ESM issues bonds for the recap of the Spanish banking sector

Luxembourg – European Stability Mechanism (ESM) has today launched and priced 2 bills and 3 floating rate notes for a total amount of close to €39.5 billion for the financial assistance to be provided for the recapitalisation of the Spanish banking sector. The ESM notes will be transferred to the FROB*, the bank recapitalisation fund of the Spanish government, in the coming days. The FROB will use a share of these notes of close to  €37 billion for the recapitalisation of the following banks that have been categorised as Group 1: BFA-Bankia, Catalunya-Caixa, NCG Banco and Banco de Valencia. The FROB will disburse a remaining share of up to €2.5 billion to capitalise SAREB, the Asset Management Company (AMC).

 Klaus Regling, ESM’s Managing Director stated “This is the first financial assistance provided by the European Stability Mechanism. It is an important event as the ESM has now started to actively fulfil its role as the permanent rescue mechanism for the euro zone”.

The table below provides the details of these transactions. These notes were not funded via the market.

ISIN

Maturity

Type

Amount

Beneficiary

EU000A1U97C2  

11/02/2013

2 month Bill

€2.5 billion

SAREB** (via FROB)

EU000A1U97D0

11/10/2013

10 month Bill

€6.468 billion

Banks (via FROB)

EU000A1U98U2

11/06/2014

18 month FRN

€6.5 billion

Banks (via FROB)

EU000A1U98V0

11/12/2014

2 year FRN

€12 billion

Banks (via FROB)

EU000A1U98W8

11/12/2015

3 year FRN

€12 billion

Banks (via FROB)

Financial assistance for the recapitalisation of the Spanish banking sector for a total amount of up to €100 billion was agreed in July 2012 under the EFSF and was transferred to the ESM on 29 November. The €30 billion in EFSF notes, issued on 26 July, were held by the EFSF in order to be able to be provided to the FROB upon request and will subsequently be cancelled. 

 * Fondo de Restructuración Ordenada Bancaria

** SAREB -  Asset Management Company (AMC) for Assets Arising from Bank Restructuring


© European Stability Mechanism 2015

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