There is an almost-certain likelihood of timely and sufficient extraordinary central government support in the event of financial distress. Sociedad Estatal de Participaciones Industriales's (SEPI's) role is highly strategic for the Spanish state and its economy, given its responsibility to manage state holdings in strategic companies. The entity is subject to public law and cannot be privatized easily. Some of SEPI's companies are chronically loss making, implying higher financing needs for the instution. The organization's income could be influenced by economic shocks, due to its reliance on dividends from its listed companies. The state only provides an explicit guarantee over SEPI's debt issued in the financial markets and not on other borrowing sources. The negative outlook mirrors that on Spain.
