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News Link • Economy - International

Spanish Banks’ Bonds Slide After Moody’s Downgrades Ratings

•, By John Glover

Bonds of Spanish banks fell after Moody’s Investors Service downgraded 16 of the nation’s lenders and said it may cut seven of them again because of the state of the economy and the government’s deteriorating credit.

The yield premium investors demand to hold the 1 billion euros ($1.23 billion) of senior unsecured 4 percent bonds due 2017 of Banco Santander SA (SAN), whose rating was cut three levels to A3 to match the sovereign, rose to 503 basis points more than similar-maturity German debt, according to Bloomberg Bond Trader. The spread demanded over the benchmark swap rate, 250 basis points when the notes were issued in March, rose to 392 basis points, the prices show.

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