Spain Won't Request Aid Until Well Ahead Into 2013 - BofA Merrill

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"We think that the probability of a voluntary request for support to European partners is low at this point, mostly because of divergences between Spain and the euro area authorities while market pressure remains limited. First, we believe Euro Area authorities are likely to ask Spain for deeper economic reforms and conditions and tighter fiscal adjustment as a prerequisite. In particular, pre-existing budget deficit targets look set to be missed this year and next. As well, pension reform still seems far away from being implemented. Conversely, Spain asked for the ECB to unveil the target yield that would be the ECB backstop, something the ECB has been unwilling to provide. Finally, Spanish borrowing costs are still affordable and supply pressure has reduced in the short term. Altogether we think this means Spain is unlikely to request support until well ahead into 2013."

Sergio Gamez, Ruben Segura-Cayuela, Sphia Salim, and Laurence Boone - Bank of America Merrill Lynch

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