Recent drops in the Ibex 35 and the losses posted by companies in this index (especially those due to increased financing costs within the financial sector) are making us pay special attention to near-term private debt placements. In particular, we should focus on several companies that are suffering more than others as a result of their huge debt burdens.
This year, select stock that is in high demand is confronting debt placements that are rising to net prices of some 36,121 billion euros. Prominent among them are debt placements within the financial sector (about 60% of all placements) and the construction industry (about 23%). These are two sectors from the housing bubble, cutbacks in public infrastructure spending and an overall lack in faith in the financial sector resulting from the current sovereign debt crisis.
The key: enough credit to buy Repsol
Sacyr?s main ordeal is a focus for the industry. Given it has 7.98 billion dollars in debt, it has to face financial commitments of 4.97 billion euros this year. There is also another factor to consider. The total sum of this construction company?s financial agreements between 2011 and 2049 is greater than 7.98 billion euros, and it will have to pay back 62% of this debt by the end of this year.
ACS is another construction company facing a high debt payment. Even though the company?s value was recently reduced to 37.67 euros per share, market consensus says to hold on to this company, headed by Florentino Pérez.
The company has to pay off 16.5% of its debt, a figure that is even worse if they end up making payments due in 2012, which signify 32% of all financial obligations.
Translated and Edited in English by Brandon Dyches and Jose L. De Haro
