LONDON, May 30 (IFR) - Senior debt bankers said on Wednesday that the syndicated bond market is currently closed for Spanish agencies, putting a dent in Spanish economy minister Luis De Guindos’ plans to recapitalise Bankia via the Fund for Orderly Bank Restructuring (FROB).
FROB currently has in excess of EUR4bn capacity available to recapitalise Spanish banks but this does not come close to Bankia’s request for EUR19bn from the state on Friday.
One senior origination banker based in Madrid told IFR that it would not make sense for FROB to tap the market at the moment both in terms of price and investor appetite for Spanish risk.
Other debt capital markets (DCM) syndicate officials said that currently FROB’s only option would be private placements with Spanish banks, but some questioned whether it would be able to raise those kinds of funds.
Another senior London-based DCM banker said the Spanish government had clearly not consulted banks on the FROB plan, and that even if these kind of levels in private placements could be achieved it would be “more about politics than finance”. (Reporting By John Geddie; editing by Alex Chambers)