Spain's El Corte Inglés, one of Europe's biggest retailers, plans to issue a €600 million bond via the Irish Stock Exchange.

European companies have increasingly turned to capital markets to raise funds as banks seek to reduce their exposure to domestic borrowers in the wake of the financial crash.

The privately owned El Corte Inglés, whose stores are found in the centre of most Spanish cities, has been hit hard by the recession, recording an 18 per cent drop in profit last year.

The bond issue will be launched on the Irish Stock Exchange tomorrow and marketed to institutional investors.

Its securitised bond matures in December 2015, with a coupon of 2.8 per cent - in line with the interest rate paid out on a Spanish government two-year bond. The bond is backed by the retailer’s consumer loans and store cards businesses.

An Irish Stock Exchange (ISE) spokeswoman said it was common for big European companies to use the Dublin bourse for a “debt listing solution”.

“The ISE is well-known internationally for its expertise and streamlined approach to listing which has enabled us to become a leading centre for the listing of international debt securities in Europe,” she said.

"In addition to El Corte Inglés, other Spanish issuers listing on the ISE include Santander, BBVA, and Banco Popular Español. Spanish issuers tend to list a range of debt product types including commercial paper, structured finance and corporate bonds," she added.

The Spanish retailer, a bellwether for the Spanish economy, reached a deal in August to refinance three-quarters of its €5 billion banking debt.

The company, which has cut prices in food and clothing to compete with cheaper stores, provides financing for expensive items such as dishwashers and sound systems and also grants personal loans.

The bond issue received credit ratings just three notches below the highest grade from Standard & Poor's and Fitch, the company said, several levels higher than the Kingdom of Spain.

Santander and Deutsche Bank acted as arrangers and joint lead managers for the deal. Santander said earlier this month it would pay €140 million for a 51 per cent stake in El Corte Ingles's consumer finance unit.

Additional reporting by Reuters