The Bank of Spain has learned its lesson. After failing in its first attempt to go public with the Caja de Ahorros del Mediterráneo (CAM), they are now improving the deal process by offering potential buyers a guarantee that would cover any losses related to potential insolvency issues that could arise in the future.
As some of the lenders who are interested in the deal and having preliminary discussions with the Bank of Spain assured, the CAM could have realized that an intervention that is weak and lacking an Esquema de Protección de Activos (a share protection plan that was denied at first) for the prospective buyers is bound to fail.
What happened during April, when the Japanese investment bank Nomura circulated a sales brochure among several Spanish lenders, showed that none of the prospective buyers were prepared for possible surprises tucked under the rug. Even though discounts offered at that time were not particularly attractive, the absence of the EPA's offer to give certain guarantees related to the deal was still a critical factor for why it did not go through.
