Spain | ICO-backed debt refinancing

Flexibility measures and practical aspects
Spain | ICO-backed debt refinancing
View document
February 28, 2022

Since the health crisis began, many companies have received financing guaranteed by the state through guarantee facilities managed by the Spanish State Finance Agency (Instituto Oficial de Crédito or “ICO”). Some companies are likely to experience difficulties in meeting payments for these financial transactions at the end of the grace periods.

In this context, measures approved by the Spanish government enabling the potential renegotiation of these transactions while maintaining the public guarantee take on special significance, including in particular the approval of a Code of Best Practices, which many financial institutions have adhered to voluntarily.

This document outlines these measures and addresses the issues arising in respect of the possibility of refinancing transactions backed by these public guarantees, or restructuring the financial debt of companies carrying out a transaction within the framework of these facilities. In particular, we outline specific issues that should be address to safeguard the public guarantee on refinancing existing debts. We also explain the recovery and collection regime of ICO-backed debt and the relevant aspects to consider in a preinsolvency or insolvency scenario. 

View document
February 28, 2022