Spain Confident on July Redemption, Won’t Need Aid

[Joanne98]

April 29 (Bloomberg) -- Spanish Deputy Finance Minister Jose Manuel Campa said that his country will have no trouble financing a 16.2 billion euro ($21.3 billion) bond redemption in July and won’t need to ask for European Union aid as Greece has.

Campa said in a phone interview yesterday that Spain would have no problems “at all” financing the redemption, which is the next bond to fall due. Asked if there was any chance Spain would need EU financial help, he said “no.” Spain is “surprised” by a downgrade yesterday from Standard & Poor’s, which is based on overly pessimistic growth forecasts, he said.

S&P cut its rating on Spanish debt to AA, putting the nation that was AAA-rated until January 2009 on a par with Slovenia, as it said Spain is underestimating its fiscal problems and overestimating its ability to grow. The risk premium on Spanish debt rose to the highest in more than a year and the cost of insuring its debt against default reached a record as concerns about Greece’s ability to pay bondholders spilled over into Spanish and Portuguese markets.

Campa said the rating move won’t change Spain’s borrowing plan for this year. It will continue to issue a 15-year bond “to ensure it has enough liquidity in the market” and may sell debt in dollars, he said.

http://www.businessweek.com/news/2010-04-29/spain-confident-on-july-redemption-won-t-need-aid-update1-.html