Spanish Sovereign
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The funding needs of Spain’s regions are expected to rise this year. The coronavirus pandemic is stretching healthcare resources, which are funded at a regional level, and will require financing, according to debt capital markets bankers. -
The European Investment Bank achieved its biggest ever order book in euros on Tuesday, as it sold its first seven year benchmark of the year.
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The region of Madrid and the European Investment Bank are both marketing seven year euro deals, with the former preparing the first green labelled bond by a Spanish government entity. Elsewhere in the euro public sector bond market, Ontario Teachers’ Finance Trust is moving forward with its first bond in the currency.
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Any concerns over whether the eurozone periphery would have market access after Bund spreads yawned wider during the past week were put to bed by a combined €31bn of borrowing from Italy and Spain. The sovereigns paid what was needed to put impressive dents in their ballooning funding requirements, ahead of a hotly anticipated European Council meeting on Thursday. Lewis McLellan and Tyler Davies report.
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Madrid is preparing to sell its first green labelled bond as early as next week, expanding on its established reputation as a sustainable bond issuer.
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Spain enjoyed enormous demand for a 10 year syndicated bond on Tuesday, with an order book which was almost double the previous record for a single tranche euro public sector benchmark. Bankers away from the deal said investors were attracted by the big new issue premium on offer.
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Italy mandated banks for a new five year to be sold alongside a tap of a September 2050 bond on Monday as it prepares to bolt on a bigger funding programme in order to fund its effort against the coronavirus pandemic. The sovereign will be joined by Luxembourg in the euro public sector bond market on Tuesday.
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Trading levels given are bid-side spreads versus mid-swaps and/or an underlying benchmark and bid-yields from the close of business on Monday, March 30. The source for secondary trading levels is ICE Data Services.
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Spain led the way back into primary bond markets in no uncertain terms this week, raising a staggering €10bn of seven year cash and demonstrating that, in spite of the worst bear market in history, investors are still happy to buy at the right price. Pablo de Ramón-Laca Clausen, director-general of the Spanish treasury, talked to GlobalCapital about the experience.
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The primary public sector bond market came back to life on Tuesday as a pair of sovereigns and the European Investment Bank sold deals alongside German states. But it was far from a case of picking up where they left off as borrowers were made to pay new issue premiums of up to 20bp versus the secondary market levels on screens.
