Moody’s Downgrades 28 Spanish Banks on Sovereign Risk!

- The world is heading towards a global economic, financial and currency meltdown. It will start in the PIIGS, spread to the rest of Europe, UK, Japan, Asia … and finally America. I expect this meltdown to spread to the whole world in 4-6 weeks. Got physical gold yet?
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Moody’s Downgrades 28 Spanish Banks on Sovereign Risk!
By Charles Penty and Dakin Campbell, http://www.bloomberg.com/
Banco Santander SA (SAN) and Banco Bilbao Vizcaya Argentaria SA (BBVA), Spain’s largest lenders, were downgraded by Moody’s Investors Service because of the country’s sovereign debt and souring real-estate loans.
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At least a dozen lenders were lowered to junk status, Moody’s said yesterday in a statement. The ratings company downgraded six banks by four levels and 10 by three grades with the rest getting one- and two-tier declines.
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“In Spain you have a combination of a significant sovereign-debt burden coupled with a collapsing real estate market,” said Bruce Simon, chief investment officer at Los Angeles-based City National Bank, which manages $14 billion in client assets and doesn’t own debt issued by the lenders.“That’s doubling the pressure on Spanish banks.”
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Moody’s issued a three-step reduction in Spain’s credit grade on June 13, citing the debt, a weakening economy and limited access to capital markets. Spain was lowered to Baa3, the lowest investment-grade rating, from A3 and remains on review for a further cut after announcing plans to borrow 100 billion euros ($125 billion) from European Union rescue funds to recapitalize banks.
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The lenders are facing the “reduced creditworthiness” of the nation as well as the “expectation that exposures to commercial real estate (CRE) will likely cause higher losses, which might increase the likelihood that these banks will require external support,” the ratings firm said in its statement.
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