Spain
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Southern European lenders are back on the defensive as a European Central Bank inspection of non-performing loans drives a pronounced sell-off in equities and subordinated debt. -
As Abengoa approaches its late March deadline to avoid bankruptcy, this week the Bank of Spain began a round of checks on creditor banks’ compulsory capital provisions.
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Spanish low cost airline Volotea has declared its intention to float in Madrid, with one lead banker saying the oil price fall could help the deal succeed.
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Abengoa provided the first credit event auction of the year on Thursday and settled at a low price, after ISDA’s DC reached a split vote decision in December on the Spanish renewable energy company triggering a failure to pay trigger for 2014 credit default swap transactions.
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Alvarez & Marsal, the restructuring firm that handled Lehman Brothers’ bankruptcy, is set to deliver a scheme for Abengoa to avoid bankruptcy early next week. Bankers said the high yield market should cope whether the company survives or not.
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It has been a big week for the International Swaps and Derivatives Association. The organisation moved to overhaul its credit determinations committee rules and broaden its board representation at the same time as undertaking a widely watched first credit event auction of the year and heading into new territory with a Novo Banco CDS external review.
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Two sellers took advantage of a slightly upward trend in European markets on Wednesday to sell blocks of shares totalling €792m. Reassuringly to bankers, both deals got covered.
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The Iberian Peninsula was host to a duo of barnstorming sovereign benchmarks this week, but there was no consensus among bankers over whether they signified an appetite for sovereigns at the lower end of the European credit quality spectrum.
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A trio of Spanish issuers launched the first covered bonds of the year from southern Europe this week but, with peripheral spreads widening sharply, conditions are not conducive to further supply.
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Alvarez & Marsal, the restructuring firm that handled Lehman Brothers’ bankruptcy, is set to deliver early next week a scheme for Abengoa to avoid bankruptcy. Bankers say the high yield market should cope, either way.
