Spain’s banking rescue: the solution has become a problem, says AXA IM
The Spanish government’s request to the eurozone for financial assistance has raised more questions than answers, according to AXA Investment Managers.
In a report on Spain’s banking rescue, analysts at the company argued that exclusive funding from the EFSF is unlikely.
“We do not expect a ‘forced/blanket’ recapitalisation of the entire system, which would prejudice all bondholders and freeze funding access for even the best participants. While we believe hybrid and subordinate bondholders are at risk of burden sharing, we do not expect similar treatment for senior bondholders or covered bonds, at least in the short term,” AXA said.
Click here for the full report by Matthew Cairns, research and investment strategy, and Florian Grandcolas and Olivier Mouton, fixed income and credit research.