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MNI INTERVIEW: DBRS Says Spain Baseline Scenario Unchanged

MNI (London)
--Ratings Firm to Issue Closely-Watched Review on Friday
By Jack Duffy
     PARIS (MNI) - The Canadian ratings firm DBRS has not altered its "baseline"
view of Spain following Sunday's disputed vote for independence by Catalonia,
its wealthiest region.
     "Our baseline scenario has not changed," Nicolas Fintzel, vice president of
global sovereign ratings at DBRS, told Market News International in an
interview. "Our baseline scenario is for continued unity for Spain." 
     DBRS is set to review its rating on Spain this Friday. Its current rating,
A (low) with a stable outlook, allows Spanish government debt to qualify for a
higher level of collateral, which means lower haircuts when used by banks to
borrow from the European Central Bank.
     Fintzel, who said he could not comment directly on Spain's credit rating
because of the imminence of the review, added "obviously we will see how the
situation evolves. It is very fluid."  
     Catalonian schools, business and public transport services shut down on
Tuesday in a one-day strike to protest the violence that erupted on Sunday when
police intervened to bar voters from polling stations. 
     Fintzel said the clashes could boost public support for independence and
for the regional Catalan government, making a negotiated solution with Madrid
more difficult. 
     "The baseline scenario that it would have been difficult for the current
Catalan government to renew its majority in a snap election is now being
challenged," he said.
     Fintzel said, however that the rating firm was standing by a report it
issued in August concluding that "under DBRS's most likely scenario...Spain is
expected to preserve its unity over the medium term."
     The view reflects the Madrid government's staunch opposition to Catalonia
independence, the substantial legal and institutional obstacles as well as the
"strong economic growth and the rapid reduction in unemployment both in Spain
and in Catalonia," the DBRS report said. 
--MNI Paris Bureau; tel: +33 1-42-71-55-41; email:
--MNI London Bureau; tel: +44 203-586-2225; email:
[TOPICS: M$E$$$,M$S$$$,M$X$$$,MR$$$$,MX$$$$,M$$FI$,MGX$$$]
MNI London Bureau | +44 203-865-3812 |

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