Large companies are already financed below their States… except in Spain
The story begins with a scene that until recently would have sounded like financial science fiction. The markets dawn calm, the indices continue to beat highs, the news flow is routinelFixed income advances with its usual calm and, suddenly, a arises anomaly that turns the risk compass upside down. Some corporate bonds are coming out at a lower cost than those of the States themselves, which should be the system’s security reference.
The scene is repeated at various points on the map and is no longer a technical detail or a statistical eccentricity. It’s a change of order that investors are following with a mix of surprise and caution. And while this anomaly gains strength in countries like France or the United States, Spain observes the phenomenon from the sidelines.
The protagonists of the moment are companies that rarely coincide in the same conversation. L’Oréal, Airbus and LVMH in France, Microsoft in the United States. They have all taken advantage of a very peculiar market window that has allowed them to finance themselves below their respective governments., yesbased on market data collected by Bloomberg and ICE BofA Global Research.
The French ten-year bond is around 3.44% while the curve L’Oréal around 2032 moves slightly below. The difference seems small, but its meaning is enormous. Investors prefer to charge less for lending money to a perfume manufacturer than to the French state itself.
On the other side of the Atlantic, The figures follow the same pattern. Microsoft, which retains the envied triple A, has placed debt at a lower cost than the Treasury equivalent, according to data collected by Bloomberg. A crossing that until recently seemed unthinkable in the American financial system.
When good news is not so good
The first reaction is usually to celebrate it as a sign of business strength. Companies capable of surpassing their own governments. A sign of competitiveness. A stroke of authority. The turn comes when analysts remember that the natural order of Markets dictate that a State should finance itself at a lower cost than its companies.
When the opposite happens, We are not facing a corporate triumph but rather a symptom of sovereign weakness. France exemplifies this tension better than anyone.. It’s not that L’Oréal be safer than your country. The French Treasury has lost part of the confidence it used to inspire.as warned by rating agencies such as Fitch.
In the United States, the crossing is more subtle, although equally significant. He Treasury remains the cornerstone of the system, but the gap with higher quality corporate bonds has narrowed to a decade-low. The premium that separated Microsoft from the Treasury narrows so much that in certain sections it practically disappearsaccording to the report “market Goldman Sachs Monitor.
This point is better understood when the focus is expanded to Germany. There are no crossovers or surprises there. The ten-year Bund continues to move around 2.9% and no German industrial giant emits below that reference. Companies that have traditionally been considered financial strengths continue to pay a positive differential with respect to the sovereign.
The case of Spain
With this context, Spain enters the scene with an unexpected role. Here the financial order has not been reversed. The Spanish ten-year bond remains close to 3.14% and no large national company has managed to approach those levels.
In September, Repsol completed a historic placement in dollars that exceeded 2,500 million at clearly higher costs. The three-year stretch was around 4.8%, the five-year-old exceeded 5.2% and the ten-year part was installed almost in the 6%. Santander is not even close. Its senior issues in pounds or euros move well above the sovereign. BBVA presents a similar pattern. And the company that comes closest, Iberdrola, does not cross the border either. Its recent green bonds are in a range close to 3.5%.
The data cann to suggest that Spain does not have companies as solvent as its own State. It might even seem like a symptom of lack of competitiveness. However, the reality is another. Spain is on the right side of the anomaly. It reflects that the markets do not perceive the political or fiscal risk that does penalize countries like France. While fixed income funds analyze which countries could replicate the French crossover and which companies could follow in Microsoft’s footsteps, the Spanish curve remains stable in a space that other countries would already like to recover.
