Santander securities sell like hot cakes

Demand for the latest issue of Santander securities, which were launched on Monday, was so high demand outstripped supply by 50%.

Santander has issued covered bonds worth €850 million that were over-subscribed. In a communiqué sent to the sock market commission CMVM on Monday, Santander Totta informed that it had “carried out an issue of Premium Bonds aimed at institutional investors to the sum of €850 million.”
“Demand reached €1.2Bn”, stated an official source in the bank to the newspaper Negócios, which was almost 50% over the amount that the bank led by Pedro Castro e Almeida had needed to raise.”
The bonds involved are secured by mortgage credits, mature in 2026, and will pay a 3.75% coupon rate. The issue liquidation will take place on September 11.
“The aim of the operation was to “diversify sources of financing”, said the same source. The operation on Monday took place in the run-up to a possible interest rate hike by the European Central Bank later this month.
Most banks in both the Portuguese and European financial system have benefitted from the recent spate of interest rate hikes that have fattened their financial margins.
From January to June 2023, Santander Portugal’s financial margin grew 58.4% to €586 million on the same period in 2022.
In July, when presenting H1 results, Pedro Castro e Almeida emphasised the importance of this factor: “It was a significant driver for the €334 million profits that we had for the first half of the year.”

Photo: ANTÓNIO PEDRO SANTOS/LUSA