Debt Refinancing Has Allowed Castilla y León To Save 200 Million In Interest Since 2015

The Minister of Economy and Finance, Carlos Fernández Carriedo, has estimated this Monday at more than 200 million euros the reduction in spending on interest on public debt since 2015 -15 million in 2022 compared to 2021- due to the lower cost of the new operations that are arranged in comparison with those that have been amortized and due to the effect of the strategy to review the debt portfolio of the General Administration of the Community.

As claimed by the counselor, these refinancing have entailed a “notable reduction” in interest payments by replacing “certain operations” with “others with more favorable financial conditions . “

By way of example, he explained that in July 2021, 1,027.24 million euros of two loans subscribed with the Financial Facility compartment of the Financing Fund were refinanced, which were accruing annual interest of 0.817 and 0.877 percent , respectively, while the new operations have been closed at a fixed rate of zero percent, “so from now on nothing will be paid in interest,” he asserted.

To this he added that negative rate issues have been closed, “which means that investors disbursed a higher amount than the amount that will have to be repaid at the time of amortization”, explained the director who assured that it will mean a “important financial benefit” for the coffers of the Community estimated at more than 30 million euros during the entire life of the operation.

Having said this, he clarified that the Ministry has applied a “suitable criterion of prudence” to take into account in 2022 the “potential incidence of the upward trend that interest rates are experiencing, linked to the rise in inflation and the foreseeable progressive withdrawal stimulus announced by the European Central Bank “.

As reported in his appearance at the Economy and Finance Commission where he has exposed the details of the budget of the Autonomous Community for 2022 and those of his department, the ability of the Community to access debt markets has also been assessed, “It is significantly contributed to by the credit rating that Castilla y León has and which, according to the Moody’s rating agency, is Baa1, similar to that of the Kingdom of Spain,” he claimed.

Among the factors that determine this “favorable evaluation”, the “controlled levels” of deficit and “moderate volumes” of debt stand out -3.1 percentage points lower than the regional average (23.8 percent compared to 26.9 percent). percent) -, with a forecast of finishing 2022 below 23 percent, reports Ep.

In total, public debt credits are estimated at 1,300 million euros, which represents a decrease of 8.62 percent with respect to the last approved budget.

In the public debt chapter, he has defended that “the necessary credits” are budgeted for the reimbursement of long-term credits contracted by the General Administration of the Community in previous years, in accordance with the scheduled repayment schedule.

Thus, the items earmarked for this purpose in 2022 are estimated at 1,076 million euros, which will be allocated to the amortization of various issues of Community Public Debt securities worth 411.70 million euros and to the total or partial repayment of loans which were arranged both with multilateral financial entities, different private banks, and the Financial Facility Fund, as well as with the State Administration, via agreements for a joint amount of 664.28 million euros.

The counselor has sustained the fall of 9.13 percent compared to 2021 in the temporal distribution of the maturities of the operations that have been formalized. “All this saving in the public debt section will allow the objectives of the budget project to be financed with higher endowments,” he said.

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