Abengoa's Stock, Bonds Jump After Banks Subscription Report

  • Company stock posts biggest 2-day surge in 9 months on report
  • Abengoa bonds rise most in BofA Euro High-Yield Index

Abengoa SA, a Spanish renewable-energy producer, had the biggest two-day surge in nine months on reports that three banks have agreed to underwrite a capital increase. Bonds jumped.

The shares rose 16 percent to 1.134 euros in Madrid trading after climbing 27 percent on Tuesday. The company’s bonds also surged, leading increases in the Bank of America Merrill Lynch Euro High Yield Index.

Credit Agricole SA, Banco Santander SA and HSBC Holdings Plc have agreed to be standby underwriters in the Seville, Spain-based company’s planned 650 million-euro ($740 million) capital increase, according to people familiar with the matter, who asked not to be named because they aren’t authorized to speak. Abengoa’s shares have been the second most volatile on the European benchmark Stoxx 600 index over the past 30 days as shareholders balked after the company said July 24 it was changing guarantees on certain bonds.

Abengoa’s press office declined to respond to e-mail requests seeking comment on the reports. A Santander press officer declined to comment by phone. HSBC declined to comment as did Credit Agricole to an e-mailed query. Reuters reported an agreement with the banks yesterday.

The changes to guarantees were announced a week before the company reported quarterly earnings and cut its free-cash flow guidance. It announced plans to issue new shares on Aug. 3. This was not the first time Abengoa managed to roil investors. It did so in November too after announcing changes in the way it accounted for debt.

Today, Abengoa’s 550 million euros of 8.875 percent bonds rose 9.5 cents on the euro to 65.5 cents, the highest in three weeks. The company’s 8.5 percent notes due in March 2016 rose 9 cents to 90 cents on the euro, the highest in more than three weeks.

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