The Government places 293 million in debt to banks at 2.3% in the first operation in 14 years

BarcelonaThe Generalitat has announced that it has awarded 292.75 million euros of new long-term debt to three financial entities at an average rate of "very advantageous" 2.331% and lower than the maximum initially set. The Department of Economy and Finance has specified that the entities' offers tripled the amount requested by the Government and the final cost of the loans is between 5 and 10 basis points above the Treasury, when the limit set was Treasury +20 basis points (T+0.20%). This operation marks the Generalitat de Catalunya's return to the financial markets for the first time in 14 years after more than a decade relying almost exclusively on the Autonomous Liquidity Fund (FLA) to finance the deficit.

According to Economy and Finance, the Generalitat's request to obtain 292.75 million euros, approved by the executive council on February 10, generated "great interest" and up to seven financial entities submitted proposals for an amount exceeding one billion euros, meaning that the initial amount was tripled. After studying the offers received, the Government awarded the loans a few weeks ago to the three entities that offered the lowest differential compared to the Treasury's cost. Specifically, the average interest rate of the loans was 2.331% at the time of formalization.

In recent years, and in parallel with the public finance rebalancing process, the Generalitat has been diversifying its financing sources with several loans from the European Investment Bank (EIB), and in the summer it refinanced 3,500 million euros of FLA debt with private financial entities, to take advantage of the drop in interest rates and thus reduce the cost of debt.

The Generalitat received offers for an amount greater than requested and formalized a total of seven loans with six Spanish entities, with an estimated interest saving of 127.6 million euros. The Government's objective is to continue carrying out similar refinancing operations, provided that the evolution of interest rates allows for continued relevant savings. The three rating agencies that assess the Generalitat's debt (Moody's, Fitch and DBRS) now grant it an investment grade.