The Portuguese sovereign’s access to funding has been a-ok thanks to the European Central Bank’s liquidity ops. That of its banks and corporates — not so much.
Off Bloomberg:
March 21 (Bloomberg) — Portuguese state-owned public transport companies including rail service operator CP-Comboios de Portugal and railway network manager Refer-Rede Ferroviaria Nacional have asked for state intervention as they face problems with financing, Jornal de Negocios reported, without saying how it obtained the information.
The companies are asking the Finance Ministry to anticipate compensation they receive through the budget as payment for the public service that’s provided, the Portuguese newspaper said. The possibility of Portugal’s Treasury providing loans to the state-owned companies is also being studied, according to Jornal de Negocios.
The Financial Times also reports on Tuesday that Refer has been forced to postpone its plans for a €500m syndicated bond. Meanwhile ratings agencies like Standard & Poor’s already cut the ratings of the two rail companies last month, because government support was “increasingly constrained by difficult financial conditions”.
More than that — Tuesday’s FT story cites Portugal’s central bank saying the country’s banks haven’t succeeded in issuing debt to international investors for almost a year. And we’re willing to bet that what funding is being done is on a short-term (read pre-ESM activitation in 2013) or ECB repo basis.
And if you’re still in doubt about that bank-(corporate?)-sovereign nexus in Portugal (and really, why would you be?) news reached us via Nomura’s Nick Firoozye that:
Portugal’s restatement of its 2010 deficit figures up to 8% due to one-offs intervention in Banco Português de Negócios, overshooting an original target of 7.3%.
Will the centre hold? Portuguese 10-year yields above 7 per cent suggests not.
Related links:
A problem for Portugal, charted - FT Alphaville
Portugal’s broken debt, the corporate connection – FT Alphaville
