The Spanish companies captured 14% less financing in 2021 than in the previous year through bond issues. The flood of placements that occurred after the outbreak of the pandemic and the quick reaction of the central banks is behind this drop in volumes to 41,815 million euros.
If distances are marked between the financial sector and the rest of the national business fabric, the cut is more bulky in the second case. This is reflected in the data of a study published this Wednesday by Société Générale.
While financial entities captured 10% less that in 2020 through debt instruments, the rest of the corporations contracted their new financing in this way by 17%. A setback that Jaime Sanz, head of rating advice for sovereign states at Société Générale, attributes to “the need to have tighter liquidity buffers” as a result of less uncertainty about the pandemic and “the cost of maintaining this liquidity in a context of negative rates”.
In the non-financial company chapter, the main issuer was Cellnex, which with six operations for 5,350 million euros accounted for 25% of the volume of this segment. However, the entity emphasizes the jump to green emissions of a good number of real estate firms such as Aedas, Neinor Homes and Vía Célere, in what they consider to be a trend for the future.
Within this same chapter, last year Repsol became a pioneer with an inaugural issue of sustainable bonds for a volume of 1,250 million euros. Here, those responsible for the area at Société Générale have perceived a return to the issuance of bonds with more ecological than social criteria after the emergency that the outbreak of the pandemic in 2020 represented in this area.
So much so that emissions labeled as sustainable (ESG) reached 32% of the total volume issued by companies, while 37% of what was placed by financial entities. In the market as a whole, its relative weight reached 31% in 2021 compared to 12% the previous year.
An exponential growth that Fernando García, director of capital markets of the entity responsible for the report, estimates that it could even reach 40% facing this financial year 2022 in which all issuers move by the same common denominator. This is none other than waiting for the central banks, which is causing some volatility in rates and spread in the secondary market.
Regarding the financial sector, Carlos Cortezo, head of capital markets for financial institutions, highlights that “the senior issues, both preferred What non-preferred They have been the most used. In some cases, also to refinance existing subordinated bond issues.
Conversely, there has only been one mortgage bond operation carried out by EuroCaja Rural. In this sense, Cortezo has pointed out that “the bulk of entities have relied on the TLTRO liquidity auctions for the pure financing of their activity”.
Within this group, Santander Bank It has repeated another year as the most active issuer with up to six operations in which it has obtained 6,000 million euros. A sum equivalent to 31% of what the entire financial sector has received in this way from the issuance of bonds in euros in the Spanish market. Second place, for CaixaBankwith four operations for 3,750 million.
As for the public sector, the 41,050 million euros awarded throughout the year accounted for 30% more than in the previous year. At the head of this group, unquestionably, the Public Treasury, with five issues for 34,000 million. However, as Sanz points out, their relative weight dropped from 90% to 83% of this segment “thanks to the fact that the market has been opened up to other public actors”.
Spanish bond at 1%
Looking ahead to this 2022, from the entity they predict a “sustained recovery, but losing steam”. A description that translates into the fact that the GDP growth of 4.9%-5% expected this year for the Spanish economy could be reduced to 3.9%-4% by 2023. A condition that they also see as being extrapolated to the whole of the Eurozone.
With this context, they do not believe that the inflation peak be seen until the end of this year, around 2.3% for the common currency area and close to 3% for Spain. However, from Société Générale they are “calm in terms of rate expectations” and do not see increases by the European Central Bank (ECB) until the second half of 2023. And they explain: “Moderate and always behind the US” .
What they do expect from the entity is that “it speed it up a bit tapers this year”, which the ECB has preferred to call “recalibration”. A scenario in which, according to the forecasts handled by the firm, “it is to be expected that the rate of the ten-year Spanish sovereign bond will be around 1% at the end of the year.”
As reflected by record number of broadcasts in the first two weeks of the year, “this year is going to be clearly marked by inflation expectations and the reaction of the central banks”, according to García. Thus, in the entity they recognize that although there is still a notable investor appetite, “there is caution on the part of the issuers in the face of what may come”.
These are the factors that lead the expert to consider that “in the first part of the year you will see a slight enlargement of spread and then a narrowing correction in the second part.” Something that he attributes fundamentally and precisely to the fact that “the central bank purchase reductions, which were providing very important support, are going to materialize.”