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发帖数: 29846 | 1 By CHARLES FORELLE And DAVID ENRICH
LONDON—Investors fled from Spanish government debt on Monday, an immediate
rejection of the country's planned bank bailout by the constituency it most
desperately needs to impress: the buyers of its own government bonds.
The market rout puts Spain and the euro zone in a dire position. The bailout
plan—in which Spain agreed to accept up to €100 billion ($125
billion) to recapitalize banks—was hatched to alleviate the concern that
Spain itself could be dragged down by the declining fortunes of its lenders.
But confidence in Spain is deteriorating, not rising. Behind the action is a
swirl of concern about Spain, its banks and the mechanics of the bailout.
The unwinding was remarkable for its speed: The cheers for the Spanish
bailout lasted just hours—by the end of the trading day any euphoria had
evaporated and was replaced by gloom. That suggests Europe is quickly
running out of time to find a bolder fix for the sovereign-debt crisis.
"The hourglass…has been turned over, but each time it's happened in Europe
over the past few years there seems to be less and less sand in it," said
Peter Boockvar, equity strategist at Miller Tabak & Co.
After a burst of strength Monday morning, Spanish bond yields changed course
and began a sharp rise. By afternoon in London, the 10-year yield was at 6.
54%, three-tenths of a percentage point higher than Friday's close. Bond
yields rise when their prices fall.
Credit-default swaps on the Spanish government, insurance-like contracts
that pay off if Spain defaults, zoomed higher Monday. Spain dragged Italy
deeper into trouble, too; the Italian 10-year yielded 6.04%, up more than a
quarter of a point.
European stock markets started the day off strong but steadily lost ground.
By the end of the trading session, most European markets were modestly in
the red, though the Milan exchange was off 2.8%—hurt by big declines in
Italian bank stocks—and the Spanish benchmark index was down 0.6%.
Over the weekend, European finance officials pressed Spain to accept help
for its banks. The Spanish government agreed to ask for up to €100
billion to recapitalize lenders.
Spain pushed hard to separate itself from its banks—at one point arguing
that European aid should be channelled directly to the banks, not through
the government.
But Europe's bailout funds don't permit that, and the funds will lend
directly to Spain, which will in turn use the aid to buy stakes in banks.
That structure has unnerved many market participants. One of the euro zone's
two bailout funds, the European Stability Mechanism, is considered a "
senior" creditor by European authorities, and it is meant to be paid back
first if Spain defaults on its debts.
That means investors who might buy Spanish bonds now risk being behind the
ESM if Spain can't repay. On Monday, Austrian Finance Minister Maria Fekter
said she would prefer the bank aid to come from the ESM.
While the bailout helps Spain by providing it with funds upfront—and at a
relatively low cost—to help the banks, the bailout is not a gift: Spain
must repay the loan. That means potential bond buyers are lending to an even
-more indebted country.
The poor performance Monday of Spanish bonds suggest few investors are
attracted to them these days.
"Spain's capital injections entail a transfer of risk from the private to
the public sector," said Phoenix Kalen, a macro credit strategist at Royal
Bank of Scotland Group PLC. The European loan "will increase Spain's debt
burden, while equity injections represent additional risk that the Spanish
government is taking onto its balance sheet."
Ms. Kalen added that Spain is likely to need "more external help going
forward," for the government, not just the banks.
One key variable in determining Spain's financial future is the willingness
and ability of Spanish banks to keep gobbling up their government's debt.
Brimming with cheap three-year loans provided by the European Central Bank,
Spanish lenders this year have been among the few buyers of Spanish
sovereign bonds. Their heavy buying had helped keep a leash on bond yields,
slowing their steady rise.
But Spanish banks largely have exhausted their stockpiles of ECB funds,
analysts say. Now the question is whether, after getting recapitalized by
the government, they will keep buying sovereign bonds.
There are signs that some banks are less than willing. Banco Bilbao Vizcaya
Argentaria SA, BBVA.MC 0.00% Spain's second-largest lender, said in late
April that it had kept its exposure to Spanish government debt steady in the
first quarter. BBVA replaced maturing government debt with new bond
purchases, but didn't increase its overall holdings, a spokesman said.
"Everybody's attention right now is on their banks and their ability to do
it," said Oliver Burrows, a senior bank-credit analyst at Rabobank
International. "You would hope they don't go out" and buy more sovereign
bonds, because that will only increase their perceived riskiness.
—Nicole Lundeen contributed to this article. |
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