Spanish issues benefit from sovereign mood

Spanish companies yesterday harnessed the positive sentiment around the latest government debt auction to get their own bond issues away. Telefonica sold €1 billion of seven-year, 3.66% notes – the first Spanish corporate issue since Iberdrola some six months ago. The yield on the notes was in at 149bp, with Telefonica credit default swaps also seeing a large rally in the last two days from around 175bp to 150bp.

Meanwhile, BBVA issued €1 billion of two-year, 2.75% senior unsecured notes at +155bp. The bank’s senior credit default swaps have rallied from 220bp in to 195bp this week.

Spain five-year CDS itself has tightened sharply from around 250bp to 203bp, its tightest level since the second week of August.