Banco Santander announced an issuing of 1 billion euros in Spanish regional debt that was supposed to have closed last week. Until now, all was normal. What the bank didn´t count on was that at this amount, the involved banks would have to take on half the debt.
Close sources at The Wall Street Journal confirmed that interest in the deal was so weak that only 500 million could be placed with investors. As a result, the banks managing the deal were faced with absorbing 100 million euros for themselves.
The same sources say that people close to the deal are calling it a "disaster" and have said that some of the firms considered abandoning the placement, because the buyers? lack of interest in the shares would have spread a lot of sovereign risk within the euro zone.
Finally, the banks came to an agreement to close their pockets so that the transaction could be completed. Besides Banco Santander, other involved banks were Commerzbank, HSBC and Société Générale.
Edited in English by Brandon Dyches and Jose L. de Haro (for comments contact: joseluisdeharo@eleconomista.es)
