Tag: mid-swap rate

Merlin Raises Issues 12-Year Bonds Worth €300M

12 September 2017 – Expansión

Merlin Properties has returned to the capital market, taking the Socimi‘s visits so far this year to two. Yesterday, it managed to raise €300 million from the issue of 12-year bonds, in an operation for which it offered a coupon of 2.375%

To effectively manage the placement, Merlin engaged the services of Morgan Stanley. The issuance received robust demand, which allowed the firm to reduce the cost from 150 basis points above mid-swap (the reference rate for the placement of fixed income bonds in euros) considered initially, to 140 basis points above mid-swap.

This is the fifth issue that Merlin Properties has undertaken since its constitution. The first three, for a cumulative sum of €2,350 million, were carried out in 2016. This year, the Socimi has already raised €900 million.

According to the company, the funds raised will be used to early repay its mortgage debt, as well as for “general corporate purposes”. Merlin is the fourth non-financial company to resort to the debt market after Telefónica, Iberdrola and Cortefiel.

Original story: Expansión (by A. Stumpf)

Translation: Carmel Drake

BBVA Places €1,250M 7-Year Mortgage Bond Issue

9 March 2016 – Cinco Días

On Tuesday, BBVA launched a 7-year mortgage bond issue, amounting to €1,250 million, at a price of 52 basis points above the mid swap rate, the reference rate for this kind of placement.

The operation was well received, with demand amounting to €2,700 million, according to market sources. That drove down the price from 60 basis points first thing, to the aforementioned spread of 52 basis points above the reference rate. The figure represents the cheapest price at which any Spanish bank has placed debt so far this year.

By geography, 41% of the debt was placed with German and Austrian investors; 18% was placed with Spanish investors; 10% with Norwegian investors; 9% with investors from France and the Benelux countries (Belgium, the Netherlands and Luxembourg) and 8% with Italian investors.

In addition, another 4% of the debt was placed with investors in Europe; another 3% in the UK and Ireland; and another 2% in Switzerland. By type of investor, the main buyers were central banks and official bodies (37%); followed by fund managers (27%); insurance companies and pension funds (18%) and banks (17%).

The banks that acted as the underwriters of this debt issue were BBVA itself, as well as Citigroup, Crédit Agricole, Lloyds Bank and Sociètè Gènèrale.

BBVA already issued €1,000 million in 5-year mortgage bonds during the first few days of the year. This type of issue has been very popular in recent times. Also in January, Bankia issued €1,000 million in 5-year bonds; Santander placed €1,000 million in 10-year bonds; and the Spanish subsidiary of Deutsche Bank issued €500 million in 7-year bonds.

Meanwhile, CaixaBank issued another €1,500 million in 7-year bonds at the beginning of February and Banco Popular followed suit later that month with the issue of €1,500 million in 7-year bonds.

Original story: Cinco Días

Translation: Carmel Drake

Popular Places €1,500M 6-Year Mortgage Bond Issue

26 February 2016 – Cinco Días

Banco Popular has issued €1,500 million in mortgage bonds with a six year term and a price of 88 points above the mid-swap rate. Demand for the bonds has exceeded €2,800 million, according to market sources.

This is the first debt issue that the entity led by Ángel Ron has completed in 2016. Last year, the bank issued debt amounting to €5,050 million in total.

Popular’s most important debt issuances in 2015 included: the issue of senior debt amounting to €500 million, of which 74% was acquired by international investors; €3,000 million in bonds with interest rates that were “historically low” for the entity; and €750 million in Additional Tier 1, which was placed entirely with qualifying international investors within just a few hours.

Original story: Cinco Días

Translation: Carmel Drake

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

5 November 2015 – Expansión

The financial sector is issuing debt once again, with the launch of five-year mortgage bonds by the Catalan entity CaixaBank. Yesterday, the bank issued bonds amounting to €1,000 million after receiving demand for almost €1,900 million, which allowed it to reduce the price of the operation. Thus, the debt placement closed at 43 basis points above the mid-swap rate, the reference index for this kind of operation. The initial price ranged between 45 and 47 basis points.

“The strength of the demand has allowed us to narrow the initial spread by almost 4 basis points, placing the coupon at 0.625%”, said CaixaBank yesterday. 72% of the demand came from international investors, from 20 countries. The entity already issued another €1,000 million of mortgage bonds during the first quarter of the year; in that case the bonds had a ten-year term. CaixaBank, Crédit Agricole, Credit Suisse, HSBC and Deutsche Bank were the underwriting banks.

Original story: Expansión

Translation: Carmel Drake