Spain

A group of retail equity and bond investors in Abengoa are preparing to file a civil lawsuit in Spain — but hope a class action in the US will speed up proceedings.

Spain shaved around 30bp from its long end borrowing costs on Thursday — just a few hours before its yields jumped after the European Central Bank disappointed market participants expecting a strong dose of monetary easing.

The question of whether Abengoa has triggered a credit event will set a precedent for future Spanish rulings say lawyers, as ISDA’s Determinations Committee grapples with recently amended Spanish laws.

Holders of credit default swaps referencing Abengoa have asked the International Swaps and Derivatives Association for the second time in a week whether the Spanish renewable energy company has triggered a bankruptcy credit event – and this time the ISDA has accepted the question for consideration.

Abengoa is swimming for its life, but looks likely to sink beneath the waves of debt. Already, hindsight is beginning to make this look like an outcome everyone should have seen coming.

Banks, investors and even the Spanish and US governments are bracing themselves for a long and bruising battle to restructure Abengoa, the Spanish renewable energy group likely to enter a pre-insolvency period on Friday.

Abengoa's banks refused it a vital $1.5bn of new loans over the past fortnight, causing its rescue investor Gonvarri to pull out, sources said today. But Abengoa could yet avoid bankruptcy, they argued.

Holders of credit default swaps referencing the Spanish renewable energy company have asked the International Swaps and Derivatives Association (ISDA) whether there has been a bankruptcy credit event. But Abengoa had not yet formally requested bankruptcy protection as GlobalCapital went to press.

It may be late November, but equity capital markets are still busy with a stack of high profile deals, even now that last week's four Greek bank recapitalisations are out of the way. Abengoa's rights issue now looks unlikely to go ahead, as the company's woes have deepened.

CVC Capital Partners sold its last shares in Abertis Infraestructuras, the Spanish toll roads and telecoms infrastructure company, on November 19 in an €818m block trade that gave Bank of America Merrill Lynch’s league table standing a big boost.

Deutsche Bank’s Spanish subsidiary issued its first publicly placed Cédulas Hipotecarias on Tuesday, setting a strong foundation for a further €3bn that it hopes to sell.

The European Central Bank has given its strongest hint yet that it could introduce more monetary easing in December, as eurozone periphery issuers enjoyed falling yields and strong demand.