New Spanish capital rules a boon for IPO bankers

Spain’s decision to force lenders to meet stricter capital rules or risk state ownership will provide a boon to bankers and lawyers helping them raise funds with stock market listings and asset sales.

Spanish banks may raise as much as euro 20 billion ($27.3 billion) by selling stock in initial public offerings and reducing their stakes in publicly traded companies in the next two years, according to bankers working on the plans. That’s after stock sales across all industries in Spain raised about euro 13 billion in the past two years.

“It is going to be a heap of work for a few legal firms and investment banks to do,” said Pablo Bieger, a partner in banking and finance at Clifford Chance LLP’s offices in Madrid who has assembled a force of 23 lawyers to work on business resulting from the rules. “There’s going to be a kind of bottleneck.”

Finance Minister Elena Salgadoconfirmed on February 18 that lenders without a stock exchange listing will have to boost core capital levels as high as 10 per cent.