Halister News

(Bloomberg) -- Catalonia’s short-term debt maturing in November, around EU290m, will be a key indicator for the safety of Spanish assets amid a push for independence by regional secessionists, according to UniCredit chief economist Erik Nielsen.

• “The risk of this getting a lot worse, with correspondingly bad market development for Spanish assets, is still too great for my risk appetite,” he writes in note to clients
  • “One indication I’ll be looking for is a firm statement from Madrid that they’ll pay the maturing Catalonian debt when it falls due in November,” as it is not covered by the FLA -- a credit line the central government created to lend money to regions
• “I think Madrid will pay, but I’m nervous about their tough stance more broadly”
• NOTE: Short-term debt value initially flagged by S&P credit rating report Oct. 4, which noted that refinancing would require authorization from the central government

To contact the reporter on this story: John Ainger in London at jainger@bloomberg.net To contact the editors responsible for this story: Ven Ram at vram1@bloomberg.net Anil Varma