Spain To Ask For Bailout In Q1 2013 - Citi, Rabobank

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Spain's financing needs will likely push the government to make its ESM aid request before the end of the first quarter of 2013, said Citigroup and Rabobank.

"Q1 of next year will be very interesting for the markets as the sovereign issues will come back and Spain will ask for a bailout. We've seen a lot of pre-funding in 2012 going into 2013 which means January will be very quiet month from a sovereign issues point of view. By February and March, debt raising will come back and that will test some of the OMT resolution," said Antonin Jullier, global head of equity trading strategies at Citigroup in an interview with Bloomberg TV.

Same view is shared by Lyn Graham-Taylor, a fixed-income strategist at Rabobank who believed that yields on the Spanish government bonds will widen throughout Q1 of next year forcing Spain to ask for a bailout.

"From a political perspective, Spain PM Rajoy can't go into a bailout unless he is forced into it because it will be a political suicide to do so while yields are at sustainable levels," he clarified. 

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