Spanish companies and entities are turning to oil the rusty machinery, which remained in disuse in recent years. There are names such as the telephone service Atento or financial institutions Bankia and Civic Banking in grill. The development, however, runs the risk of encountering a potentially insurmountable difficulty: the high-risk premium of Spain.
That is, the additional interest that the market demands to the Spanish 10-year bonds on the Germans with the same maturity, which now stands at 228 basis points, or 2.28 percentage points above the 125 basis points from a year ago and 10.3 basis points reached just before the official outbreak of the crisis in August 2007. Market sources admit that all companies that intend to jump to the ring not only focus their attention on designing the operation, but also in the evolution of this risk thermometer.
The higher up, the harder it will be the placement and, especially, the lower the valuation of the company by the market. The key is to define the threshold at which companies would be forced to alter its agenda and postpone the move while waiting for better times. "Valuing the current situation, I understand that the magic number that would postpone the IPO would be from 300 basis points, excessive levels that should force companies to wait".
A good price to make them easier would be levels below 150 basis points, "calibrated Rafael Romero, Chief investment officer of Unicorp Patrimonio. The alarm, therefore, it would go off if it returned to the levels of late November, when tightened to 283 basis points after Ireland?s rescue. This close precedent, coupled with the fact that it stays above 200 points, explains the current misgivings, especially among companies that will be privatized and entities, as their need to go public to raise funds is more pressing.
Other cases, such CaixaBank and DIA placements, which will occur in early July, have a clear path, as the first will occur with an exchange of shares and the second is a listing (private placement).
