Sabadell Launches €1,000M 5-Year Bond Issue

28 October 2015 – Cinco Días

Banco Sabadell has issued 5-year mortgage bonds amounting to €1,000 million, with a coupon of 0.625%, after applying 0.48 percentage points to the midswap index (the interest rate on risk-free money over a certain period). Commerzbank, Goldman Sachs, Lloyds Bank and Société Générale were the underwriters of the issue.

Sabadell initially planned to place €750 million, but requests were received for €1,500 million, and so the company decided to increase the volume. Sources close to the placement also highlight the quality of the orders.

The requests have been made by more than 80 international investors. Sources at the underwriting banks explain that Sabadell has become “the first bank in the south of Europe capable of undertaking an issue amounting to €1,000 million; in recent weeks, the maximum size has been €750 million”.

This bond issue comes a week after Cajamar completed its own debt issue, also placing 5-year mortgage bonds. That issue amounted to €750 million, whereby exceeding its initial objective of €500 million.

Cajamar set the placement price of the issue at 80 basis points above the midswap index (the benchmark rate for long-term issues) to offer a fixed annual coupon of 1% and a yield for investors of 1.22%. The underwriters in that case were Santander, JP Morgan, Natixis, Nomura and Deutsche Bank.

Original story: Cinco Días

Translation: Carmel Drake

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