Spanish Fixed Income From Large Issuers Maintains Its Rating Despite The Pandemic

Spanish economy general

Fernando Rodríguez | 96.3% of the outstanding volume of Spanish fixed income with rating – 1.76 trillion euros – was Investment Grade, BBB or higher – at the end of 2020. This is only three tenths of a percentage point lower than in March of the same year, according to a study included in the CNMV Bulletin for the first quarter of this year, published recently.

The supervisor’s study concludes that “although the analysis identifies in the first months of the crisis a certain increase in the downgrades of Spanish debt ratings in certain issuers and sectors, it cannot be deduced that these are significant or generalised. This is shown by the stability of the high percentage of investment grade debt, although with a certain recomposition within this group towards the lowest rating levels.

Therefore, there is no notable deterioration in the credit quality of Spanish issuers in the context of the crisis.”

According to the Survey, the downgrade in rating levels is explained by purely technical and not economic issues, “almost entirely due to the reduction in A and AA rated securities, due to the amortisation of central government debt in the first case and that of monetary and non-monetary financial institutions in the second.”

Nevertheless, the CNMV experts make it clear that this measure does not consider the evolution of many smaller companies that do not have a credit rating and that “may have been significantly affected by the deterioration in economic activity.”

About the Author

Fernando Rodríguez
Fernando Rodriguez is in charge of PR and Development at The Corner. He has worked for over 30 years for financial publications like Expansion, El Economista, Dossier Empresarial, Ciudadano and Afa Press-Worldfolio and has been a contributor to El Pais-Negocios, Emprendedores, Época, Sector Ejecutivo and Consejeros. Fernando holds a degree in Journalism from CEU-San Pablo (Complutense University) and a master’s degree in Strategic Communication from CESMA business school. As a communication consultant, he has developed PR projects for firms like Grupo Bancaja, JP Morgan, GBS, Corpfin, QBE, Howden, Asociación Española de Leasing y Renting (AELR) or Asociación Española de Accionistas Minoritarios de Empresas Cotizadas (AEMEC).