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The crisis of the coronavirus has made the forces of the market to an unprecedented challenge. A challenge to which Spanish companies are looking for an antidote to preserve its solvency and liquidity in the issuance of bonds and sustainable in the rounds of financing from venture capital above the bag and bank financing.
Spanish firms issued an unusual number of 9,000 million euros in bonds sustainable -green and social – just in the first six months of this 2020 of the coronavirus, according to data from the Association of Financial Markets in Europe (AFME, for its acronym in English).
This figure, in addition to assumed 97% more than a year ago, is equivalent to 12.6% of all the volume issued in Europe in the titles of these features.
Sustainability
With these figures, bonds are sustainable, are situated as a key tool of the Spanish company to weather the crisis. In addition, Spain validates his position as “a driving force behind the green transition in europe”, so that in addition to consolidates its position as one of the european markets where the sustainable finance play a more important role of face-to-recovery.
In a context in which sustainability has become in one of the central axes of the plans of economic reconstruction around the world, from AFME is expected that “the issuance of bonds of social continue on the increase, but that the green bonds will continue to be a lever strong funding in the European Union”. And the Spanish companies are at the forefront.
Capital risk
However, this has not been the only or the most significant differential in the response that the Spanish companies have given to the crisis to protect their finances. While the use of the funding rounds, and injections of venture capital funds has fallen with force in Europe, in Spain has come up with a force. Especially among smes.
“Bank loans have registered large volumes compared with the risk capital, which remained relatively unchanged,” explains the report prepared by AFME to analyze the general trend in Europe. And that these venture capital funds have some liquidity reserves, increasingly abundant ready to invest.
In Spain, these vehicles have already been put to work. And, the report sets out as the country has moved no less than eight positions in the index, which measures the accessibility of risk capital to emerging companies and non-listed companies. The leap has been nothing less than the position colista number 25 -a total of 28 – and 17.
Both recipes seem to have worked, along with measures of stimulus and relief efforts deployed to date by the different administrations. In this sense, and according to the financial institution in its annual report, the bankruptcy filings decreased of a quarterly average of 1,100 in the second quarter of last year to just 714 in the same period this year.
Until when?
However, from AFME recognises that the great doubt over the markets is how deep and persistent will be this crisis. The resilience of the financing obtained up to now by the companies by way of capital markets as well as banking -also through the endorsements of the ICO – will largely depend on these variables. “For the moment, there is funding and a significant level”, he defends the institution.
Another factor that points towards the ease with the moment, Spanish companies are going to bypass the temporary is the fall of the conversion of loans into capital corporate as a means of rescue. In this sense, the report points out that Spain has reduced almost to half the volume of delinquent corporate in the last four years.
Meanwhile, the uptake of funds in the variable income market has been concentrated mainly in secondary emissionsbecause no Spanish company has premiered in the bag this year. The capital increases with the aim of strengthening solvency that have been key, even among large corporations, as evidenced by the transactions executed by several members of the Ibex 35.
With this picture and a volume shot of issuance of the bonds of traditional categoriesthe funding in the capital markets has reached “unprecedented levels” for european companies, 14.5% of the total as compared to 11% last year. This is due, fundamentally, to the increase of the emissions of fixed income in Spain have been more ‘green’.