The Generalitat will return to the banking market to refinance €3,000 million of the FLA

BarcelonaThe Government continues the refinancing process of the debt it holds with the autonomous liquidity fund (FLA) that began last summer. The executive council has authorized the Generalitat this Tuesday to access the banking market to repay 3,000 million euros of the liabilities it had accumulated with the FLA through new loans. It does so, according to government agreements, to "continue reducing the cost of the Generalitat's debt and diversifying financing sources" with private sector partners.

With this move, the Generalitat continues the path it set last July, when it closed seven loans with six banking entities to refinance 3,500 million euros of the total debt it had accumulated with the FLA in the last decade. It did so in accordance with financial prudence regulations, which allow recourse to financial entities to cover indebtedness with the FLA as long as it results in savings in terms of interest. The 2025 operation, in a less restrictive interest rate environment than the last decade, made it possible to reduce the Catalan administration's financial expenses by 135 million euros until 2035. This year's operation, according to the executive's calculations, will serve to save approximately 127.6 million in the same period.

It should be recalled that since February, the Generalitat can once again finance itself in the banking market, a method for mobilizing resources that it had not had available since 2012, when it became completely linked to the FLA. The loans studied through this channel, however, must be approved by the Spanish government. The cost of these loans, moreover, is also limited by Spanish financial prudence regulations, which set a cap of 20 points above Treasury rates. In this regard, 293 million euros of new debt have also been awarded to three financial entities "at a very advantageous rate", "between 5 and 10 points" above the Spanish reference.

Interest among banks

The refinancing of the Generalitat's debt, even in the first instance, generated broad interest among the financial entities to which proposals were requested. Agreements were then reached for financing with CaixaBank, Santander, BBVA, and Banc Sabadell, among others. An average rate of 2.95% was established, about 55 basis points below the cost of borrowing set by the FLA. The availability of loans has improved after the rating agency Moody's improved the Catalan administration's solvency rating to Baa3 in October, a level that effectively removes the Generalitat from the list of unreliable debtors. "Catalonia generates more confidence among investors, and with this improvement, we reinforce our economic image and solvency," stated the Minister of Economy, Alícia Romero, at the time.