Today France will be looking to sell Eur9.5bn of medium and long term debt. There seems to be some trepidation in markets that they may struggle to sell all, or achieve a decent rate of interest after the ratings downgrade by S&P.
I understand the logic of the concern, but the reality is european banks are sitting on Eur480bn'ish of 3 year money from the ECB and no one really thinks France will default in the near future, so my prediction is it will be a rip roaring success with a high bid to cover ratio as the ECBs QE by stealth works. I would also imagine that the French Tresor will have made a few calls to the major french banks reminding them who bailed them out earlier in the crisis, and calling in a few favours.
The crisis continues, but this will be a silver lining, not a cloud.
No comments:
Post a Comment