S&P Takes CreditWatch Actions On Four Spanish Banks

[Letsbereal]

TEXT-S&P Takes CreditWatch Actions On Four Spanish Banks
8 August 2012, Madrid (Reuters)
http://in.reuters.com/article/2012/08/08/markets-ratings-spanishbanks-idINWNA293820120808

-- Under the terms of the agreement with the eurozone to recapitalize its banking sector, several Spanish banks are likely to receive government support, and holders of those banks' hybrids and subordinated debt will possibly absorb losses.

-- We are therefore placing on CreditWatch with negative implications our 'BB+' long-term rating on Banco Popular Espanol S.A. (Popular). We are also maintaining on CreditWatch negative our ratings on Bankia S.A. (Bankia), Banco Financiero y de Ahorro (BFA), and Ibercaja Banco S.A. (Ibercaja). We are lowering our issue rating on Bankia's nondeferrable subordinated debt to 'CC' from 'CCC-'.

-- The rating actions affect only those Spanish banks whose ratings currently benefit, or are likely to benefit, from an uplift above their stand-alone credit profiles (SACPs) for short-term government support.

-- The CreditWatch negative status of the four entities mainly reflects uncertainty over how the recapitalization, if it were to happen, and associated restructuring plan could affect the banks' business and financial profiles, and thus their SACPs.

[larsonstdoc]

  These banks are all toast.  If it wasn't for the smoke and mirrors, they would already be toast.