Today’s market chatter in Spain

The U.S. Fed has established higher capital requirements for US banks. SANTANDER highlights Basel agreement enforcement is tougher in America than in Europe. The 8 biggest entities (BNMY, C, GS, JPM, MS, STTM, WFC, BofAML) would need to increase capital reserves by $68bn. Legislation would be in place in 2018. In this respect, and taking into account recent disagreement on SRM and struggling banks interventions, stress tests are more and more likely to turn out somewhat decaffeinated.

Iberia reinforces its offer and retrieves routes that quit operating in the last years, like Santo Domingo, Athens, Istanbul, Amsterdam and Stockholm. The airline company reduced its capacity by -3.3 % in 1Q14. Growth is expected in 2Q14 after many years losing positions. This year, Iberia could contribute by 0.4 % to IAG overall potential. RENTA 4 foresees no impact on share prices as this move is framed within expansive strategy and BANKINTER believes it is the first step in a more aggresive development aiming at bolster Iberia Express European offer and get back Latin America leadership.

SABADELL. State Association of Industrial Participations (SEPI) could buy government ordering the participation of Bankia (16.5 %) and BMN (4.9%) in Deoleo. Besides, Caixabank has offered its participation (5.3 %). SEPI would reach a 27 % of capital control in Deoleio (€133M) without launching a takeover bid and maintaining a spanish capital control majority. Analysts consider it positive for Deoleo as it eliminates pressure over this value in the sale process that would require a 100% takeover bid. Still, a change in Kutxabank or Caixabank position, or SEPI decision, may change the result of the operation.

BANKINTER. Ferrovial Division for Infrastructures needs to refinance $5.789bn. The loan was assumed to get in charge of a highway in Indiana for 75 years through a joint venture with Macquarie Infraestructure. This division negotiates with nearly 40 banks. According to US law, Ferrovial needs the 66% of creditors approval.