The Catalan Government continues trying to begin to diversify its financing sources after almost three decades tied to the Autonomous Liquidity Fund (FLA). While waiting for Congress to approve the reduction of 17,000 million euros, the Generalitat seeks to consolidate its return to the markets. It does so with a new debt operation of 293 million euros awarded to three financial entities for a cost equivalent to the Treasury bond and between five and ten basis points more. Specifically, 2.331%, as reported by the Department of Economy and Finance in a statement. That is less than the maximum required by the Generalitat of 20 basis points.
Last year, the Generalitat already returned to the markets by refinancing 3.5 billion euros. This year it plans to do the same, although it has slowed down that operation while waiting for the evolution of the financial markets, which are now going through a moment of turbulence due to the wars waged by the United States and Israel. On the other hand, it has closed the loan to finance part of the deficit it expects to incur this year. The operation was opened a few weeks ago, but has not been closed so far with three entities, the name of which the Generalitat has not provided.
According to the Executive, the conditions for this financing have been better than those proposed. These could not exceed an interest equivalent to that paid by the Treasury and a differential of 20 basis points, which in the end has been reduced to between five and ten. “This operation represents the normalization of the Generalitat with the financial markets, after more than a decade depending almost exclusively on the FLA,” highlighted the department led by Alícia Romero in a statement.
This is the first time that the Generalitat has asked the markets for financing for new long-term debt since it joined the FLA in 2012. Specifically, the duration of the loans contracted with the three entities is six years. According to the Catalan Executive, up to seven entities presented proposals for an amount greater than 1,000 million. That is, the Generalitat could have obtained more funds than it required.
