Portal de Totana

www.portaldetotana.com

• Home
• Business
• Hotels
• Restaurants
• News
• Advertisement

The Plenary approved last night the adhesion to the support measures recently approved by the Ministry of Finance to group in a single loan all the credits formalized under the Fund of Financing to Local Entities with a lack of 10 years.

The agreement was established, unanimously, with the exception of point number four referring to the confirmation of the commitment of the necessary measures to comply with the Adjustment Plan, and if applicable, approve those that may be required by the Ministry, in the event that there is a breach or risk of this, which was approved with the favorable votes of Win Totana-IU and the abstention of the rest of municipal political groups.

The approved measures include, in particular, the grouping into a single credit of all the loans formalized from the compartments of the Fund of Financing to Local Entities, thus improving the financial conditions in the periods of repayment and lack.

By virtue of these measures approved by the Delegate Commission of the Government for Economic Affairs of the Ministry of Finance, the local entities see the conditions of the loans softened and lengthened, the interest rates being cut to the local beneficiary corporations.

In this way, the current advances set by the Ministry will be unified, as of December 31, 2018, redoing a single loan that will be refinanced to ten years, with a fixed interest of 0.87%, and a lack of payment up to on December 31, 2022.

The Mayor's proposal included requesting adherence to measure 4 established by the aforementioned Delegate Committee of the Government for Economic Affairs in such a way that a 10-year grace period will be applied to the financial operation that results from the grouping of the measure nº 3.

The green light was also given to formalize the extension of the 10-year amortization period in the financial operation resulting from the grouping calculated by the ICO on measure No. 3, applying the conditions established by the aforementioned ministerial agreement.

The measures are aimed at municipalities in a critical financial situation, such as Totana.

The agreement contemplates five measures of which the Totanero Consistory affects two, the 3rd and the 4th: the third, mandatory and the fourth, optional prior approval of the 3rd.

At present, as explained by the mayor, as of September 30, 2019, the official debt of the City Council (without contingencies or forecasts of sentences) amounts to 99,182,350 euros;

Of which, 28,500,000 euros is financial debt with private banks and approximately 70,500,000 euros with public banks or corresponding to the Management Funds.

The third measure was mandatory and consists of the unification and refinancing of all loans in force until December 31, 2012, which amount to 65,500,000 euros with varied interests, but with the most interest being 1,311%.

This amount represents 66% of the total official debt of the City Council.

The proposed operation would unify 65,500,000 euros in a single 10-year operation, with a fixed interest of 0.874% and two years of lack in which only interest would be paid.

As for the fourth measure, which was optional or voluntary - it would not make sense without the third, as it would be complementary - it consists in extending the operation for another 10 years, which means going from 10 years to 20, reducing capital amortization - when end the lack of 8,231,000 euros per year to 3,658,000 euros.

In this way, the City Council will pay 4,573,000 euros less per year for debt repayment, being an important relief for municipal budgets until 2039.

To do this, the Ministry requires the updating of the debt by not modifying the Adjustment Plan that is currently approved and compliance to accompany sanitation.

financial;

measures that are compatible with the possibility of availing of Payment Plans to Suppliers, although they are not contemplated by the positive evolution in the payment terms that would improve and much with the reduction of annual amortization expense (4,573,000 euros).

The mayor, Juan José Cánovas, explained that it is a very interesting operation that gives us oxygen to plan the reduction of debt and the possibility of stabilizing finances facing the necessary programs and investments that we cannot now in any way.

Source: Ayuntamiento de Totana