Is Spanish Regional Debt Out Of Control?

Tyler Durden's picture


Spanish regional debt currently stands at 13% of GDP and has surged from EUR60bn in 2006 to over EUR140bn currently. As Credit Suisse points out, the top four regions account for the majority of GDP, two-thirds of regional debt, and, with the exception of Madrid, substantially missed their deficit targets. What is more worrisome is the heavily front-loaded nature of the maturing debt with substantial refinancing needs in the next 2 years and this regional debt is split between bonds and loans - with many of the latter from Spanish banks - yet another illustration of the interconnected contagion that is building more rapidly. The growing crisis in refinancing (liquidity and costs) for regional debt developed the idea of Ponzibonos 'Hispabonos' - debt issued by regions but guaranteed by the central government. The conditionality of these guarantees with regard to deficit targets wil be critical but once they are issued, the risk is that the regions are unable to get their finances under control, the Spanish debtload increases, and there is no longer the flexibility for a regional debt restructuring, should one be necessary.

Spanish regional debt has grown dramatically in recent years...

But the refinancing needs are massively front-loaded (and rely not just on markets but the banks to roll loans also)...



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Fri, 03/30/2012 - 11:52 | 2303663 vmromk
vmromk's picture

Nothing that an ASSHOLE named Bernanke can't fix with an HP printer running at full blast.

Hey Bernanke, FUCK YOU.

Fri, 03/30/2012 - 12:25 | 2303756 Vampyroteuthis ...
Vampyroteuthis infernalis's picture

Not much different across the pond. Who are we kidding?

Fri, 03/30/2012 - 18:36 | 2305140 DorseyCecil68669
DorseyCecil68669's picture

my friend's aunt makes $72/hr on the internet. She has been without work for six months but last month her payment was $19183 just working on the internet for a few hours. Here's the site to read more .....

Fri, 03/30/2012 - 11:57 | 2303677 walküre
walküre's picture

Now listen Tylers, the ECB just approved a FIREWALL of 800 billion Euros. Just today! Don't ask where the money is coming from or how it's being entered on the balance sheets. Ha, balance sheets. Let the accounting geniuses figure that out! So anyway, we may just need another trillion or so to absorb all the revolving debt out there and maybe another trillion or two or three to keep the operating status quo, but it's not like we can't do that! We just increase the LTRO LFSESELSOE FIREWALL or what have you and voila, sieh da, opa, hola! It's all good. NEXT!

Fri, 03/30/2012 - 12:04 | 2303695 schatzi
schatzi's picture

Which German politician called it the tower of Babel? Weidmann? Stark?

Fri, 03/30/2012 - 12:14 | 2303726 walküre
Fri, 03/30/2012 - 12:09 | 2303708 Forgiven
Forgiven's picture

Is it too much to ask the dipshits at Credit Suisse to learn how to make graphs?  The symbols used for each of the components are so similar it makes comparison of the smallest regions over the time period impossible.

Fri, 03/30/2012 - 12:19 | 2303743 oogs66
oogs66's picture

The title is a rhetorical question. Right?

Fri, 03/30/2012 - 13:09 | 2303915 SheepDog-One
SheepDog-One's picture

Really, at this point does any of it even matter in the least? All disbelief has been permanently suspended, onward down the rabbit hole we go day after day. 

Fri, 03/30/2012 - 13:23 | 2303987 oldman
oldman's picture

Tyler, Why don't we have as much coverage of the states debt in the US as we do of all the 'euroland' regional and provencial debt?

Many of us are as intrerested in our own problems as we are of the 'euroland's problems.

Thanks for an interesting piece, but--------------------       om

Fri, 03/30/2012 - 19:21 | 2305237 Thecomingcollapse
Thecomingcollapse's picture

I agree with you... not much published on that!  I know if you go to the US Debt Clock site you can go to the bottom and they have links to debt clocks for individual states.

Fri, 03/30/2012 - 20:05 | 2305302 sodazed
sodazed's picture

It's ironic that they talk about creating firewalls when most Spanish regions would be in the black if they didn't spend so much on fireworks and fiestas. As an example, go to Valencia between 1st - 19th March (a wonderful city btw) and you'll see exactly what I mean. Look up "Fallas" on Youtube to get a feel for it.

Don't get me wrong, I love Spain as a country but it needs to move with the times if it wants to remain in the "have-now-worry-later-suped-up-Seat-on-low-interest-long-term-finance" iworld.

I mean, I can understand the concept of "not being able to work in the fierce heat of the mid-day sun so lets shut down the whole country, have a long lazy lunch - inc wine - then have a leisurely lay down for a while" type mentality, but not continued through the Winter when the weather can be quite chilly which makes this concept obsolete. And also lets not forget about the vast amount of people who work in air-conditioned buildings all year round which makes the whole "siesta" business totally obsolete.

People of Spain: CHANGE SOME OF YOUR CULTURAL PRACTICES! NOW! It's for your own good...

This is tough love as I really love Spain and wish the spotlight would f*ck off and shine somewhere else. AFTER GREECE, SHINE ON ITALY NEXT. WHY? 'COS IT SMELLS!!!!

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