The Spanish Authorities arrange two assure strains (líneas de avales) managed via the Spanish Official Credit score Institute (Instituto de Crédito Oficial – ICO) to take care of the financial impression of COVID-19.
The primary ICO assure line, of as much as EUR 100 billion, was arrange by Royal Decree-law 8/2020, of 17 March masking financings granted to corporations and the self-employed for working capital functions.
The second ICO assure line, of as much as EUR 40 billion, was arrange by Royal Decree-law 25/2020, of three July masking financings granted to corporations and self-employed for working capital and funding functions.
On 18 November 2020 the Spanish Official Gazette printed Royal Decree-Regulation 34/2020, of 17 November, on pressing measures to help the solvency of the enterprise, the vitality sector and on tax issues, which amends sure phrases of those ICO assure strains and which entered into pressure on 19 November 2020.
This briefing summarises probably the most related measures of Royal Decree-Regulation 34/2020, of 17 November, in relation to the ICO assure strains.
Extension of maturity dates
On the debtor’s request, credit score establishments, monetary credit score institutions, digital cash establishments and cost establishments are obliged to increase the maturity date of the financings granted beneath the RDL 8/2020 assure scheme by as much as three further years. The associated ICO assure shall be prolonged accordingly.
Following the extension, the maturity of these financings can’t exceed eight years from its unique date
Extension of grace durations
On the debtor’s request, credit score establishments, monetary credit score institutions, digital cash establishments and cost establishments are additionally obliged to increase the grace interval for compensation of the principal quantity of the financings granted beneath the RDL 8/2020 and RDL 25/2020 ICO assure strains by as much as twelve further months. The corresponding ICO ensures will stay in place beneath the brand new compensation phrases.
Following the extension, the full grace interval for these financings can’t exceed twenty-four months.
The events can agree so as to add the principal quantity comparable to the grace interval instalments to the ultimate instalment, to use it professional rata throughout the remaining instalments, or a mixture of those two options. If no settlement is reached between the events the principal quantity comparable to the grace interval shall be utilized professional rata throughout the remaining instalments
Working capital strains most quantity
Till 30 June 2021 credit score establishments, monetary credit score institutions, digital cash establishments and cost establishments can’t cut back the utmost quantity of working capital strains granted to debtors that profit from the RDL 8/2020 and RDL 25/2020 ICO assure strains.
Necessities to profit from the brand new measures
The next necessities have to be complied with with the intention to request the appliance of the abovementioned new measures:
1. neither the financing beneath the assure scheme nor every other financing granted to the identical debtor by the identical monetary entity is in cost default for greater than ninety days;
2. the borrower shouldn’t be in a state of default as on the date of the signing of the extension in response to info from the Financial institution of Spain’s Danger Data Middle (Central de Información de Riesgos – CIRBE);
3. no default in relation to the financing beneath the assure scheme has been notified to the ICO by the monetary entity as of the date of the execution of the extension;
4. the borrower shouldn’t be present process insolvency proceedings; and
5. the debtor complies with the boundaries set out within the European Union State Help rules. Moreover, for the appliance of measures described in paragraphs 1 and a couple of above the next necessities have to be met: —the financing beneath the ICO assure scheme was executed earlier than 18 November 2020; and —the request to use the measures is made by 15 Might 2021.
Following the debtor’s request, the monetary entity has a interval of thirty days to test that the abovementioned necessities have been met and to inform the modification of the assure to the ICO.
Value of the financing and assure charges
The prices of the financings affected by the brand new measures shall be in keeping with the prices charged earlier than any relevant extension however may be elevated to mirror the impression of any improve within the assure charges relevant to those extensions.
The assure charges can be established by the Council of Ministers.