Nowhere to run

Banks have been rushing to finance a number of highly leveraged Spanish equity purchases. But with the markets moving against two recent deals, some are predicting that this could be the end of cheap borrowing for Spanish corporates. Gareth Gore reports

Spanish corporates have been expanding like never before. Buoyed by a rosy domestic market, the country's largest companies have been involved in a spate of acquisitions over the past year, including Telefonica's bid for the UK mobile phone company O2 and Ferrovial's purchase of UK airport authority BAA last June. But a sudden dearth of investor interest in a pair of loans designed to allow two Spanish firms to purchase sizeable equity stakes in other companies has left dealers exposed to