Market chatter: An agreement to soften stress tests conditions for Spanish banks

Entities value will rise and they will be able retrieve part of the loan by executing the guarantees.

“This agreement softens test conditions and is specially positive for banks with high exposure to loans for non-real estate development companies. Whereas exposure to this sector is well provisioned after two government ordinances, this is not so for enterprises away from this activity, whose provisions are not that high but hold valuable guarantees to bear in mind. The measure is positive and joins other relaxing changes like reducing  to penalising public debt portfolios,” explains senior analyst José Benito.

Link chooses Amadeus as one of the most attractive values in the leading Spanish exchange index Ibex 35. The travel IT company reported €179.2M net profit in the last quarter (+9.1% year-on-year). The incorporation of Newmarket and UFIS have pushed this results. Analysts highlight the free cash flow generation ability, the sound financial situation, the R&D investment, the rise of payout to 50% of 2014 attributable net income and the value appreciation potential (+4% at current prices).

Telefónica reported 8-year bonds issuance worth €1.25bn at 2.242% interest rate.  Getting a 3.2x times oversubscription, the spread was the shortest in the last seven years.

“The company takes advantage of a low rates context,” ACF experts say.

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