http://www.ifre.com/...ital-peripherals-storm-market/21061280.articleBanco Popular Español took advantage of the risk-on environment at the start of 2013 to continue its rehabilitation in capital markets following a rights issue late last year.
The Spanish lender attracted a modest book of over €1bn for its 2.5yr senior unsecured bond on Tuesday. The reoffer yield was set at 4.125%, in line with initial guidance of 4.125% area, and equivalent to around 362bp over mid-swaps. The deal - which could be up to €750m in size - is being led by Banco Popular, Deutsche Bank, Santander and UBS.
One banker on the deal cited the Spanish government bond curve, as well as national champions Santander and BBVA, as the pricing points. On this basis, the banker said Banco Popular offered a spread pick-up of around 120bp.
“It’s been a busy issuance day, but people recognise the value in Banco Popular post the rights issue,” a syndicate banker on the deal said. “It is a recovering credit story, and people see value in picking up paper at 4.125%.”
When the bond had attracted only €750m of orders by mid-morning, one observing banker said he was surprised that the deal had not been more sought after. In particular, he contrasted it with this morning’s five-year senior bond from Portuguese lender Banco Espirito Santo, which attracted orders of €3bn and priced at 4.9%.
“The Popular bond should do extremely well, it looks very good value,” said the banker. “BES looks a bit more expensive in relative terms, so you’d think Popular would do better as it’s a Spanish name.”
BBVA is the only other Spanish lender to issue this year. It opened the European FIG market with a €1.5bn five-year deal last week, which received a deluge of €5.5bn orders.
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