded the cédulas hipotecarias (CHs) of Caixa Catalunya and Caixanova from AAA to AA+, after cutting their issuer default ratings earlier that day. And a further cut looks in store for Caixa Catalunya if Fitch’s revised liquidity risk assumptions are implemented in their proposed form.

The European Central Bank is understood to have lifted the standing of Spain’s multi-cédulas programmes this week by upgrading them from category four to category three in its framework for deliverable collateral assets.