Spain

Spain’s formation on Monday of a Socialist-led coalition government, even one with no parliamentary majority, has opened the way for the country to press ahead with launching its first green bond. The deal of about €5bn is likely to be syndicated in the second half of 2020, and could prove one of the prize mandates of the year for banks to compete for.

Enagas, the Spanish natural gas transmission company, raised €500m of new capital market on Wednesday night to help fund its acquisition of a stake in US firm Tallgrass Energy.

Merlin Properties, the Spanish real estate investment trust, launched on Wednesday a €500m no-grow 15 year benchmark bond, rated Baa2/BBB, with a positive outlook from S&P Global.

Investors have embraced the bonds of smaller European financial institutions this year, as they search for higher returns in an environment where interest rates are expected to remain low for a long time.

Grupo Corporativo Landon, a vehicle for the Gallardo family, has sold €167m of shares in Almirall, the Spanish pharmaceuticals company, to increase the free float of the stock on Spain’s stock exchanges.

BBVA and DNB Bank were both looking to build towards their minimum requirements for own funds and eligible liabilities (MREL) in the euro market on Thursday, eschewing non-preferred senior issuance in favour of the cheaper preferred senior format.

Santander Consumer Finance (SCF) had plenty of momentum in its order book as it looked to extend its maturity curve in the preferred senior bond market on Wednesday.

The first tier two from Spain’s Unicaja Banco was more than three times subscribed this week after it entered a strong new issue market. It appeared alongside ING, which paid a slim 5bp premium to print a deal in the same asset class.

A flurry of new deals this week had issuers having to compete for investors’ attention. Bankers said that higher yielding deals were much easier to sell, with non-preferred senior bonds from Bankia and Lloyds Banking Group proving more popular than a tighter print from Belfius.

Spanish paper company Lecta moved closer to its restructuring on Friday, as the majority of its bondholders signed a lock-up agreement to swap debt for equity. The deal replaces €600m of 2022 and 2023 notes with new senior and junior notes and equity in the company.

Cellnex, the Spanish telecommunications company, has closed the books on its cash call to fund its acquisition of Arqiva's tower business, attracting huge levels of demand for shares.

Spanish banks are using strong market conditions to their advantage towards the start of November, with Banco de Sabadell completing its annual funding plans this week and UniCaja Banco getting ready to launch its debut tier two transaction.