BBVA, Abanca and Banco Sabadell They provide financial support to the Valencian Community. The Generalitat has subscribed three loans for an amount of 1,800 million to these financial entities “designed to refinance FLA mechanisms for the year 2023 that will allow the autonomous administration savings in financial costs of more than 60.4 million in present value and for the entire term of these loans”, as reported by the Valencian Administration.
The Minister of Finance and Economy, Ruth Merinohas highlighted the importance of these operations just at the moment in which the Generalitat is facing economic and social reconstruction after the flood that devastated several municipalities in the province of Valencia. Furthermore, he has stressed that the trust placed in the Generalitat by financial entities makes it possible to alleviate the growing financial burden caused by the substantial increase in Treasury interest rates from their lows in 2021.
The interest rate at which the loans have been closed with the banks is “notably lower than 3.449%, which is the rate of the FLA 2023 loan, part of which is refinanced with this operation.” The outstanding balance of this loan is 8,391 million euros with final maturity in October 2035 and annual amortizations starting in October 2028.
BBVA is the bank that provides the most financing, with 1,000 million euros, which gives a saving in financial costs of 32.8 million euros in current value over the seven years of the loan for the Valencian Generalitat. The next loan by volume has been signed with Abanca for 500 million (will allow savings in interest of 17 million) and the third is Sabadell for 300 million (allows savings of 10.6 million).
Sources from BBVA, which is contributing the most to the operation, indicate that “it is one of BBVA’s largest financing operations for an institution and a singular loan, given its amount and economic conditions, which aims to help “the Generalitat to reduce the financial burden and be able to allocate the savings to face the economic effort that lies ahead, and especially to the recovery of normality after the DANA suffered by this region.”
Likewise, the bank conveys that this is part of “the historical commitment that the bank has with this region and, at this time, it wants to offer society, institutions and companies to contribute to the return to normality and alleviate the effects.” of the natural disaster that occurred at the end of last year.
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