Tuesday, Aug 25, 2009
Santander the invincible.
FT: Santander unveils €16bn bond buy-back
Debt markets were given a significant confidence boost on Monday when Santander, Spain’s largest bank, launched a programme to buy back securitised bonds with a face value of €16.5bn ($23.6bn).
Posted by flintster1994 @ 08:36 AM (767 views) Add Comment
6 Comments
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1. mark wadsworth said...
Excellent.
I've made that my debt-for-equity-swap of the week.
2. stillthinking said...
Santander seems a bit of a curious case. From what I have been reading recently, Spanish banks are effectively obliged to value repossessed property at the same value as the initial mortgage value, otherwise a court will throw out a request for repossession. So they are sitting on assets which are vastly overpriced. Given the excess housebuilding of Spain I wonder if Santander are indulging in one last throw of the dice. I can see the advantage of buying your own debt back at a lower price but I wonder if actually Santander have got heavy losses and if they do, what would be the consequences for Abbey, B&B, Alliance & Leicester. This old article here,
http://www.forbes.com/2009/02/05/santander-spain-britain-markets-equity-0205_banks_14.html
suggests that there were tough bank regulations in Spain, but how could that be the case if they funded housing to the extent that there are a million empty properties?. I wonder if Santander in the absence of determined ECB action have parasitically attached themselves to the British banking system and gambling on a successful reflation funded by the British taxpayer, plus of course the guarantees which its hard to see they deserve access to not having been a UK bank in the past.
3. stillthinking said...
Sorry, I mean, given that we have guaranteed that UK banks won't fail, to what extent does that mean we also guarantee that a foreign buyer bank won't fail as well?
That seems like a potential disaster to me similar to discovering that US mortgage holders can walk away, and now Spanish banks not only don't mark to market, but they don't even mark to model, they just keep the valuation at the level of the debt...
4. uncle tom said...
When I look at Santander, with its dramatic corporate growth and seemingly rosy outlook, despite being based in one of the most financially challenged nations on the planet; and despite virtually every other bank being deep in the brown stuff, I can't help feeling "wait for it, this one's going to go down in style"
There's a bit of Enron-itis here - what has this bank done that makes it so immune to the woes of the industry?
- or is it one hell of a timebomb..?
5. tudorian said...
uncle tom @4
I have to agree meteoric rise of Santander, despite the fall of Spanish industrial output, construction crash, having the largest supply of unsold properties in Europe and rampant unemployment really does defy belief.
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