Spain

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.

Caixanova got its inaugural three year government-guaranteed transaction done yesterday (Wednesday) afternoon. The Eu1bn issue via Barclays Capital, BBVA, BNP Paribas, Caja Madrid, DZ Bank and HSBC was priced at the tight end of the 85bp-90bp guidance.

Caixanova has finally opened books on its first government-guaranteed issue, albeit at the widest spread yet for a Spanish issue. Meanwhile, Dexia and Lloyds yesterday (Tuesday) set new benchmarks for size in the government-guaranteed asset class.

Dexia Crédit Local today (Tuesday) found its second visit to the government-guaranteed market easier than its first and is set to price its new issue this afternoon. Meanwhile Lloyds TSB found demand from unexpected areas in sterling and OeVAG wrapped up its four year euro.

Standard & Poor’s on Friday afternoon cut the rating of Caja Madrid’s cédulas hipotecarias from AAA to AA. Although the downgrade is under S&P’s current methodology, the action gives a foretaste of what the rating agency’s proposed new approach could bring. Meanwhile the Spanish banking system continues to suffer negative ratings news.