Spain

Equity capital markets bankers were taking stock of a big move down in equity markets on Monday as Covid-19 infection rates rose in Europe and the UK government signalled the imposition of social restrictions to combat the disease. That has focused minds on deal execution, particularly the rights issue of IAG, which was set to close this week.

Spain, which is said to be readying a 10 year deal will have to contend with S&P's decision to change its ratings outlook for the country to negative on Friday. However, its secondary curve has not been badly affected.

Spain is looking to follow hot on the heels of the soaring demand Italy attracted this week with its own syndicated bond which could come as soon as next week in what is likely to be a busy one for new issues ahead of the European Union’s re-entry as a jumbo borrower, according to SSA bankers.

Bankia and CaixaBank have opened a new chapter in Spanish bank consolidation, having announced that they are undergoing preliminary discussions about a merger. Analysts welcomed the development and believe that it will mark an important test for consolidation in the Spanish banking sector.

Senior deals from Banco de Sabadell and Mediobanca underlined the pricing benefits of printing in green formats this week, with both coming inside conventional curves. Other issuers could be tempted to follow.

Banco de Sabadell on Wednesday looked to replicate the success of Mediobanca earlier this week in capitalising on appetite for green bonds. Appetite for the Spanish lender’s inaugural green preferred senior bond led it to print the deal through fair value.

Spanish telecommunications infrastructure company Cellnex has finished its €4bn rights issue to fund further M&A opportunities, with an extremely high oversubscription.

Spanish Cédulas reform has been widely anticipated for years. However, whether Spain is ready to execute the sweeping reforms necessary to bring the regime into line with the European Union’s covered bond directive remains to be seen, as the impact of the coronavirus risks diverting attention.

Energias de Portugal, Portugal’s largest utility, closed its cash call in Lisbon on Friday with 93.8% of shareholders taking up their rights. However, the company attracted demand worth 256% of the €1bn offering. Market watchers hope the result augurs well for Spanish telecoms operator Cellnex's rights issue on Thursday.

Spain has submitted an application for more than €20bn from the EU’s Support to Mitigate Unemployment Risks in an Emergency (SURE) fund.

Covered bond issuers using programmes containing a special purpose vehicle (SPV) have more guidance on the treatment of bad loans and protect bondholders further compared with those using integrated templates, Fitch said this week when assessing the risk coronavirus era mortgage payment holidays pose to the asset class.

IAG, the airline holding company which owns British Airways, has launched a €2.75bn (£2.49bn) rights issue to give it enough liquidity to withstand Covid-19 disruption until 2023.