Spain's economy minister Luis de Guindos will hold a press conference detailing the terms of the bank bailout shortly. It can be watched live, and without translation, at the link below. In summary, the Spanish bank bailout is apparently a loan targeting the FROB, and at rates better than the market. In other words, the cramdown of Spanish bondholders has officially begun.
- GUINDOS SAYS SPAIN WILL SEEK EUROPEAN BAILOUT FOR ITS BANKS
- GUINDOS SAYS CONSULTANTS' REPORTS TO BE PUBLISHED IN JUNE
- GUINDOS SAYS FROB WILL RECEIVE THE FUNDS
On the conditionality:
- DE GUINDOS SAYS AID CARRIES NO MACRO-ECONOMIC, FISCAL CONDITION
- GUINDOS SAYS BANKS GETTING AID WILL FACE CONDITIONS
- IMF ONLY HAS ADVISORY, SUPPORT ROLE FOR SPAIN, DE GUINDOS SAYS
And the important stuff:
- GUINDOS SAYS THIS IS NOT A `RESCUE'
- AID IS A LOAN IN VERY FAVORABLE TERMS, DE GUINDOS SAYS
- GUINDOS SAYS TERMS MORE FAVORABLE THAN MARKET RATES
And the most important stuff:
- GUINDOS SAYS FROB'S DEBT COUNTS AS PUBLIC DEBT
As noted above, the cramdown of Spanish bondholders has begun. Coupled with a Spanish sovereign debt/GDP which is about to soar even according to the most idiotic estimates which leave out all the contingent liabilities, we hope that, just as in the case of Greece, readers took our advice from January to heart and have put on the long Spanish UK-law bonds, short local-law bonds.
Because all hell is about to break loose in Spain once the initial short covering kneejerk reaction is over.