Egan-Jones continues to relentlessly hammer the market with the awful truth (for the 6th time since April!!), again downgrading Spain from CCC+ to CC+.
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Egan-Jones downgrades Spain to CC+
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E-J rates probability of Spanish default in next 12 months at 35%
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E-J expects senior Spanish bondholders to take losses
The WSJ reports:
Ratings firm Egan-Jones cut its rating on Spain Friday for the sixth time since mid-April.
Egan-Jones now rates Spain at double-C-plus from triple-C-plus, pushing it closer to the bottom of the ratings scale and further into junk territory. Egan-Jones has been aggressive in downgrading Spain in recent months, more so than the three major ratings firms, Standard & Poor’s, Moody’s Investors Service and Fitch Ratings.
Spain’s probability of default in the next year is 35%, according Egan-Jones.
“In addition to the expected austerity riots, the latest news is that Valencia and other regions will need $15 billion of aid, the senior debtholders of the weak banks will be forced to take losses and there might be some sharing of losses among all banks,” Egan-Jones wrote in a research note about the country.
The best commentary we’ve seen on the downgrade from a ZH reader:
‘C++ is one ply toilet paper, C+++ is two ply’
Spanish one-ply paper is crashing further on the news, as the 10 year rate has jumped even further to a last of 7.28400%
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Spain has failed. It’s just hasn’t died. The Zombie still moves like a living creature. Germany is pumping blood money into the banking arterial system. The people are running out their blood deposits out just as fast. No hope here. $400 billion would keep the fantasy going a little longer. Spain has no more than a month, maybe no more than 2 weeks. A hundred billion buys 1 week. A trillion buys 2 months. The math is ugly but true. August will be one heck of a month.