LONDON (MNI) – The Spanish Treasury confirmed Monday that it has
issued E6 billion worth of bonds and bills in a direct placement to
Spain’s bank resolution fund, FROB, a source at the Treasury told MNI.
FROB will turn around and inject E4.5 billion of the proceeds
within days to the troubled Spanish lender Bankia-BFA, which failed
earlier this year after revealing hole in its books and was nationalized
by the government.
Last month, Bankia announced a loss of E4.4 billion, at which point
the government announced that it would make a downpayment via FROB on
the bank’s estimated E19 billion capital shortfall.
“It’s going to be a temporary injection, until the EFSF funds
arrive,” the source said.
Spain has agreed with the EU on a bank bailout that would provide
recapitalization funds of up to E100 billion. Of that amount, the EFSF
is expected to make E30 billion available more quickly for the more
urgent cases.
Full details of FROB injection will be posted Tuesday online at the
website of the Spanish government’s Official Bulletin (www.boe.es).
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