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Make Money Blog$~New York - Spain's sovereign debt rating cut three levels by Fitch credit rating agency, yesterday. Pruning is to be a warning to Spain over the risk was reduced to junk bond status.Spain's debt rating lowered from A to BBB
, the lowest investment grade ranking. The new rating also led to a negative assessment of Spain which means no risk for further decline.Fitch refers to the estimated cost of the Spanish bank bailout that will cost 60-100 billion euros. Also assessed by Fitch prolonged recession will last until all of 2013. "The high level of foreign debt in Spain has made them very vulnerable to contracting the current crisis in Greece," Fitch said in a note, quoted by CNN Money (08/06/2012)."The Greek government reduced financial flexibility expressly limited its ability to intervene in the restructuring of the banking sector and increase the likelihood (need) financial support from outside."Firm, said one reason for downgrading Spain are one step at a European level which in the opinion Fitch has aggravated the economic and financial challenges faced by Spain."The absence of a real vision of reform (European zone) and the 'firewall' finances have made the Spanish and other peripheral countries vulnerable to capital flight and undermine their access to affordable financing fiscal," the report said.According to Fitch, Spain helped by a diverse economy and relatively high added value, competitive enough to perhaps be the trade surplus this year. However Spain fell into recession in first quarter of this year.Cut out the housing bubble bursting property values and lead to the Spanish unemployment rate down to a record high, namely 24.3% in April, as well as be the highest among the 27 EU countries.Problems with the Spanish banking system and the national debt has become a major concern of investors and economists in recent weeks. When there is still uncertainty as to whether Greece will come out of the European Union after the June 17 parliamentary elections later, the possibility of Spain increasingly urgent need of assistance due to their economic size, which is actually the fourth largest in the euro zone.It is feared if Spain is to take bailout funds from other European countries because they have no other way to recapitalize its banking sector. But still we need to see whether Germany would support the bailout plan disbursements directly to the Spanish banks.On Tuesday, Finance Minister Cristobal Montoro talk radio station Onda Cero in that said as a country risk premium, Spain in trouble with market access when the need to refinance their debt. Montoro requested additional assistance from other European governments to support the Spanish banks. "We can not resolve the debt problems of this country alone," said Montoro.But the Spanish have a strong demand for its debt in a bond auction went well yesterday. Yields of 10-year Spanish bond fell 0.19% to 6:08% in trading yesterday even after the downgrade. Indicate that investors already know the downside risk before the announcement of Fitch.
source: detik.com
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, the lowest investment grade ranking. The new rating also led to a negative assessment of Spain which means no risk for further decline.Fitch refers to the estimated cost of the Spanish bank bailout that will cost 60-100 billion euros. Also assessed by Fitch prolonged recession will last until all of 2013. "The high level of foreign debt in Spain has made them very vulnerable to contracting the current crisis in Greece," Fitch said in a note, quoted by CNN Money (08/06/2012)."The Greek government reduced financial flexibility expressly limited its ability to intervene in the restructuring of the banking sector and increase the likelihood (need) financial support from outside."Firm, said one reason for downgrading Spain are one step at a European level which in the opinion Fitch has aggravated the economic and financial challenges faced by Spain."The absence of a real vision of reform (European zone) and the 'firewall' finances have made the Spanish and other peripheral countries vulnerable to capital flight and undermine their access to affordable financing fiscal," the report said.According to Fitch, Spain helped by a diverse economy and relatively high added value, competitive enough to perhaps be the trade surplus this year. However Spain fell into recession in first quarter of this year.Cut out the housing bubble bursting property values and lead to the Spanish unemployment rate down to a record high, namely 24.3% in April, as well as be the highest among the 27 EU countries.Problems with the Spanish banking system and the national debt has become a major concern of investors and economists in recent weeks. When there is still uncertainty as to whether Greece will come out of the European Union after the June 17 parliamentary elections later, the possibility of Spain increasingly urgent need of assistance due to their economic size, which is actually the fourth largest in the euro zone.It is feared if Spain is to take bailout funds from other European countries because they have no other way to recapitalize its banking sector. But still we need to see whether Germany would support the bailout plan disbursements directly to the Spanish banks.On Tuesday, Finance Minister Cristobal Montoro talk radio station Onda Cero in that said as a country risk premium, Spain in trouble with market access when the need to refinance their debt. Montoro requested additional assistance from other European governments to support the Spanish banks. "We can not resolve the debt problems of this country alone," said Montoro.But the Spanish have a strong demand for its debt in a bond auction went well yesterday. Yields of 10-year Spanish bond fell 0.19% to 6:08% in trading yesterday even after the downgrade. Indicate that investors already know the downside risk before the announcement of Fitch.
source: detik.com
please give me comments thanks
Posted in: Spanish Debt Rating
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