The Minister of Public Administration and Finance, Concepción Arruga, accompanied by the general director of the Office of Budgetary Control, Francisco Rojas, analyzed this morning the financing strategy for 2014 of the Autonomous Community and has advanced that the Riojan Executive has saved close to 17 million euros thanks to the restructuring operations of the debt portfolio carried out between the end of 2013 and 2014, “which has allowed us to reduce interest rates on loans and lengthen the amortization period”.
Arruga explained that “the Government of La Rioja is carrying out an active management of the debt portfolio of the Community, mainly with those operations that were subscribed in 2012 and 2013, to reduce interest rates and lengthen the amortization periods. after the conditions that are currently in the markets are more beneficial. ”
Thus, so far in 2014, the Executive has closed six refinancing operations of long-term loans that “have allowed us to obtain financing at cheaper rates and longer terms.” These operations have resulted in annual savings of almost 1.7 million euros and 5.9 million euros throughout the life of the operations.
These operations are in addition to the one carried out at the end of the year, which meant the cancellation of the loan of 70.8 million that the Executive signed in 2011 in the framework of the Supplier Payment Plan. For this, the Government of La Rioja contracted three new operations with which an annual savings in interest of more than 1.7 million and almost 9.9 million euros was achieved if we take into account the entire repayment term of the loans . In addition, last year the Government of La Rioja carried out two refinancing operations in the short term that resulted in savings of 765,486.11 euros.
In this way, thanks to this active management, 90.01 percent of the debt of the Autonomous Community of La Rioja is covered with long-term debt (of which, 20.33 percent are public debt issues ) , compared to 53 percent in 2011, and 9.99 percent in short-term loans.
Arruga has endorsed this good management of the Executive in this matter, supported in the improvement of the financial markets, the reduction of the risk premium, and the structural reforms carried out by the State, since it has allowed that in 2013, of the 47 million euros budgeted by the Government of La Rioja in Chapter III referring to interest, only 32.8 million have been executed.
For the Minister of Finance, these data show that the Government of La Rioja is being a guarantee of good management, having been able to adapt to the economic context and the market situation. And all this, he added, “also fulfilling the objectives of the beginning of the legislature that were conditioned to a reduction of the public deficit with a reasonable level of indebtedness while maintaining the quality of public services and the tax advantages for the Rioja people”.
Thus, Arruga recalled, the Fitch agency improved the outlook for the debt of the Autonomous Community of La Rioja with a rating of triple BBB stable in long-term emissions and F2 in short emissions, which means that markets and institutions value the solvency trust and credibility of the region.
DEBT AUTHORIZATION 2014
On the other hand, last February the Council of Ministers authorized La Rioja to issue public debt for a maximum amount of 130 million euros with a term of up to 10 years and with a cost that can not exceed 75 basis points of differential with respect to the debt of the State of similar characteristics.
This authorization, which can only cover transactions formalized until December 31, 2014, is set to finance amortizations foreseen in 2014 and the annuity corresponding to 2014 of the return of the negative settlement of the system of financing of the Autonomous Communities of the regime common and Cities with Statute of Autonomy of the 2008 and 2009 financial years.
In this regard, the Minister of Finance has reported that tomorrow the Governing Council plans to approve a new issuance of public debt amounting to 130 million euros. After this authorization from the Governing Council, the Office of Budgetary Control will prepare the corresponding order that regulates the characteristics of the public debt issues of the CAR for the financial year 2014.
Arruga recalled that according to the latest data published by the Bando de España and relating to the fourth quarter of 2013, the ratio of debt to GDP in La Rioja stood at 14.7 percent, a percentage lower than that recorded by the whole of the Autonomous Communities that represents 20.2 percent of its GDP. These figures place the Autonomous Community as the fifth Community with the lowest interannual increase and as the fifth with the lowest debt over GDP. For 2014, the public debt target for La Rioja is 15.5 percent of GDP.