Four Spanish savings banks are set to sign a euro2 billion ($1.9 billion) Euro-MTN programme. It is the first facility in the market that allows issuance by multiple independent issuers. Caja Monte de Piedad y Caja de Ahorros de Huelva y Sevilla, Caja de Ahorros Provincial San Fernando de Sevilla y Jerez, Caja General de Ahorros de Canarias and Caja de Ahorros y Monte de Piedad de las Balears (the cajas) are all named off the shelf which has been jointly arranged by BNP Paribas and CECA, the association of the Spanish savings banks. Once the documentation is in place other savings banks will be able to join the programme as issuers and as a result the ceiling will be raised. With 50 such banks in Spain, the potential for the growth of the facility is large. Spanish cajas have historically funded themselves via domestic markets. The Euro-MTN vehicle will reduce funding costs and increase name recognition. But no public inaugural is planned. Roberto Aleu Sanchez, head of capital markets at CECA and spokesman for the cajas, says: "These banks have already been doing private transactions in some European markets so it is likely that they will continue to do that. But public deals are going to be important." The cajas are entering a crowded sector but Sanchez says: "The cajas can show good profitability and a strong return on equity. And most of them will be a new name for the market which is attractive to investors." The cajas can issue through Cayman Island SPVs and they could also have the guarantee of Aa3-rated CECA, at the association's discretion. The dealers are the two arrangers, ABN Amro, Bayerische Landesbank, Deutsche Bank, Morgan Stanley Dean Witter, Salomon Smith Barney, SG, and Swedbank. The four issuers are all rated A-minus for their long-term debt by Fitch IBCA.
July 28, 2000
