financial

The 3.7 billion euros may be increased to 4 billion euros depending on demand. After the first day, the offer of bonds raised “high interest” according to financial sources. Citizens will be allowed to buy a minimum quantity of 1,000 euros and a maximum of 2 million euros. The Government is issuing bonds that expire in one year at an interest rate of 4.75%, and others expiring in two years at an interest rate of 5.25%. The Catalan Finance Minister stated that this bond offer is “safe and attractive”. It is the third emission of retail bonds in the Catalan Government’s history. The current bond emission mainly aims to replace those from the first emission, which expire next November 21st.

Andreu Mas-Colell, former Harvard Professor and the current Catalan Finance Minister, travelled to London to meet with financial representatives. The objective is to explain, first-hand, the Catalan Government’s austerity plans and its efforts to reduce the deficit and to foster the economic recovery. Mas-Colell met with City investors, banks and media, such as the ‘Financial Times’.

As carried out on two other occasions in the last year, the Catalan Government is preparing to release of 3,800 retail bonds to get cash. Financial sources informed ACN about the operation, which has not been confirmed by the Catalan Ministry of Economy. The bonds would be offered before November 21st, the day that the bonds issued by the former Catalan Government in autumn 2010 expire.

Thanks to this purchase, Sabadell United Bank, the US branch of the Catalan Banc Sabadell, significantly increases its size. Lydian Private Bank has assets worth 1,607 million dollars, client deposits of 1,224 million dollars and loans worth some 383 million. Sabadell is particularly strong in Florida, where it already has its US headquarters.

The president of the United States called on Monday evening, the Spanish Prime Minister to discuss the world economic situation, focusing on two main themes, the evolution of debt problems in Europe and the United States, and the growth of world economy.

The yield on Spanish bonds reached 400 points more than German ‘bunds’, a record since the introduction of the euro

Kenneth Rogoff, currently professor at Harvard, predicts that Spain has a “high chance” of being rescued by the European Union. He also ads that, if it were not rescued, even France could fall.

The President of the Catalan Government Artur Mas announced in Madrid that in 2012, if the People’s Party (PP) or the Socialist Party (PSOE) want CiU’s support to form a new Spanish Government, Catalonia needs more money and greater control over its own finances. Mas made these comments the same day his Government agreed a 400 million euros loan.

The board of the Catalan savings bank decided to “temporarily” use public capital in order to meet the new requirements in the sector. This move means it will reach 10.4% of ‘core capital’. Private capital is expected to increase its share “in the medium-term”.

The Catalan Government sent its austerity and viability plan to the Spanish Ministry of Economy for reviewing yesterday. The plan reduces the public deficit in more than 2 points and sets it at 1.3% for 2011. The finances of the Catalan Government are generating a wide debate at the moment, which is even been covered by international media.

The Catalan bank Banc Sabadell reaches the 8% milestone by issuing 126.4 million new shares, which represent 10% of its capital. The movement is part of the bank’s strategy to strengthen its capital, foreseeing the future stress tests and the Basel III rules.

In reaction to the latest announcement from the Spanish Government, the savings bank Unnim is studying ways of becoming a bank. The financial institutions is waiting for the Spanish Government’s new rules for the financial entities regarding their solvency and their “core capital”.

The Catalan savings bank owed the 1.63% of the oil company Repsol. By selling all its stakes, it earned 448 million, which represents a profit of 186 million euros. The financial entity made this operation to increase its core capital, in order to be ready for the banking stress test.

For the whole of Spain, Autonomous Communities’ public debt represents 10.2% of Spain’s GDP in the 3rd term of 2010. It is the highest it has been since 1990. However, the largest part of the public debt comes from the Spanish Government, which represents 44.1% of Spain’s GDP. Finally, public debt from local public administrations only represented 3.4% of Spain’s GDP. In total, Spain’s public debt represents 57.7% of the country’s GDP, much lower than in the UK, Germany or Ireland.

Various banks and savings banks are asking the Catalan Government to extend the total bond amount to 3,000 million euros. The Catalan Ministry of Economy will make the decision whether or not to extend the amount on Friday. The Catalan Government's debt bonds were issued for an initial amount of 1,890 million euros and further extended to 2,500 million euros due to their massive purchase by Catalan citizens