Both corporates and public sector in Spain are taking advantage of the opportunity brought by a lower risk premium and the better confidence that markets are showing to look for funding at debt capital markets. BBVA Corporate & Investment Banking has also taken advantage of this increased level of activity in DCM by acting as Bookrunner in several transactions within the first weeks of the year: Spanish Treasury, FADE (Electric Deficit Amorization Fund), Bankinter, Gas Natural, Ferrovial and Madrid's Government among others.

Following BBVA's debt issuance on January 3rd, Government of Spain, some regional governments and many firms have taken advantage of stable market conditions coupled with investors' craving for yield in this start of the year to launch very successful issues at the Spanish debt capital market.

Spain's Government issuance has become an extraordinary milestone that has caught most market attention in recent days since it is the first syndicated auction since February 2012. Orders for this €7bn 10-year bond issuance were three times its initial offering, registering orders for €23bn in less than three hours. Spanish yields fell to 5.4%, less than originally expected. BBVA was one of the six underwriters of this issue, in which the 60% of the participants were foreign investors, mainly from UK, demonstrating the recovery of confidence in Spain for 2013.

The rally of underwritings in which BBVA has participated began with the 4-year bonds sold by FADE for €1bn. The book grew steadily to finally close with orders in excess of €2.4bn and price at 53bp over Spanish bonds. More than 160 investors participated. In terms of geographical distribution the deal was mainly placed throughout foreign investors (Germany, UK, Switzerland, Italy and France).

Bankinter's deal was the first covered bond transaction in the Spanish market in 2013. Deal sized capped at €500m and was closed 220bp over mid-swap, better than latest Bankinter's covered bond priced at 335bp over mid-swap in October 2012. Bonds were successfully placed as books were over €3.6bn just 15 hours after opening. Demand was led by international accounts (68%), mainly from Germany, France and UK.

Gas Natural's issuance has attracted more foreign investors than any other, as near 9 over 10 investors came from abroad (mainly from Germany, UK and France). Demand was ten times bigger than the offer of €600m 10-year bonds, thus allowing to lower interest rate to 3.875%.

Ferrovial has entered the Spanish debt market with a 5-year bonds €500m issuance. The deal has been successfully received by investors, being half of them from Germany and UK. Books registered orders up to €7.5bn, so that spread was lowered to 240bp over mid-swap.

The Government of Madrid has been the latest player in looking for funding in this wave of bonds issues. BBVA placed 5-year bonds for €1bn successfully during the opening day at less than 200bp over Treasury issuance. Most of the orders came from foreign investors (60%).  Fund Managers stood out by taking 56%.

BBVA has also acted as sole bookrunner for other regional governments looking for funding. The bank has placed €800m for Galicia, €550m for Castilla y León, and €189m for Aragón.

ASF (Highways of South of France) has joined this rally of debt issues in Spain too. It has taken advantage of stable market conditions to launch a new 10-year issue of €700m. Investors proved very receptive with total demand reaching €4.2bn. Almost 300 investors were present in the deal. French investors were heavily present (35%), followed by UK and Germany. Fund Managers and Insurers contributed with 75% of the order book.