Sociedad Estatal de Participaciones Industriales

This report does not constitute a rating action. Overview Key strengths Key risks Almost certain likelihood of timely and sufficient extraordinary central government support in the event of financial distress. Some of SEPI?s companies are chronically loss making, implying higher financing needs for the institution. Sociedad Estatal de Participaciones Industriales (SEPI) has a highly strategic role for the Spanish state and its economy, given its responsibility to manage state holdings in strategic companies. The organization?s income could be influenced by economic shocks given its reliance on dividends from its listed companies. The entity is subject to public law and cannot be privatized easily. The state only provides an explicit guarantee on SEPI?s debt issued in the financial markets and not

...We could lower our ratings on SEPI if we take a similar rating action on Spain. We could also downgrade the organization if we assess that its role for and link with the Spanish government and, in turn, the likelihood of central government support, has weakened. This could happen if the central government changes SEPI's public status, which currently prevents it from being privatized, or if it decides not to provide subsidies when necessary....

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