Santander looks back in anger and forward in hope 29 Jul 2020 Impairment charges produced a $12.5 bln first-half loss at the Spanish bank. It paid far too much for UK lender Abbey National back in 2004. The Latin American expansion looks smarter. With limited pandemic damage, boss Ana Botin might close the bank’s hefty 50% discount to book.
Strong takeover signal refills Cellnex’s war chest 23 Jul 2020 The acquisitive Spanish mobile mast company is raising 4 bln euros from investors. That will fund another 11 bln euros of potential purchases. With mobile operators selling more towers, competition increasing, and debt cheap, it makes sense for CEO Tobias Martinez to stock up.
BBVA’s green bond is the lightest shade possible 8 Jul 2020 The Spanish bank issued 1 bln euros of contingent convertible hybrid debt, with an environmentally friendly label. The perpetual and fungible nature of bank capital muddies the link to sustainable projects. Demand for such debt gives bankers reason to keep pushing the envelope.
Buyout firms make first move in EU telco shake-out 1 Jun 2020 KKR, Cinven and Providence are offering $3.3 bln for low-cost Spanish operator MasMovil. Stricter financial discipline may mean less of the cut-throat pricing that hurt rivals. After an EU court ruling on a nixed UK merger, it may also be the start of a new round of mergers.
Cable cowboy’s UK round-up puts Vodafone in corner 4 May 2020 U.S. billionaire John Malone is in talks to merge his Virgin Media broadband outfit with mobile operator O2. A joint venture could let Spain’s Telefonica, O2’s indebted parent, extract 4 bln pounds. Without a fixed-line partner in its home market, Vodafone faces a lonely future.
Investors are rightly wary of Santander’s strength 28 Apr 2020 Spain’s largest lender reported a 9% return on equity in the first quarter despite 1.6 bln euros of provisions against likely losses from Covid-19. Lower costs and robust capital will buoy boss Ana Botin. But a drawn-out recovery would justify the bank’s lowly valuation.
Spain finds risky fix for $1.6 trln EU virus fund 21 Apr 2020 Prime Minister Pedro Sanchez wants the European Union to issue perpetual debt to fight the Covid-19 crisis. Allocating funds as grants rather than new loans would ease the burden on indebted sovereigns. But using untested taxes may spook bondholders and northern member states.
Amadeus ups the bar for travel-sector crisis prep 3 Apr 2020 The $20 bln Spanish IT group is raising $1.6 bln in debt and equity to bolster its balance sheet. The financial terms are fairly beneficial for Amadeus, implying that it’s not exactly desperate for cash. Still, with steep declines in air traffic it’s wise to plan for the worst.
Corona Capital: GE, Oaktree, M&A back doors 1 Apr 2020 Concise views on the pandemic’s corporate and financial fallout. GE delivers its own form of cash injection, hedge fund boss Howard Marks praises heavy-handed Covid-19 responses, and a car-parts maker flirts with bailing on a deal.
Scrap bank dividends to help save the world 24 Mar 2020 Spain’s $39 bln Santander may pause 2020 payouts, freeing up capital to support lending amid the pandemic. A more radical move would be for banks to all cut 2019 dividends. Investors need cash less than virus-hit firms, and U.S. and European share prices already factor in a hit.
Short-selling bans are no cure for virus rout 13 Mar 2020 A pandemic-induced market crash prompted Spain and Italy to curb trading on some hard-hit local stocks. The measure, also used to protect bank shares in the 2008 crisis, looks rushed and won’t help much. Real panic selling rather than speculation is what’s roiling markets.
Spanish banks get slightly lighter loan albatross 3 Mar 2020 EU judges have ruled that local courts can resolve a dispute over unfair floating-rate mortgages. That could spare Spanish lenders billions of euros in potential losses. The catch is that the same loans are increasingly unprofitable as rates head south.
Spain tweaks the odds on Blackstone’s property bet 18 Feb 2020 The left-wing coalition led by Pedro Sanchez wants to control rents on residential property. The move may depress house prices, up by one-quarter since 2014 thanks to a booming economy. Investors like Steve Schwarzman’s firm may be tempted to take some chips off the table.
Only capital can fix Santander’s discount 29 Jan 2020 The Spanish lender’s return on equity fell in 2019 due to one-off costs, but it should do better this year. Still, the bank run by Ana Botin has yet to hit a 12% solvency target, which in turn lags European peers. Until it catches up, its lowly valuation will persist.
Santander CEO fiasco exposes banking’s fault line 16 Jan 2020 It’s a year since chair Ana Botin reversed her decision to make UBS executive Andrea Orcel the Spanish group’s boss. Misgivings about pay and management style were rooted in the gulf between wholesale and retail lenders. A 112 mln euro lawsuit will lay bare the culture clash.
IAG dealmaking will outlast Willie Walsh 9 Jan 2020 The Irishman is disembarking after nine years at the helm of the BA and Iberia owner. The holding structure he led from its birth has been more successful than Air France-KLM and makes it easier for his successor to go shopping, say for a carrier that flies to South America.
Telefonica’s self-activism is half a turnaround 28 Nov 2019 The Spanish phone firm is trying to revive its flagging fortunes before somebody else makes it. Carving out the sprawling and sluggish Latin American operations makes sense, if it leads to a sale. A real activist would demand more clarity on disposals, growth forecasts and costs.
Euronext’s Spanish journey looks tortuous 22 Nov 2019 Stephane Boujnah, the exchange’s acquisitive boss, may try to trump Swiss rival SIX’s 2.8 bln euro bid for Madrid-based peer BME. A higher offer may clinch the deal, but would test Euronext’s financial discipline. Appeasing local politicians would also come at a cost.
Swiss bourse buys costly ticket to EU trading room 18 Nov 2019 Zurich-based exchange operator SIX is offering 2.8 bln euros cash for Spain’s BME, which is also being courted by rival Euronext. Building up scale makes sense. But extracting savings to justify the 34% premium may be challenging. It’s an expensive way to gain an EU foothold.
Spanish instability numbs markets into complacency 11 Nov 2019 Bonds and stocks barely budged after Prime Minister Pedro Sanchez failed to win a majority in national polls. Forming a government will likely mean striking a deal with far-left and pro-Catalan parties. With growth slowing and high debt levels, it’s hard to square investor calm.