Spanish bondholders to face Irish-style haircuts

clock

The current crisis in Spain will result in Spanish bank bondholders taking severe haircuts, after a similar scenario in Ireland last year, Henderson Global Investors says.

Yesterday, yields on benchmark 10-year Spanish bonds once again moved into dangerous and unsustainable territory above 7%. More worryingly, the country's 2-year bonds saw yields jump by 50bps in a single day, to 5.5%. Yields on the shorter-term debt have more than doubled from the 2.5% mark seen in March. The yield curve in Spain has flattened as a result, with the 10-year bond climbing more slowly from its March level of 5.18% to its current level of 7.19%. Henderson bond fund manager John Pattullo said the flattening of the curve in the last few months was a sign of stress in cre...

To continue reading this article...

Join Professional Adviser for free

  • Unlimited access to real-time news, industry insights and market intelligence
  • Stay ahead of the curve with spotlights on emerging trends and technologies
  • Receive breaking news stories straight to your inbox in the daily newsletters
  • Make smart business decisions with the latest developments in regulation, investing retirement and protection
  • Members-only access to the editor’s weekly Friday commentary
  • Be the first to hear about our events and awards programmes

Join

 

Already a Professional Adviser member?

Login

More on Investment

Advisers expecting more of asset managers since Consumer Duty

Advisers expecting more of asset managers since Consumer Duty

‘We actually need to understand one another better’

Hope Coumbe
clock 28 March 2024 • 1 min read
Fears tech limitations could stall MPS on its upward trajectory

Fears tech limitations could stall MPS on its upward trajectory

‘There have been a few changes and challenges around growth in general’

Hope Coumbe
clock 27 March 2024 • 1 min read
Partner Insight: Beyond 60/40

Partner Insight: Beyond 60/40

Invesco
clock 27 March 2024 • 5 min read