Spain

Abengoa avoided triggering a bankruptcy credit event on Tuesday by only a single word change in legal documentation after ISDA spent more than a week boggling over Spanish laws and its own credit derivative definitions. But as GlobalCapital went to press, the firm looked to be on the brink of triggering a failure to pay credit event instead, having acknowledged it had missed commercial paper repayments. Dan Alderson reports.

The movement of one word – 10 places to the left – in ISDA’s credit derivative definitions was the determining factor in the trade body deciding that Abengoa had not triggered a bankruptcy credit event for most of its credit default swaps.

Repsol, the Spanish oil producer, issued a €600m five year 2.125% bond today, in a torrid week for commodity markets, to finance a buyback of some Talisman Energy bonds.

Abengoa’s decision to seek insolvency protection is a bankruptcy credit event trigger for some credit default swaps referencing the company but not others, ISDA’s Determinations Committee has ruled.

Nomura’s Lorenz Altenburg is set to join CaixaBank in January, where he will head the firm’s fixed income syndicate in its recently established Corporate & Institutional Banking (CIB) division.

ISDA’s Determinations Committee on Friday delayed for the third time making a decision on whether Abengao has triggered a bankruptcy credit event, saying it needed more information.

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.