Iberdrola SA’s EUR 5bn (USD 5.9bn) primary block trade — the largest equity capital markets (ECM) deal in Europe so far this year — has helped lift Spain’s ECM activity to its strongest YTD since 2021.

ECM issuance in Spain has reached USD 9.2bn year-to-date, up sharply from USD 5.4bn during the same period last year.

But, excluding Iberdrola’s jumbo raise, volumes would be just USD 3.3bn.

Follow-ons have driven most of this growth, accounting for USD 7.5bn in volume — up from just USD 2.17bn a year earlier. In addition to the Iberdrola capital raise, other notable transactions included trades in Amadeus IT Group SA (USD 464m) and Ferrovial SE (USD 307m).

“There’s been plenty of block activity — enough to keep the market ticking over,” said a Southern European ECM banker. “But we still need more companies willing to sell meaningful stakes.”

IPOs have shown early signs of revival with the listings of HBX Group International plc and Cirsa Enterprises SA, but optimism around both has proven short-lived, as both deals have struggled in aftermarket trading.

“If the aftermarket for these two companies has been weak, it raises questions for future IPOs. Investors want a steep discount to get involved, and if the shares still fall afterwards, it’s a tough sell,” said a regional ECM banker. “If you choose to list in this environment, you need resilience — and patience — until the market eventually recognises your value.”

Cirsa was priced at EUR 15.00 per share on 7 July 2025 but had fallen to EUR 14.15 by 24 July. HBX, listed on 11 February at EUR 11.50, was trading at EUR 11.30 as of 24 July, marking a recovery after poor trading the weeks after the listing.

The near-term outlook for IPO activity remains subdued, according to the Southern European ECM banker.

“One difficult IPO doesn’t mean the window is closed,” he said. “But confidence has definitely taken a knock, though it’s not broken. Most issuers are now targeting 2026.”

Meanwhile, Spain’s convertible bond market remains largely dormant. The only deal this year has been Iberdrola Finanzas SAU’s EUR 400m (USD 434.6m) issue — a notable increase on the USD 108m raised in 2024 by Promotora de Informaciones SA, but still slim pickings for the asset class.