Spain's Electricity Deficit Amortisation Fund (FADE) placed a new €1.5bn 5-year bond issue on March 11th. It is the fourth transaction with FADE that BBVA Corporate & Investment Banking has led since November 2012.

BBVA has acted as Joint Bookrunner together with Credit Agricole, Goldman Sachs and HSBC. This bonds issue is designed to transfer to the Spanish Administration the debt accumulated by power companies due to the difference between the costs and the system regulated revenues, and has being allocated under better conditions than FADE's latest issues.

The issue has benefited from improved risk perception of peripheral countries by investors. The large number of investors who were interested in the offer, with a final participation of more than 110, and their excellent quality, with a large presence of stable investors, allowed FADE  to successfully price the transaction at 43bps over Spanish Treasury bonds, whereas the average spread in all its issues during 2012 was 73bps over the sovereign debt bonds.

The total demand was recorded at 2,160 million euros. The debt has been placed primarily in Europe. Spanish investors demand led with 70% of the bonds, followed by UK (9%), Germany (8%), Switzerland and Italy (4%). According to the type of investor, most of the demand was covered by banks (42%) and investment funds (41%).