Spain

Emmanuel Macron’s topping of the first round of the French presidential election last weekend drove the best euro funding conditions for months. Public sector borrowers duly piled into the primary market. With more political risk ahead, many are racing to be 75% done for the year by summer, writes Craig McGlashan.

Elation in the euro markets after the first round of the French presidential election at the weekend continues to wash over the public sector bond markets, with the Province of Quebec selling its largest ever benchmark in the currency and Spain printing €5bn of inflation-linked paper.

Santander’s Brazilian operations were behind a 14% increase in the group’s attributable profit for the first quarter, with the UK arm also rebounding from a weaker 2016.

The European Financial Stability Facility on Tuesday priced a dual tranche deal that bankers are describing as possibly its greatest ever, laying to rest some of its other long dated trades this year that drew criticism. A pair of other issuers have also hit screens in a euro market enjoying what one syndicate head called “probably the best conditions we’ve seen in months”.

Talks are set to begin in Spain to reform the financing mechanism for the country’s regions, which could lead some to their return to the primary bond market for the first time in years. But as with seemingly everything in bonds this year, politics could yet scupper the efforts, write Craig McGlashan and Victor Jimenez.

Rare covered bond issuers from Portugal and Spain made a surprise return to the market this week after long absences with transactions that, under the circumstances, were very well received.

Banco Sabadell enjoyed a strong reception for its €1bn 10 year Cédulas which was priced on Wednesday, partly reflecting the paucity of Spanish covered bond supply, especially at the long end of the curve.

Banco Sabadell mandated leads on Tuesday for only the second Spanish Cédulas of the year which, by virtue of its rarity, is likely to be warmly received.

Santander opened order books for a perpetual non-call five year additional tier one (PNC5 AT1) on Tuesday and found ready demand, despite mounting anti-EU sentiment in French opinion polls and an early election being called in the UK.

Spanish plasma drug group Grifols wrapped up an all-debt refinancing programme on Wednesday as high yield spreads continued to tighten. But market participants warned that terms can hardly become even more issuer-friendly.

Private equity firm Black Toro Capital has invested €40m to finance an acquisition by a private company that will create Spain’s largest ice cream maker.

Crédit Agricole became the largest shareholder of Abengoa on Tuesday, after Banco Santander disclosed to the Spanish financial regulator the sale of most of its holding in the engineering group.