Sociedad Estatal de Participaciones Industriales (SEPI)

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 is influenced by economic cycles, due to its reliance on dividends from its listed companies. The entity is subject to public law and cannot be privatized easily. The state may only provide an explicit guarantee on SEPI's debt issued in the financial markets and

...We would lower our ratings on SEPI if we took a similar rating action on Spain. We would also lower the ratings on the entity 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 the entity from being privatized, or if the government decides not to provide subsidies when necessary....

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