Spain

Moody's yesterday (Monday) downgraded Dexia Sabadell's cédulas territoriales from Aaa to Aa1. The rating remains on review for possible downgrade, where it was placed at the beginning of October.

Moody's today (Monday) cut the rating of Dexia Sabadell by three notches, from A2 to Baa2, and changed the outlook from stable to negative.

Banco Pastor is in the market today (Friday) with a three year Eu1bn no-grow government guaranteed issue that could put the latest Spanish deal 5bp inside where La Caixa opened issuance in late January.

Bankinter yesterday (Wednesday) printed its debut government guaranteed deal, soaking up investor demand left unsatisfied by preceding Spanish transactions in the guaranteed market. Its oversubscribed book bodes well for Banco Pastor, which today (Thursday) announced that it will follow with a government-backed benchmark.

Bankinter today (Wednesday) became the fourth Spanish bank to tap the government-guaranteed market. Elsewhere there has been little activity in the financial institutions market this week, although Standard Life Bank also launched a government-backed transaction today, in sterling.

Banco Popular yesterday (Monday) became the third Spanish issuer to price a government-guaranteed transaction, a Eu1.5bn three year bond that achieved the tightest level so far for the Spanish government-backed asset class. Supply of Spanish guaranteed debt looks set to continue, with a fourth Spanish bank today (Tuesday) announcing a mandate for its debut.

Ahorro Corporación Financiera (ACF), which runs the AyT Cédulas Cajas programme, and the Confederation of Spanish Savings Banks (Ceca) are setting up structures for pooled government guaranteed issuance by Spain's savings banks, which are eligible for up to around Eu50bn of guarantees under the Spanish scheme.

Banco Popular Español today (Monday) tapped the market with its debut government-guaranteed deal, the third from Spain, and will price the paper inside the levels achieved by La Caixa and Caja Madrid.

Erste Bank yesterday (Thursday) continued this week’s trend of pricing government guaranteed issues in line with guidance, some at tighter levels than the most recent deals from the respective jurisdictions. Meanwhile a third Spanish bank is preparing to follow in Caja Madrid's footsteps.

The financial institutions market today (Tuesday) burst into action with three guaranteed deals and one unguaranteed, after the quiet start to the week yesterday. And there is already speculation about the next mandate from Spain.

Fitch yesterday (Wednesday) announced positive rating news for two of Spain’s savings banks.

Government guaranteed issues from La Caixa and Raffeisen Zentralbank yesterday (Wednesday) were both priced tightly in terms of their premiums versus their respective sovereigns. But while this did not get in the way of the Austrian bank’s transaction, syndicate officials away from the Spanish deal have criticised the spread.