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Moody's To Junk Spanish Banking System In Hours

Tyler Durden's picture


Nearly two weeks ago we penned "These Three Spanish Banks Will Be Downgraded Tomorrow" which showed which banks had a rating higher than the sovereign following Moody's long overdue Spanish downgrade, and thus were about to be downgraded by many notches. Today, after a ridiculously long delay whose only purpose was to buy time, Moody's is about to junk virtually the entire Spanish banking sector, as was widely expected.The downgrade is expected to happen within hours.

From Expansion (google translated)

After cutting the rating of Baa3 and Spain to threaten to put Spanish debt at the level of junk bond no later than 30 days, has reviewed the notes of all banks. "We have reported a reduction of two or three notches (steps) to almost everyone. Do not look at individual financial statements of each entity. Do not discriminate, "added the sources.


And is that the sector is particularly annoying because automatically cut the rating of the bank once they do the same with the state. The statement, as indicated by financial sources will be announced after twelve hours have told the entities, ie, probably after 23:00 tonight.


The biggest problem is that many entities will enter into the very undesirable group of fallen angels. Typically, banks with a rating lower than the state and how it is now just one step from losing investment grade, most of the financial sector will receive a rating of junk bond. Possibly, only the big banks such as Santander, BBVA or get rid CaixaBank will fall to that level.


This is the third hit Spanish banks received in just over a month. Moody's has already cut the rating of several entities on 17 May. Downgraded the debt of 16 Spanish companies between one and three steps, also as a result of cutting Spanish debt rating a few days.

Of course, since no Spanish banks have access to the non-ECB mediated market, this move is largely symbolic but further cements the country's status as financial system pariah and the next Greece.

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Mon, 06/25/2012 - 07:59 | 2557269 GeneMarchbanks
GeneMarchbanks's picture

We already kicked the RA's out so we care not. Joke's on you because now you're stuck rating only US debt.

Mon, 06/25/2012 - 08:07 | 2557296 economics9698
economics9698's picture

Better print, opps Spain can't print, bummer.

Mon, 06/25/2012 - 08:11 | 2557301 GetZeeGold
GetZeeGold's picture



Can't they just call Germany?


Mon, 06/25/2012 - 08:27 | 2557330 Mitzibitzi
Mitzibitzi's picture

"Hi, Minty Printapoulus speaking, how can I help?"

"Hi, Minty, it's Juan. How's the family?"

"Very good, the free fruit deliveries are helping very much. Though my wife grows very tired from waiting in lines all the day."

"Good. Good. Say, Minty, you remember we talked about a delivery of product 'X'; the 'E10' kind, yeah? Well, can we place an order for say 5 billion units? We'll pay extra for quick - and quiet - delivery!"

"That will take some time, I think. We must, of course, see to our own needs, as well as those of Ernesto and Paddy. Luigi has expressed an interest, also. And I hear Cyprus Mike may also be in the market soon. But I'll see what I can do, my friend".


Mon, 06/25/2012 - 08:22 | 2557321 Coldcall
Coldcall's picture

who cares what the eu does re ignoring the rating agencies....we all know Spain is totally insolvent and no-one will touch their debt with a barge pole...we dont need any RAs to tell us that.

Mon, 06/25/2012 - 09:10 | 2557411 knukles
knukles's picture

Hah ha ha....

When you tell the NRSRO's that you don't need them anymore, you ain't gonna pay em', that they're work is a worthless piece of shit, attack their very business model and living, what the fuck you expect?

You should expect wholesale across the board downgrades as they "set things right", make amends, correct the errors of the past, become responsible, fix what's wrong....

Just be you, Europe they gonna be shafting to fix their problems.

Don't bite the hand that strokes your wally.

Mon, 06/25/2012 - 07:57 | 2557270 Comay Mierda
Comay Mierda's picture

when wall street tells you bad news is on the way, BTFD!

Mon, 06/25/2012 - 08:22 | 2557322 Stock Tips Inve...
Stock Tips Investment's picture

Unfortunately that is part of the price paid Spain (and also the rest of Europe) to try to end the crisis. At this time, Spain is the center of attraction of this problem. But this situation is all over Europe. We'll see to Italy and France to go through this same path. Finally, do not forget that UK and Germany (yes, Germany) are not far from facing the same crisis. We must prepare ourselves to face this situation ... and be ready to exploit any opportunities.

Mon, 06/25/2012 - 07:58 | 2557271 daily bread
daily bread's picture

If I post my neighbor's house as "collateral", will the ECB give me a billion euros?

Mon, 06/25/2012 - 08:02 | 2557284 lemosbrasil
lemosbrasil's picture

hahahahahah.......very good !


Mon, 06/25/2012 - 08:02 | 2557285 The Onion Of Tw...
The Onion Of Twickenham's picture

No need. Just register yourself as a Spanish Bank and offer a couple of beach towels as collateral. That ought to be good for a few billion.

Mon, 06/25/2012 - 08:27 | 2557329 j0nx
j0nx's picture

I pledge my cat's box as collateral. Those things are high in Nitrogen and make excellent fertilizer. I reckon I should get 2 or  3 billion for the box easily. Where should I go to collect my check?

Mon, 06/25/2012 - 07:57 | 2557272 timbo_em
timbo_em's picture

No need to worry. This week's EU summit will come up with a solution.

Mon, 06/25/2012 - 08:02 | 2557282 Ghordius
Ghordius's picture

let me guess? a plan!

Mon, 06/25/2012 - 08:15 | 2557311 Comay Mierda
Comay Mierda's picture

no! a plan to plan!

Mon, 06/25/2012 - 08:20 | 2557317 Ghordius
Ghordius's picture

I disagree. more is needed. let's have a plan cubed and call the thing fixed

Mon, 06/25/2012 - 08:42 | 2557359 GetZeeGold
GetZeeGold's picture



Let me help.....I'll call the press conference.


Mon, 06/25/2012 - 08:52 | 2557382 timbo_em
timbo_em's picture

I'm betting the farm that on friday EU leaders will decide to plan a schedule to come up with a plan that gives some blurry details about a vision how the EU and the Eurozone should look like in 5 to 10 years. One should also look for sentences like " sending a strong signal to the markets", "we're on the right path", "bla bla bla helps to restore confidence". It all feels pretty Soviet Union to me.

Mon, 06/25/2012 - 08:08 | 2557300 Taterboy
Taterboy's picture

Why don't they just call up Obamie and ask him what to do. He'd have the answer because everyone from the MSM has told me he's the smartest president ever! And they are like the second smartest people ever. I know  because they tell me this everyday and they are "Journalists". So it must be true. World fixed.

Mon, 06/25/2012 - 07:58 | 2557273 LMLP
LMLP's picture

amigos adiós ves ahí abajo


Mon, 06/25/2012 - 08:01 | 2557278 Colonel
Colonel's picture

The Three bankster Amigo's get junked.

Mon, 06/25/2012 - 07:58 | 2557274 battle axe
battle axe's picture

Moody's: you can always count on a ratings agency to be late with a downgrade. Pathetic....

Mon, 06/25/2012 - 07:59 | 2557276 Barometer
Barometer's picture

CREDIT RATINGS.....you're doing it wrong

Mon, 06/25/2012 - 08:01 | 2557280 TrumpXVI
TrumpXVI's picture

There must be some mistake.

Moodys hasn't heard about the Spiderman towels.

Mon, 06/25/2012 - 08:02 | 2557283 LMLP
LMLP's picture

How are these fuckers (ratings agencies) still in business??? ALL of the sub prime is their friggen fault!!


Mon, 06/25/2012 - 08:03 | 2557287 doomandbloom
doomandbloom's picture

We dont need no CRA..

We dont need no damn junk ratings..

Hey CRA....leave them PIIGS alone...

Mon, 06/25/2012 - 08:04 | 2557288 The Swedish Chef
The Swedish Chef's picture

"Within hours"... Let me guess, they will announce it in exactly three and a haf hours, right after the European close?

Mon, 06/25/2012 - 08:13 | 2557308 LouisDega
LouisDega's picture

No, it's when Tyler comes back from lunch.

Mon, 06/25/2012 - 08:24 | 2557324 The Swedish Chef
The Swedish Chef's picture

Which is when? 23.00 GMT?

Mon, 06/25/2012 - 13:00 | 2558222 LouisDega
LouisDega's picture

What do i look like, His fucking secretary? Jesus H... Besides, My hairy legs dont look good in pantyhose. 

Mon, 06/25/2012 - 08:05 | 2557289 slewie the pi-rat
slewie the pi-rat's picture

in slewienomics, thie is bullish for:  risk0ff

Mon, 06/25/2012 - 08:06 | 2557293 Donlast
Donlast's picture

Why are bank bondholders continuously safeguarded?  Why are they not forced to accept a haircut?  They displayed the same indifference to risk and real estate bubbles as the bankers and politicians - and Keynesians. 

Mon, 06/25/2012 - 08:11 | 2557294 AUD
AUD's picture

I'm still waiting for Moody's to junk the Federal Reserve System. While they're at it they might as well junk the BoE, BoJ, RBA.......

Mon, 06/25/2012 - 08:08 | 2557298 cherry picker
cherry picker's picture

If I were a RBS/NatWest Customer I would pull my money.

This bank thing will spread to England and it is about time a bank run took place, for no other reason that if regulators aren't regulating and banks are lying along with their paid for politicians, then it is time for the people to show them they do not appreciate being made fools of.

I hope you are not a fool, take what is yours and put it in a safe place or big bro or a facsimile thereof will relieve your assets for you.

Mon, 06/25/2012 - 08:16 | 2557314 LeisureSmith
LeisureSmith's picture

I hope you are not a fool, take what is yours and put it in a safe place or big bro or a facsimile thereof will liberate your assets for you.

Fixed it.

Just like muggers liberate people of their vallets every day.

Mon, 06/25/2012 - 08:30 | 2557333 j0nx
j0nx's picture

A what?

Mon, 06/25/2012 - 08:40 | 2557350 LeisureSmith
LeisureSmith's picture

A Wallet.... I will promptly junk myself (if possible) for being unfunny and a terrible speller.

Mon, 06/25/2012 - 08:31 | 2557334 Mitzibitzi
Mitzibitzi's picture

Were you channeling The Count from Sesame Street for a second, there?

Mon, 06/25/2012 - 08:10 | 2557302 Gmpx
Gmpx's picture

Moody's should junk itself, then S&P and Fitch. After that Moody's can start junking others.

Mon, 06/25/2012 - 08:11 | 2557304 ZeroPoint
ZeroPoint's picture

Via con dios amigos. Kiss your Keyesian asses goodbye.


Mon, 06/25/2012 - 08:14 | 2557309 ugmug
ugmug's picture

This just proves the old adage that 'junk always rises to the top'

* the cream has already been siphoned off by Goldman Sachs....



Mon, 06/25/2012 - 08:14 | 2557310 Death and Gravity
Death and Gravity's picture

Sorry if this sounds facetious, but if I know the US market well, it'll rally when the news hits.

Mon, 06/25/2012 - 08:19 | 2557315 marco1324
marco1324's picture

My father in law has all his eggs in the one basket that is Santander in the UK. After all I have read on ZH Ive told him maybe he should move his investments out, but he won't listen. So the question is this, is he fucked?

Mon, 06/25/2012 - 08:35 | 2557342 Mitzibitzi
Mitzibitzi's picture

Santander UK is technically a seperate entity to the main Santander operation, sharing only some management and backroom support. As such, it is pretty much independent of anything that happens to it's parent company and money will certainly not be plundered to keep foreign sections of the company afloat, so... yes, he's fucked! No doubt about it.

Mon, 06/25/2012 - 08:55 | 2557388 Diplodicus Rex
Diplodicus Rex's picture

You mean technically separate in the Corzine type of way?

Mon, 06/25/2012 - 09:20 | 2557451 Alejandrito
Alejandrito's picture

Ana Patricia Botin doesnt agree with you.

Mon, 06/25/2012 - 08:40 | 2557354 mvsjcl
mvsjcl's picture

Does a bear...

Mon, 06/25/2012 - 08:28 | 2557332 Mister Ponzi
Mister Ponzi's picture

Moody's has not as strict conditions as S&P regarding the rating ceiling of corporates. Specifically, corporates can have up to two notches uplift relative to the souvereign when a majority of their revenues is created outside the home country (as in the case of Santander). So, expect Santander and BBVA to be rated *above* the sovereign, likely at Baa2.

Mon, 06/25/2012 - 08:35 | 2557341 Txo
Txo's picture

Burden sharing MUST happen in a few spanish banks. Unless Spains gifts the Eurocup to Germany, that is.

Mon, 06/25/2012 - 08:40 | 2557349 the not so migh...
the not so mighty maximiza's picture

Junkapooliza 2012, except there are no druged out girls having sex with everyone.


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