MADRID Jan 9 Lender Caixabank and
utility Gas Natural both issued bonds on Wednesday,
becoming the latest Spanish names to tap improved sentiment
towards struggling euro zone economies.
Spanish corporates were shut out of international debt
markets for much of 2012 while investors worried over their
exposure to a battered domestic market and, in the case of
banks, rising bad loans as the euro zone debt crisis rolled on.
Caixabank, Spain's third-biggest lender, saw good demand for
a 1 billion euro ($1.3 billion) three-year bond set to be priced
at midswaps plus 285 basis points, or just under 3.4 percent,
reported IFR, a Thomson Reuters news and analysis service.
Gas Natural gave a guide price of midswaps plus 230-235
basis points for a 600 million euro 10-year bond, around 100 bp
lower than 10-year government bonds yielding about 5.1 percent.
"There is a window of opportunity which many companies and
banks are going to try to use ... They are coming back (into the
bond market) very strongly," RBS analyst Alberto Gallo said.
"But even so, European banks and corporates are issuing less
overall. It is important to note this is not to increase debt
but to refinance. Banks are shrinking their balance sheets."
BBVA, Spain's second-largest bank, was the first
European corporate to test debt markets this year when issuing a
1.5 billion euro five-year bond last Thursday at a similar price
to five-year government debt now yielding about 3.85 percent.
On Tuesday, Telefonica, Spain's largest telecoms
company, raised 1.5 billion euros at a 4.0 percent yield, while
lender Popular issued a 750 million euro 2.5-year bond
at a yield of 4.125 percent.
Elsewhere on Wednesday, engineer Abengoa issued a
250 million euro six-year convertible bond.
A pledge in September by the European Central Bank to buy
the debt of any country which requested aid helped create a
backstop for bets against Spain. While the government has not
made any sovereign rescue request, the yield on 10-year
government bonds has fallen from a peak at 7.6 percent in July.
Broker Renta 4 said the improved sentiment could be
short-lived with Spain expected to remain in recession for the
rest of the year and likely to say it has missed its 2012
"We hope more groups take advantage of this opening in the
markets, especially when you take in to account the expected
restart of tensions on potentially bad news in the future,"
Renta 4 said in a note.
Spain itself has also been keen to take advantage of the
easing risk premium, with state-backed electricity deficit fund
(FADE) testing appetite for a new March 2017 bond at around 60
basis points above government bonds on Wednesday, IFR said.
The treasury plans to issue up to 5 billion euros in three
bonds on Thursday, in its first visit to the market this year.
($1 = 0.7654 euro)
(Editing by Dan Lalor)