Banc Sabadell places €1 billion in five-year covered bonds in less than two hours

Barcelona (ACN).- The Catalan Banc Sabadell has issued debt securities for €1 billion that attracted a demand of €3.4 billion from institutional investors. As other multinational companies such as CaixaBank and Gas Natural Fenosa did this week, Banc Sabadell is profiting from the lower spread in order to obtain liquidity at much better conditions than it would have done a few months ago. In fact, the covered bond issue operation has been a success, as it was completed in less than two hours due to the high demand. The Catalan private bank has obtained a spread of 250 basis points over the midswap rate, which is a better interest rate than that obtained by the Spanish Treasury in its recent operations. The main investors have been financial institutions, central banks, investment and pension funds and insurance companies, operating on the international financial markets. The payment will be made on the 23^rd of January. The underwriters selling the bonds were Deutsche Bank, Santander, JP, Calyon and Banc Sabadell itself.

The operation has confirmed the trust international financial markets have in the second largest Catalan bank, after the Spanish banking giant CaixaBank. In fact, in the independent stress tests made on the entire Spanish banking system in the spring and summer of 2012 by Oliver Wyman and Roland Berger, Banc Sabadell was one of the banks that would survive the worst-case scenario without needing any extra funds. The detailed results of the audit made by Oliver Wyman, in collaboration with KPGM, Deloitte, PwC and Ernst and Young, which were released in late September, showed that Banc Sabadell had a €915-million reserve to help them resist the most extreme, and very unlikely, worst-case scenario.

After the positive news, Banc Sabadell aimed to consolidate its position within the Catalan retail banking business using the strategy of expanding its activities beyond its traditional corporate banking business. With this aim it purchased Caixa Penedès, a decision announced a month ago. The agreement represented the incorporation of 900,000 new clients, reaching a total number of 6 million clients in Europe and the Americas. It also included additional investments in loans for some €10.6 billion and client deposits for €7.9 billion, as well as 462 branches to be added to Banc Sabadell’s existing network.