In one day banks and companies raise 43% of 2012 debt

It was costly to do, but they did it with aplomb. Spain just completed its first major private debt issue during which most debt was sold to Spanish companies and banks. If positive signs were seen during the past week, a confirmation that these signs were true came yesterday. Two banks (BBVA and Banesto) and two companies (Telefónica and Repsol) were able to get a total of 4.25 billion euros in financing. That is to say, in just one day, Spain raised 43.5% of all the funds it has raised this year.

The banks' ability to finally get financing is critical. After surviving a month of completely dry credit markets, something that has not happened since 2008, Spanish banks have gained access to credit markets in February. Santander was the first to move. On February 1 the bank issued 2 billion euros of 3-year real estate debt. Sabadell followed in Santander's footsteps, issuing 1.2 billion of similar debt. Yesterday, BBVA and Banesto proved that investor appetite for Spanish financials is alive.

Foreign demand

BBVA, led by Francisco González, was able to sell high-quality senior debt. During the last few months, in particular ever since BBVA issued its senior debt in October, this product was vetoed by Spanish lenders. But BBVA pushed forward anyway and sold 2 billion shares of 18-month notes, 80% of which will end up in the hands of foreign investors.