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+.
Egan-Jones downgrades Spain to CC+
E-J rates probability of Spanish default in next 12 months at 35%
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%