This report does not constitute a rating action. Overview Key strengths Key risks Almost certain likelihood of timely and sufficient extraordinary central government support if Sociedad Estatal de Participaciones Industriales (SEPI) faced financial distress. Potentially high financing needs from chronically loss-making companies in SEPI's portfolio. Highly strategic role for the Spanish state and its economy, given its responsibility to manage state holdings in strategic companies. Income that is influenced by economic cycles, due to a reliance on dividends from its listed companies. The company being subject to public law, so it cannot be privatized easily. Limited access to government guarantees, which apply only to bond and note issuances, leaving other borrowings unguaranteed. SEPI’s recent expansion of its portfolio is a
