The fight for promissory notes within the financial sector has worsened and become a major struggle to find liquidity before markets close. The situation resembles the deposit war from earlier this year.
A major group of Spanish banks has launched this kind of product in the markets in order to obtain more than 66 billion in branch offices, but also to individual investors such as wealthy individuals and companies. The last to become involved in the war are CatalunyaCaixa and Duero-España, who yesterday introduced their programs designed to source 2.1 and 5.0 billion, respectively.
The majority of the promissory notes currently offer yields less than 4%, yet some well-established savings banks have pushed this number to 8%. Cajatres has done so, but without offering the deal to individual investors.
CatalunaCaixa is paying up to 5% as a function of cost and the maturation period, while Duero-España is offering a maximum of 4% acording to the Comisión Nacional del Mercado de Valores (CNMV), the agency in charge of supervising and inspecting the Spanish Stock Markets and the activities of all the participants in those markets. The Catalonian lender's offer entails a renovation of a previous program and exciting, because it has been recently nationalized to receive 1.72 billion euros in exchange for 90% of its capital.
The hermetic closing of major markets for Spanish lenders, with the exception of small issues of bonds to the biggest firms, have forced the sector to look for alternatives for finding money with which to cover their receipts payable during the next few months. By the end of 2012, the major group of Spanish banks has to face debt agreements worth nearly 120 billion. This amount will increase to 200 billion by the close of 2013.
Since May, not one bank or savings bank has been able to access markets freely in order to increase their liquidity. From when the crisis began until now, this has been one of the longest periods of drought the financial markets have seen.
