More S&P Downgrades in Spain

Last week we saw that Standard & Poor's had downgraded the credit ratings of Spain to BBB-. The move might as well have been a formal cut to junk bond status because the outlook was negative. Our take remains static: you have not seen the last of the credit rating downgrades for Spain nor for the rest of the PIIGS. Now we have seen today several regional cuts in Spain following last week's downgrade of the nation.

Fortunately, the move is not having any real negative impact as there are gains in Spain today on more bailout talks. Banco Santander, S.A. (NYSE: SAN) via: Santander BanCorp Ratings Lowered To 'BBB-/A-3' Following Downgrade Of Parent; Outlook Is Negative. Last night we saw that Banco Bilbao Vizcaya Argentaria, S.A. (NYSE: BBVA) was cut to BBB- from BBB+, and the outlook is negative. The regional cuts we have seen so far ar as follows:

Government-Related Entities ICO And SEPI Downgraded To 'BBB-/A-3' After Spain Downgrade; Outlooks Are NegativeSpanish Province of Barcelona Downgraded To 'BBB-' Following Similar Action On Sovereign; Outlook NegativeCorporacion de Reservas Estrategicas de Productos Petroliferos Cut To 'BBB-/A-3' After Action On Spain, Outlook Negative

Again, there will be more downgrades. We would also like to make a reminder that this was easy to see ahead of time because when S&P downgrades a sovereign nation it automatically begins the downgrades for everything in the nation that is effectively deemed under a government entity.

JON C. OGG