Spain

Profits at Santander’s global corporate banking arm fell as the bank faced higher costs developing new franchises.

Banco Sabadell attracted exceptionally strong demand for its second covered bond of the year. Higher-rated Cédulas have rarely offered a spread over Spain since 2011, but this deal did, which made all the difference.

Abengoa, the Spanish renewable energy company, suffered yet another unsteady trading session on Thursday over revelations in a leaked KPMG report of a €250m cash deficit.

Energía & Celulosa (Ence), a Spanish producer of eucalyptus pulp and biomass energy, opened a roadshow on Wednesday for €250m of bonds, in a high yield market that bankers see as slowly reviving.

Spain’s nine month borrowing costs dropped to a euro-era low of minus 0.6bp at an auction on Tuesday, amid signs of investor pushback against negative yields.

Greece’s yields screamed lower on Monday despite reports that the country’s creditors are unhappy with its government’s reform efforts. Meanwhile, Cyprus could bring a bond after completing a roadshow last week.

Uncertainty over the make-up of the Portuguese government following an inconclusive election is playing havoc with the sovereign’s yields — but analysts warned it is not alone in suffering from potential political risk.

Bank of Ireland and Caja Rural Unidas issued this week’s only two covered bonds from Europe’s periphery, both offering attractive concessions.

Spain took itself over the 90% mark of its reduced 2015 funding programme with an auction where yields fell across the maturity curve.

Caja Rurales Unidas issued a €750m five year deal on Thursday, building a slightly oversubscribed book in a short time frame by offering a relatively attractive new issue premium.

Santander and BBVA both looked to the dollar market to secure senior funding on Tuesday amid a bare session for European FIG issuance.

Portugal is underperforming its nearest peers in the eurozone periphery ahead of a debt auction later this week, amid tense talks to form a government for the country.