MADRID: Spanish firms are dashing into the bond market, taking advantage of a fall in interest rates after the European Central Bank pledged action to reduce the country's financing costs, and eager to move quickly in case the situation deteriorates again.
Power firms Gas Natural and Iberdrola were testing investor appetite on Monday after Telefonica's successful bond issue last week, while banks BBVA and Banesto followed a stellar issue by Santander.
Other Spanish companies could soon try to follow their lead, debt traders said.
"It's not just that costs have come down, there's also more willingness to buy corporate debt as shown by Telefonica last week ... and we could see more corporations joining the trend in the next few days," a Spanish debt trader said.
Telefonica issued 750 million euros in five-year bonds on Wednesday, joining other companies based in peripheral European economies to break an issuance freeze thanks to improving credit conditions.
The former Spanish monopoly, struggling with a dismal home market and a 57 billion-euro debt pile, set a 5.811 percent coupon on the Sept. 5, 2017 bonds.
"The companies are taking advantage to improve their liquidity risk, which had increased considerably in recent months," another debt trader said.
"I think we're going to see more issuances especially if today's deals are closed successfully, which is how it's looking now," he said.
The yield on Spain's benchmark 10-year sovereign bond hit a five-month low on Monday, with investor sentiment buoyed by European Central Bank bond-buying plans.
However, further falls were seen capped by uncertainty over when Madrid would seek aid to trigger the scheme, propelling Spanish companies to hit the bond market before it was too late.
Iberdrola was pricing a 750 million euro five-year bond at a reference price of around 360 basis points over mid-swaps on Monday, a source involved in the issue said, with pricing by Gas Natural, BBVA and Banesto expected later in the day.
indiatimes.com
Power firms Gas Natural and Iberdrola were testing investor appetite on Monday after Telefonica's successful bond issue last week, while banks BBVA and Banesto followed a stellar issue by Santander.
Other Spanish companies could soon try to follow their lead, debt traders said.
"It's not just that costs have come down, there's also more willingness to buy corporate debt as shown by Telefonica last week ... and we could see more corporations joining the trend in the next few days," a Spanish debt trader said.
Telefonica issued 750 million euros in five-year bonds on Wednesday, joining other companies based in peripheral European economies to break an issuance freeze thanks to improving credit conditions.
The former Spanish monopoly, struggling with a dismal home market and a 57 billion-euro debt pile, set a 5.811 percent coupon on the Sept. 5, 2017 bonds.
"The companies are taking advantage to improve their liquidity risk, which had increased considerably in recent months," another debt trader said.
"I think we're going to see more issuances especially if today's deals are closed successfully, which is how it's looking now," he said.
The yield on Spain's benchmark 10-year sovereign bond hit a five-month low on Monday, with investor sentiment buoyed by European Central Bank bond-buying plans.
However, further falls were seen capped by uncertainty over when Madrid would seek aid to trigger the scheme, propelling Spanish companies to hit the bond market before it was too late.
Iberdrola was pricing a 750 million euro five-year bond at a reference price of around 360 basis points over mid-swaps on Monday, a source involved in the issue said, with pricing by Gas Natural, BBVA and Banesto expected later in the day.
indiatimes.com
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