Spanish bank ipos threatened by worsening crisis

The worsening euro zone debt crisis threatens to sink the share flotations of two Spanish savings banks needing to raise billions of euros, analysts said on Tuesday.

Both Bankia and Banca Civica are offering steeply discounted prices to investors, under pressure to get the deals done because they are seen as a key test of whether Spain is managing to strengthen its banks which were laid low by reckless lending during the country's property boom.

Bankia and Banca Civica are in the middle of book building to try to raise a combined 5.5 billion euros ($7.8 billion) in public share offerings, but the environment has turned ugly as European leaders fail to take definitive action on Greece's debt crisis, threatening market contagion amongst debtor nations.

Also hanging over the IPOs is uncertainty over which Spanish banks could fail to pass the Europe-wide banking industry's capital adequacy stress tests in results due this Friday.

Source: Reuters.com