Banking & finance annual report
Despite significant liquidity in Spanish market,
attractive assets are limited
Market conditions have led to a ‘borrowers market’ in which a shortage of good targets for investment
means borrowers can be aggressive when negotiating financing
Jabier Badiola
Financiers are struggling to invest in
Spain, despite an increased appetite
for deal-making, according to Jabier
Badiola, partner and head of the finance
practice at Dentons in Madrid.
“Nowadays, in the Spanish market
we have quite high liquidity,” he says.
“On the other hand, we are seeing that
even if you have significant liquidity, the
opportunities and investment targets are
quite limited.”
The result is a “borrowers’ market”,
according to Badiola, which means they
are currently able to get more favourable
terms from lenders. “Because the market
has few opportunities, with regard to
those investments that are seen as really
good, many players are interested in
investing in them, so borrowers can be
a bit more aggressive when negotiating
their financing.”
‘Pent-up demand’
Badiola says the current situation partly
reflects pent-up demand following
the global economic crisis. “Financing
and acquisition activities slowed
down considerably during and in the
aftermath of the crisis and many players
became more focused on putting their
own accounts in order,” he explains.
“Banks were reluctant to lend.”
Badiola says the market remains
cautious and there are insufficien