Resolution Of 31 Of July Of 2015, Of The Secretariat General Of The Treasure And Political Financial, By Which Is Defines The Principle Of Prudence Financial Applicable To The Operations Of Debt And Derivatives Of Them Communities Autonomous And Entity...

Original Language Title: Resolución de 31 de julio de 2015, de la Secretaría General del Tesoro y Política Financiera, por la que se define el principio de prudencia financiera aplicable a las operaciones de endeudamiento y derivados de las comunidades autónomas y entidad...

Read the untranslated law here: http://www.boe.es/buscar/doc.php?id=BOE-A-2015-8775

It law organic 8 / 1980, of 22 of September, of funding of them communities autonomous, establishes in its article 13 bis that «all them operations financial that sign them communities autonomous, in accordance with it planned in the article 2.1 of the law organic 2 / 2012, of 27 of April, are subject to the principle of prudence financial» relapsing in the Secretariat General of the treasure and political financial it definition of said principle in it referred to passive financial.

On the other hand, the consolidated text of the Act regulating the local Haciendas, approved by Royal Legislative Decree 2/2004, of 5 March, says in its article 48 bis that "all financial operations which have agreed the local corporations are subject to the principle of financial prudence," principle whose definition corresponds, with regard to financial liabilities, the General Directorate of the Treasury and financial policy.

In addition, the Real Decree-Law 17 / 2014, of 26 of December, of measures of sustainability financial of them communities autonomous and entities local and others of character economic, creates the background of funding to communities autonomous and the Fund of financing to entities local. Adherence to the autonomous communities Financing Fund, either in its compartment ease financial or regional liquidity fund, brings the subject to the conditions of financial prudence in the terms fixed by the General Directorate of the Treasury and financial policy. In addition, according to the mentioned Real Decree-Law 17 / 2014, the operations instrumented in values and operations of credit to long term will require of authorization express of the Secretariat General of the treasure and political financial.

This resolution defines the principle of financial prudence on the financial operations of the autonomous communities and local entities. For the definition of this principle, the General Secretariat has taken into account the principle of sustainability of public finances laid down in article 4 of the organic law 2/2012, April 27, budgetary stability and financial sustainability, which ensures the capacity of public administrations to finance its commitments to current and future spending within the limits of deficit public debt and late payment of commercial debt.

By all it earlier, this Secretariat General has determined: first. Scope and principle of financial prudence.

The autonomous communities and local entities may only conclude operations of indebtedness and financial derivatives in the terms established in the following paragraphs.

For the purposes of the provisions of this resolution is understood by autonomous community and Local authority both the administration of the autonomous community and the Local Authority as the other institutions, bodies and agencies dependent on those, including in the public administration sector, autonomous sub-sector and sub-sector local corporations, according to the definition and delimitation of the European system of national accounts and regional of the European Union.

Second. Instruments.

1. the autonomous communities and local entities within the scope of this resolution, can perform operations of indebtedness by, among others, the following instruments: a. certificates of debt under German law (Schuldschein).

b. values to long term negotiable or not, issued by emission public or private, in markets wholesale or directed to the segment retail.

c. short-term financing instruments.

d. long-term loans.

e. finance leases.

The use of instruments different to them earlier will be subject to it planned in the paragraph seventh of the present resolution.

2 in any case, to the autonomous communities attached to the bottom of financing autonomous them shall apply the articles 19.1. to) and 24.b) Royal Decree-Law 17/2014, according to which 'not can perform operations instrumented values or credit operations in the long term, unless prior authorization of the General Directorate of the Treasury and financial policy without prejudice to the mandatory authorization of the Council of Ministers «, in accordance with article 14 of the law 8/1980 of 22 September, financing of the autonomous communities '.

Third. Conditions financial of the operations of indebtedness.

He cost total maximum of them operations of indebtedness, including commissions and other expenses, except them commissions cited in the annex 3, not may overcome the cost of financing of the State to the term half of it operation, increased in the differential that corresponds according to it established in the annex 3 of this resolution.

The autonomous communities and local entities that have proprietary assessment tools or independent external advice may determine at the time of the operation cost of financing from the Treasury on the basis of the methodology contained in annex 2 of this resolution.

The rest of administrations, to know the cost of each medium-term State funding, will use the table of fixed rates or the differential applicable maximum on each reference published monthly, by a decision, the General direction of the treasure. The published maximum cost will remain in force while new costs are not published.

In the case of securities issues, the corresponding administration shall establish the price using annex 2 of resolution.

The fulfilment of the condition of maximum cost will be considered at the time of opening of the process of bidding for public tenders, or at the time of presentation of firm bids by financial institutions for funding through bilateral negotiation. The autonomous community must explain the use of annex 1 or 2 for prior bilateral negotiations in both the tender, and must reflect the offers submitted by financial institutions the methodology chosen by the community. In the case of emission values, the fulfilment of the condition of maximum cost will be considered at the time default for price fixing day in which emission is released.

Them operations susceptible of be covered by the Fund of financing to entities local will have a plan of depreciation in which them liquidations of interests will coincide with the dates of maturities of main.

Room. Coordination of the emissions.

Those Governments who plan to perform an operation described in point 1.b of the second paragraph, must notify the Treasury the planned amount of the operation, the date for his execution and the objective term.

In the case of the public broadcasts, communication must be at least of 7 days. For them placements private, the notice only will be mandatory if the amount of them same is superior or equal to 500 million of euros and must perform is with an advance minimum of two days working.

If the Secretariat General of the treasure and political financial not is pronounce in the day skillful following to the reception of it communication for issue values negotiable, is means that the operation may announce is and/or run is in them dates proposed, whenever is respect the rest of conditions established in the present resolution.

Fifth. Operations of derivative financial.

1. is may hire swaps, options and future of types of interest and of type of change according to the conditions standards of the market.

2. in case of make is an operation of debt in currency different from the euro, the risk Exchange must cover is with a contract of swap financial, unless existed a coverage natural. He cost of such swap financial is incorporated to the calculation of the cost total of it operation, that not can overcome them limits set according to it established in the paragraph third.

In the case of operations as borrowing in a currency other than the euro prior to the entry into force of funding funds to the autonomous communities and local entities, the foreign exchange risk in conditions may cover market standards.

3. in the case of local authorities, as provided for in paragraphs 1 and 2 of the present fifth paragraph shall apply without prejudice to the established in the regulatory legislation of local treasuries.

4. the use of more complex financial derivatives, with high assumption of risk, as the options with leveraged risk, derivatives referenced to the change in slope of the curve of interest rates, which linked interest rates of different currencies, the referenced to the evolution of stock market indices, linked to the variation between currencies, or combinations between them It will be subject to the provisions in the seventh paragraph of the present resolution.

5. in no case may hire is: to. derivatives financial defined in the point 4 above without a cost maximum, except if is is of swaps financial of types of interest or of options of type of interest with risk of assume a type variable without differential penalty.

b. derivative financial where is assume the risk of any index of prices except when the purpose of the derivative is the Elimination of the cited risk.

c. derivative financial that pose a deferral in the load financial or an increase of the funding.


When, as result of the restructuring of a derived financial, or of a loan to type fixed built starting from a financing to type of interest variable and a swap of type of interest floating implied, is bearing a cost of rupture payable by the administration corresponding, this may be output in the new type fixed of the derived restructured, or in the new type fixed of the loan to type fixed , as appropriate. This shall not be considered a deferral in the financial burden or increase in funding. New type exceed the limits as set out in the third paragraph only for the share of the cost of breaking.

d. financial derivatives contracted out reasonable market prices. For rating this circumstance, the community autonomous or entity Local must dispose of tools of valuation own or count with an advice financial external independent.

e financial derivatives containing clauses of resolution anticipated as a result of a drop in the credit rating.

6. the formalization of financial derivatives will require the signature of a contract standard framework in which the rights and obligations of these operations are collected. Also, you can sign a contract of collateralization standard in the market.

7 derivatives contracted prior to the entry into force of this resolution and that have not expired, shall remain subject to the ISDA, CMOF contracts or similar to be in force at the time of hiring.

Any migration of these derivatives to new framework contracts specified in paragraph 6 above may not make any disbursement of the autonomous community or Local entity in any case.

Sixth. Prohibitions: will be prohibited them following operations of indebtedness: to. those operations of indebtedness not instrumented in values that include derivatives implicit in them contracts, included the options of depreciation early to request of the creditor financial. However, not will be prohibited the inclusion of options of amortization advance on the part of the debtor.

The operations of financing to type of interest fixed built starting from a financing to type of interest variable and a swap of type of interest floating implied, will be allowed if respect the rest of conditions established in the present resolution.

b.. those whose financial structure entailing a deferral of the financial burden. The emissions coupon zero only will be permitted for periods equal or lower to 18 months.

c. those that contain clauses trigger linked to ratings credit u other variable financial that pose the amortization advance of the debt or a change in them conditions financial of the same.

Only will be valid the clauses trigger of change of the type of interest applicable, for the case in that them maturities of them operations of indebtedness leave of be covered by them funds of funding to communities autonomous and to entities local since it administration corresponding decided out of the Fund. In any case the new type of interest may contravene the cost maximum set for communities autonomous not attached to the background of funding to communities autonomous and the cost maximum of them operations not covered by the Fund of financing to entities local, according to is established in the annex 3 of the present resolution.

d. operations of indebtedness not instrumented values derived from the subrogation of the General Administration on financial contracts of its agencies and public bodies involving the assumption of debts previously guaranteed by the Administration itself, in the event that such subrogation involves an increase in the cost of the existing operation.

e those operations of indebtedness not instrumented values derived from the subrogation of the General Administration or one of its entities in other debts having no financial nature or lack of an explicit corresponding Administration endorsement, and whose cost is above the cost of borrowing in the half equivalent term which was the autonomous community or Local Authority on the date on which the original operation was closed.

The establishment of commissions of assumption or subrogation will also be forbidden in these operations.

f. those derived of the transformation of debts of nature not financial of the community autonomous or entity Local, in others of nature financial whose cost is find above the cost of the debt to the term half equivalent to which had the community autonomous or entity Local in the date in that is closed it operation original.

g. those operations of indebtedness not instrumented in values derived of the modification of a contract prior of the own community autonomous or entity Local, or of their entities public, in which the cost resulting of the operation exceeds financially the cost of the operation pre-existing.

In any case, the cost financial maximum will be the established in the paragraph third from this resolution.

h. those operations of indebtedness not instrumented in values that does not provide for the possibility of amortization early to request of the debtor. The operations to type of interest variable not may contain costs of rupture by depreciation early in dates of payment of interests. In the event of early repayment occurs on dates other than the payment of interest, is allowed the inclusion of a cost of rupture, provided that this cost is calculated according to market practice.

Fixed interest rate financing operations, may include costs of breaking in favor of one or either of the parties, regardless of whether the early repayment is performed or not on interest payment dates. In any case, such costs of rupture may only reflect the economic prejudice to the cancellation of the operation due to the change in the conditions of interest rate swaps since the formalization or disbursement of the loan until the time of amortisation of the same (or what is the same, the cancellation of the swaps of floating interest rate implied). The risk premium of operation, equivalent to the risk premium that would correspond to the loan if this variable rate, may not be incorporated by the term that half was from the the redemption date advance until the date of repayment initially foreseen in the contract.

i. those operations to variable interest rate that contain clauses soil over the applicable reference, unless it is compensated him to the autonomous community or Local entity in differential applicable to the operation by the sale of that land at market prices option.

j those operations of indebtedness not instrumented values to variable interest rate that the Euribor reference used does not match the period of liquidation of interests, except that is collected in the contract the market adjustment of the margin between the used reference and appropriate to the period of payment of interests.

Seventh. Exceptional circumstances.

For those financial transactions that do not meet any of the conditions provided for in the present resolution, a report which will detail the financial suitability of the operation, justifying that it does not put at risk the financial solvency of the debtor may be presented. In the case of operations of complex derivatives defined in fifth paragraph 4 of the present resolution, memory will contain an explanation of the operation of the derivative and the purpose to be achieved. Received the memory, the General Directorate of the Treasury and financial policy will be valued, for the particular case, if exceptionally the operation meets the criteria of financial prudence, to which will emit a supporting statement in this regard.

Eighth. Information obligations.

1. the communities autonomous and local authorities have the obligation to communicate the final conditions all the debt and derivatives operations and the global portfolio of debt and derivatives to the Ministry of finance and public administration pursuant to the provision of information obligations under the legislation.

2. the Secretariat General of the treasure and political financial may request to them communities autonomous or entities local that authorize to them entities financial so these provide to this Secretariat General information on the risk that each entity maintains with the community autonomous or entity Local corresponding, as well as them features main of these operations.

Ninth. Clause repealing.

Is repeals the resolution of 5 of February of 2015, of the Secretariat General of the treasure and political financial, by which is defines the principle of prudence financial applicable to them operations of debt and derivatives of them entities local, and of them communities autonomous that is avail to the background of funding to communities autonomous.

Tenth. Entry into force.

This resolution shall enter into force the day after its publication in the «Official Gazette».

Madrid, 31 of July of 2015.-the Secretary General of the Treasury and political financial, Rosa Maria Sanchez-Yebra Alonso.

ANNEX 1


Types of interest fixed and differential of the cost of financing of the State for the purposes of compliance of the paragraph third of the resolution of 31 of July of 2015, of the Secretariat General of the treasure and political financial life half of the operation (months) type fixed maximum differential maximum on euribor 12 months differential maximum on euribor 6 months differential maximum on euribor 3 months differential maximum on euribor 1 month 1-0.08 2 2-0.04 6 4-0.03 0 7






5





-0,02





 





 





1





8






6





-0,01





 





-6





1





8






7





0,01





 





-4





3





10






8





0,02





 





-3





4





11






9





0,03





 





-3





4





11






12





0,03





-14





-3





5





12






16





0,03





-16





-4





4





12






17





0,04





-16





-4





5





13






18





0,05





-15





-3





5





13






19





0,06





-15





-3





6





14






20





0,07





-14





-2





6





15






21





0,08





-13





-1





7





15






22





0,09





-12





0





8





16






23





0,11





-11





1





10





18






24





0,12





-10





2





11





20






36





0,38





8





20





30





40






48





0,63





23





36





46





56






60





0,95





43





55





65





75






72





1,24





58





70





80





90






84





1,49





70





82





92





102






96





1,71





79





91





101





111






108





1,88





86





98





107





117






120





1,98





85





97





106





116






132





2,14





92





104





113





123






144





2,26





97





109





118





128






156





2,37





102





114





123





133






168





2,45





103





115





124





134






180





2,49





102





114





123





133






192





2,55





104





116





125





135






204





2,60





107





118





128





138






216





2,65





109





121





130





140






228





2,70





112





124





133





143






240





2,75





115





127





136





146






252





2,80





118





130





139





149






264





2,84





121





132





142





152






276





2,88





123





135





144





154






288





2,91





126





138





147





157






300





2.95 129 141 150 160 312 2.98 131 143 152 162 324 2.99 133 144 153 164 336 3.00 134 146 155 165 348 3.02 3.03 135 147 156 166 ≥360 136 148 157 167 fixed interest rates and differential applicable maximum for operations whose exact half life is not posted in this table shall be found by linear interpolation between those two types or differential more near to the time half of the operation.

On these types of interest fixed or differential on Euribor, is may apply the differential maximum content in the annex 3 of the present resolution.

ANNEX 2 methodology for the calculation of the cost of State funding in each half term.

For fixed interest rates: a. seeking profitability (Yield to Maturity Mid) treasure references closer to the medium term into a source of financial information, according to the contributors of prices generated by the source of financial information.

b. linearly interpolates the profitability to the average life of the new operation.

For those types of interest variable: to. is seeks the profitability (Yield to Maturity Mid) of them references of treasure more nearby to the term half in a source of information financial, according to them contributors of prices generated by it own source of information financial.

b. estimated equivalent to such returns in terms of differential on Euribor 6 months through I-spread function and not by the Asset swap spread.

c. with the spreads on Euribor 6 months of two references of the Treasury closer to the average life of the new operation, it is linearly interpolated to the half life.

d. in case of wanting to establish the spread on another reference of Euribor that not is the Euribor to 6 months (Euribor to 12 months, 3 months and 1 month), is set by the basis swap to the term half of the operation.

ANNEX 3 maximum spreads on the cost of financing of the State and other financial conditions applicable to the operations of indebtedness of autonomous communities and local entities.

1. for autonomous regions, differential maxima on the cost of financing of the State will be: a. for the autonomous communities attached to the financing fund to autonomous communities: i. operations not implemented in securities whose maturities are covered by the Fund's financing to autonomous communities: 20 basis points.

II. operation not implemented in securities whose maturities are not covered by the Fund's financing to autonomous communities: 30 basis points.

b. for not adhering to the financing fund to autonomous communities autonomous communities: i. operations in the long run not instrumented values: 40 basis points.

II. short term operations not instrumented values: 30 basis points.

2. for local entities, differential maxima on the cost of financing of the State will be: i. operation not implemented in securities whose maturities are covered by the Fund's financing to local authorities: 20 basis points.

II. operation not implemented in securities whose maturities are not covered by the Fund's financing to local authorities:


to. operations agreed by entities local that met the conditions of eligibility to the Fund of impulse economic: 40 points Basic.

b. operations organised by local entities which do not meet the conditions of eligibility to the Fund's economic boost: 75 basis points.

3. for the autonomous communities and local entities, in the case of operations of indebtedness with a half-life exceeding 10 years, maximum differentials set out in points 1 and 2 above, is may increase in a basic point per additional year, up to a maximum of 15 additional basis points.

4. in the case of operations implemented in values, maximum differential shall be fixed on each operation by a report of the General Directorate of the Treasury and financial policy taking into account the market situation and the characteristics of the operation. When is try of emissions of values of them communities autonomous, said report is will incorporate in the report mandatory that, according to the agreement of the Council of political Fiscal and financial of 6 of March of 2003, should issue the Secretariat General of the treasure and political financial for all those operations that require of authorization of indebtedness from the State, according to the article 14 of the law organic 8 / 1980 , of 22 of September, of financing of the communities 5. Average less than or equal will have consideration of short-term operations those with a life to 12 months.

6. to the maximum rates described in points 1, 2 and 3 above, may be accompanied by only the following commissions: a. Commission of non-availability of credit policies, limited to no more than 0,10% annual.

b. Commission of Agency for operations unionized, with a maximum of 50,000 € per year.

7 interest on late payments shall not exceed the operation more interest rate surcharge of 2% a year.