Good News from Europe on Spain's Debt

Investors are becoming more optimistic about Spanish debt, according to a Bloomberg poll of global bond buyers and sellers.

Investors are becoming more optimistic about Spanish debt, according to a Bloomberg poll of global bond buyers and sellers.

Investors remain optimistic about the low risk of a default by Spain, the eurozone’s fourth-largest economy. Of those polled, 71 percent called a Spanish default “unlikely,” up six percentage points from the September poll.

“Spain’s economy appears to be stabilizing and its short- term debt is serviceable. So unless some of the peripheral economies collapse, a Spanish default is highly unlikely,” says poll respondent James Pillow, managing director for investments at Wells Fargo Advisors LLC in Orlando, Florida.

Leonardo Muller, a derivatives structurer at Banco Santander Central Hispano SA in Madrid, says Spanish banks were healthier than their Irish and Greek counterparts and that “markets can now differentiate” Spain’s economy “from those other problematic peripherals.”

By a 2-to-1 margin, U.S. investors agreed a Spanish default was unlikely, though Americans were almost twice as likely as European investors to anticipate a default by Spain or Italy.