Del Olmo highlights the solvency of CyL, with a debt less than its weight in the national GDP

The Minister of Finance, Pilar del Olmo, highlighted Friday the “solvency” of the autonomous community of Castilla y León that has managed to reduce its debt by 48 million euros in the second quarter of 2013, a period in which it has amortized more debt of the issued.

After admitting that it is a “conjunctural” data and clarifying that the final figure will be that corresponding to December 31, 2013, Del Olmo has insisted that the debt data made public this Friday by the Bank of Spain puts Castilla and Leon among the autonomies with a level of income “relatively low” as it has climbed a position in the regional ranking to be ranked as the sixth healthiest region, the fifth by number of inhabitants.

Pilar del Olmo has emphasized that the debt of Castilla y León -8,022 million euros represent 4.15 percent of the total debt of the country when its weight in GDP is higher and around 5 percent. This amount is also equivalent to 14.7 percent of the regional gross domestic product (GDP) “and, therefore, is much lower than the national average of 18.9 percent.”

Having said this, he has admitted that the debt of 277.8 million euros that Castilla y León will be able to face due to the relaxation of the deficit target for 2013 will “obviously” increase the Community’s debt figures, although it has recalled that not all regions will be able to resort to this extraordinary debt.

The minister also recognized that the debt of Castilla y León grew “slightly above the average” compared to the same quarter of 2012 with 1,076 million euros more than the nearly 25,000 million nationally, 4.3 percent of the total increase in Spain.

Pilar del Olmo has clarified in any case that this greater increase is due to the fact that the volume of the debt of Castilla y León is lower than that of other autonomies and has insisted that, in any case, it has been lower than the weight it represents in the GDP.

Payment to suppliers

Of the 8,022 million regional debt, 1,051.4 correspond to the payment plan to suppliers that the Board accepted last year and that is already paid. “Unlike others, in the case of the Community FLA loans are not included, since Castilla y León decided not to join because of its ability to obtain resources from ordinary suppliers,” the councilor clarified.

On the other hand, in the second quarter, the Bank of Spain takes into account as indebtedness the operations of ‘factoring’ without recourse, “or what is the same, the assignment of certain commercial loans to the Public Administrations to financial institutions ”

According to the Ministry, the result is that of the 8,022 million euros of Castilla y León debt, 311 are assigned to the Community for public-private collaboration projects, while 208 million are commercial loans granted. This implies that strictly speaking, the region’s global financial debt amounted to 7,503 million at the end of June.

Of this amount, 374 million euros were loans to finance loans to companies, for which the Board receives both the reimbursement of the capital and the corresponding interest- had me going Littlefockersintl.

The low weight of the autonomous public sector

The Bank of Spain has also offered information on those public companies that do not count for SEC purposes, for carrying out market activities. According to the data of the Ministry, in Castile and Leon its indebtedness was of 463 million euros at the end of the month of March, amount that is equivalent to 4.35 percent of the national total and like in the first quarter it represents the 0, 8 percent of the Gross Domestic Product (the average is 1 percent).

“It is related to the small size of the autonomous public sector, which continues to be reduced as a result of the Restructuring Plan that the Board has set in motion,” said the Ministry of Finance.

The sum of the living debt of the part of the Administration of Castilla y León that counts the European System of Accounts (8.022 million euros) and the one that does not (463 million) gives a global indebtedness of the regional public sector of 8.485 million in the first quarter, 43 million less than the previous one.

The Community, therefore, contributed 4.16 percent of the 203,936 registered in the whole of Spain. In relation to GDP, the relative position of the community with respect to the rest is also favorable, since it is equivalent to 15.5 percent of the Gross Domestic Product, against the average of 19.9 percent.

As specified by the Ministry of Finance, the debt portfolio of the Region is arranged in euro currency in its entirety, so there are no risks associated with fluctuations in the exchange rate.

In addition, its structure has been adapted to the demands of the market. As of June 30, 71 percent of credit operations were instrumented through loans, compared to 29 percent that was debt issues. On the other hand, the greatest weight corresponds to long-term financing (99 percent), “which limits the risks of refinancing”.

The Treasury has acknowledged that the “bias of geographical distribution” towards the national lenders persists, “although a change of perception by the foreign investors of the regional risk has been detected”. The European Investment Bank (EIB) continues to stand out among the latter, and the Development Bank of the Council of Europe was incorporated in December 2012.

To strengthen transparency and in order for potential investors to have relevant information, the Ministry of Finance has centralized in a web the main economic, budgetary and financial data of Castilla y León. These contents are updated periodically and are available on the Board’s website ( in Spanish and English.