Bankinter : Fitch maintains Spain’s rating at A- with a stable outlook. Fitch has revised the expected growth for 2023 upwards to 1.9% year-on-year (+0.7pp) reflecting “buoyant recovery in tourism and rising public sector investment. This has offset the weakness in private consumption, which recorded a second consecutive quarterly decline”. It projects a reduction in Public Debt/GDP to 110.4% by December 2024, “driven mainly by nominal GDP growth while primary…
Bankinter | The rating agency justifies its decision on financial and external resilience, strong GDP growth in recent years and structural reforms. It also considers that the recent deficit reduction gives some confidence that, once the COVID-19 crisis is overcome, public debt will maintain a downward trend. It estimates GDP will see a decline of 9.6% this year and will grow 4.4% in 2021.
Jefferson Frank ( via The Conversation) | Ratings agency Fitch is forecasting a doubling in defaults in 2020 on US leveraged loans, which refers to bank loans to businesses considered more risky. The agency expects a default rate of 5% to 6% this year, compared to 3% last year. The dollar value will exceed the previous high of 2009, and for retail and energy companies, the default rate could approach 20%.
On Friday, S&P raised its rating on the main Spanish banks by one notch. The decision came in the wake of the rating upgrde by the same agency for Spain’s public debt on March 23, so its “a logical move,” according to Renta4.
In January, Spain terminated its contract with S&P (tired of paying for being knocked done by the ratings agency). S&P then replaced its management team in Spain and now, in March, of its own accord, – because Spain did not ask for the qualification – decided, last Friday, to raise its credit rating on the country by one step, to A- from BBB+, with a “positive” outlook.
Ratings agency Fitch has warned that a property bubble is evident in the centres of Spain’s large cities. But it makes it clear that it does not anticipate any generalised bubble in housing prices in the country in the short-term. This is due to the high level of stock which still has to be absorbed and the restrictions on buying a home.
On May 2, Fitch confirmed its BBB+ rating with a stable outlook for Abertis, citing as reasons the company’s recent acquisition of 100% of Sanef and the fact it has less debt than its competitors.
“Monetary stimulus is driving European sovereign debt towards irrational levels which are no reward for the risks involved and make any correction phases more dangerous,” say analysts at Intermoney.
Fernando Barciela | Madrid leftwing Mayor Manuela Carmena (Ahora Madrid) upset the markets and the media last week with her decision to fire credit rating agencies Standard & Poor’s (S&P) and Fitch, effective from 2016.
THE CORNER TEAM | For the first time since 2009, when the country lost the top credit rating by S&P, Spain’s outlook has been upgraded. Fitch affirmed its ‘BBB’ investment-grade rating and gave it a “stable” prospect thanks to progress in reforms and improved export performance.