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Spain under scrutiny ahead of refinancing
Date 10/04/2011 23:33  Author webmaster  Hits 989  Language Global
10 APR 2011

Analysts estimate Portugal will seek between €60 billion (£52.9 billion) and €90 billion

By Geoff Ho | Daily Express

SPAIN’S creaking finances are set to come under renewed pressure this month as Madrid has to refinance two sets of bonds.

With Portugal having finally succumbed to the sovereign debt crisis that is haunting Europe, the market is now looking at Spain to see if it will be the next country to request a bailout.

According to Madrid’s Tesoro Publico, the government agency responsible for Spain’s cash and borrowing programmes, the embattled state has e15.5 billion (£13.7 billion) worth of bonds, or government IOUs, that are due to be repaid by April 30.

It will face another key test of market confidence next week, when it will try to raise billions by selling its benchmark 10-year bond.
Spanish government agency Tesoro Publico has yet to reveal how much it will try to raise from the bond auction.

Although Greece, Ireland and now Portugal have been bailed out by the European Union and the International Monetary Fund, Spain is viewed by many in the market as being too big to save.

According to the Bank for International Settlements, which acts as banker to central banks, Britain’s lenders have a total of £93.3 billion of Spanish-related loans and assets. These would turn into losses in the event of a default by Madrid. Barclays in particular has had a difficult time in Spain. In its 2010 full-year results, Barclays said that loan impairments had fallen across the board, with the sole exception of Spain, where it took a £898 million hit from increased bad debts.

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