Banco Santander prices €3.15 billion; secondary volume heavy year to date; spreads firm

By Cristal Cody

Tupelo, Miss., Dec. 9 – In new European securitized issuance in December, Banco Santander SA priced a €3.15 billion CDO offering.

Elsewhere, dollar-denominated secondary market volume was strong in the previous two sessions and has been heavy throughout the year, sources report.

During Friday’s session, $302.23 million of high-grade CBO/CDO/CLO paper traded at an average 98.00 price, while $144.47 million of lower-rated issues were traded at an average 88.70 price, Trace data shows.

On Thursday, $601.95 million of investment-grade securities and $240.06 million of non-high-grade issues were traded.

The high-grade issues posted a 98.50 average trading price. The lower-rated paper traded at an average 86.10 price on Thursday, data shows.

Year to date, $70.93 billion of investment-grade and $34.29 billion of non-high-grade CBO/CDO/CLO issues have traded, according to a BofA Global Research report released Monday.

High-grade secondary market has jumped 78% over the same period last year, while non-high-grade trading volume has climbed 25% from the year-ago period, the note said.

Last year, $39.8 billion of high-grade issues and $27.42 million of non-investment-grade securities were traded in the same period.

Looking at CLO secondary activity, BWIC volume totaled $626 million last week “with the most bids for AAA, AA and BB” traches, according to the BofA Securities analysts.

“Spreads across the stack tightened by 2-10 [basis points] with only B left unchanged,” the analysts said. “The strong November jobs report bolstered our broad overweight view on U.S. CLOs for next year, in which secondary spreads should continue to grind tighter across the stack.”

CLO AAA tranches were quoted ending Friday in the Libor plus 120 bps area.

FTA Pymes Santander prints

Banco Santander priced €3.15 billion of notes due April 2051 in the CDO transaction, according to market sources.

FTA Pymes Santander 15 sold €2.4 billion of series A notes at Euribor plus 30 bps at the top of the capital stack.

Banco Santander was the arranger.

The CDO is secured by a portfolio of secured loans and credit lines originated by Banco Santander to corporates, small and medium-sized enterprises and self-employed individuals in Spain.

The global bank is based in Madrid, Spain.

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