Spain

Trading levels given are bid-side spreads versus mid-swaps and/or an underlying benchmark and bid-yields from the close of business on Monday, June 22. The source for secondary trading levels is ICE Data Services.

Green bonds made up the majority of the supply in the euro bank bond market on Thursday, with Hypo Noe and Santander capitalising on strong demand for the asset class.

Banco de Sabadell proved very popular with a short-dated euro senior deal this week, after issuing in an unusual three year non-call two maturity structure.

Trading levels given are bid-side spreads versus mid-swaps and/or an underlying benchmark and bid-yields from the close of business on Monday, June 15. The source for secondary trading levels is ICE Data Services.

BBVA is expected to take advantage of recent changes to Pillar 2 requirements with a greater proportion of senior preferred issuance but it has a modest need for subordinated issuance. The Spanish national champion also plans to make use of its Targeted Longer-Term Refinancing Operation (TLTRO) allotment from the ECB, which has been substantially increased.

Rating: A/A/A-

Market participants expect European banks to take a large chunk of funding through the European Central Bank’s Targeted Longer-Term Refinancing Operations (TLTRO III) programme, hitting covered bond supply levels. But issuance in other asset classes should remain unaffected as banks follow through with their funding plans.

There were no issues of competing supply on Tuesday as three eurozone sovereigns amassed big order books, buoyed by last week’s expansion of the Pandemic Emergency Purchase Programme (Pepp).

Spain and SNCF SA announced new euro benchmarks with 20 year maturities on Monday, following the European Investment Bank’s record-breaking effort in the tenor last Friday.

After the global eruption of the coronavirus pandemic, issuers such as governments, central banks and companies have been prompted to create new strategies to tackle the negative effects. Banks have also recently begun issuing labelled bonds linked ot their Covid responses.

The Spanish treasury has invited investors to join a call on Friday to discuss the sovereign’s recently updated funding programme for the year.

Mitsubishi UFJ Financial Group (MUFG) has become the second bank to issue a Covid-19 bond in the euro market following the example set by BBVA in May.