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Santander bond sale hit by UK election announcement

© AFP/File | Santander and France's BNP Paribas are neck-and-neck for positioning as the eurozone's biggest banks by market value; Santander employs nearly 190,000 people in ten countries

MADRID (AFP) - 

Spain's largest bank Santander on Tuesday raised only 750 million euros in a bond sale as demand was affected by Britain's shock call for a snap election.

The bank, one of the eurozone's two biggest, had hoped to raise up to two billion euros ($2.1 billion) by selling bonds which can be converted to ordinary shares.

Britain was until recently the main market for Santander for profits but fell into second place after Brazil at the end of last year with Brexit and a weaker pound knocking earnings in Britain by nearly 15 percent.

British Prime Minister Theresa May on Tuesday called for a general election on June 8 in a shock announcement in a bid to bolster her position before launching tough talks on leaving the European Union.

"Demand was affected by the announcement right in the middle of the bond sale," an informed source said, adding that it "rocked the market".

The bank said the bonds will pay a 6.75 percent coupon and would convert to shares if its capital cushion slides below a certain level.

Santander and France's BNP Paribas are neck-and-neck for positioning as the eurozone's biggest banks by market value. Santander employs nearly 190,000 people in ten countries.

© 2017 AFP