Exclusive: ICO Financing Head: See ‘25 Issuance About €6 Bn, Might Do Foreign Currency Syndication

20 December 2024

By Marta Vilar – MADRID (Econostream) – Spanish debt issuer Instituto de Crédito Oficial could issue around €6 billion in 2025 and might do issuances in foreign currency in a public format, namely via syndication, according to Antonio Cordero, Director General of Financing of the ICO.

In an interview with Econostream on December 16 (transcript here), Cordero said that the ICO managed to issue around €10 billion in 2024, €2 billion more than planned.

This extra issuance was delivered as pre-funding for 2026, he said.

‘Pre-financing is not something we have proactively sought, but we have seen very good and very attractive opportunities in the market’, he said. ‘If they are good, then it is better to take them and not wait until later’.

In 2025 issuance would be around €6 billion and would include three syndications: a green bond, a social bond and a conventional bond, according to Cordero.

‘[O]ur idea is to do what we have been doing in recent years: two sustainable bonds – generally in recent years we have been doing a green bond and a social bond of approximately €500 million each - and what we did last year and this year as well, and plan to repeat next year, namely a conventional bond’, he said.

The amount issued under this conventional bond could be around €1 billion, but could be adjusted depending on how much was issued under the green and social bonds, he said.

Cordero acknowledged that the ‘appetite to go for something longer is growing’, so the ICO would probably extend its average maturity.

‘If in previous years the sweet spot was between 3 and 7 years, now I would say it could easily be between 4 and 9 years’, he said.

It was not yet clear if these longer tenors would be issued via public format or private placements, Cordero indicated.

The ICO would not be very active in foreign currency issuance through public placements, he said, but it would be closely watching the evolution of the US dollar, the Australian dollar, the sterling and the Swiss franc market.

‘I don't want to anticipate anything, but we may be issuing in one of these markets in a public format’, he said.

Asked what type of investors the ICO would want to see more of in their investor base, Cordero pointed to Asian and Middle East investors.

However, he suggested that reaching out to more of these investors would imply the need to issue in US dollar.

‘Next year we will see if this market can provide us with a good price compared to the euro market, and then we would go for it’, he said.

Cordero expected Fitch and Moody’s to upgrade the Spanish Treasury’s rating in 2025, which would immediately lead to an upgrade of the ICO’s rating.