The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site.

All material subject to strictly enforced copyright laws. © 2021 Euromoney, a part of the Euromoney Institutional Investor PLC.
Banking

Bank capital: Bankia IPO succeeds against all odds

The Spanish bank deal was priced to go; Government pressure might have helped

Convincing investors to buy shares in a restructured Spanish savings bank sounds a daunting task when it’s attempted in a European sovereign debt crisis and amid an overhaul of the troubled domestic banking system given added urgency by five Spanish banks failing the European Banking Authority’s stress tests. Yet that is exactly what newly created Bankia, a merger of seven Spanish banks, and its lead arrangers achieved last month.

"The most important thing is that we did it," says a banker who worked closely on the IPO. "Everyone in Europe is talking about what a success it was," he says, "because it was done in such a difficult environment." The transaction raised about €3.1 billion in capital, excluding the green shoe, making it the third-largest IPO in Spanish history.

ECM bankers outside the deal speculate that all manner of pressure must have been put on Spanish institutions to support it.

How do those who worked on the deal say it got done? "The story is simple," says the source. "It’s just a matter of making investors believe three key points."

The deal was cheap. Priced at €3.75, Bankia shares sold for 0.4 times their book value, compared with rival Spanish banks whose prices range from 0.65

You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.

SUBSCRIBE ONLINE TODAY

Unlimited access to Euromoney.com and Asiamoney.com

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually

FREE 7 DAY TRIAL

Unlimited access to Euromoney.com and Asiamoney.com, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors

LOGIN NOW

Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree