The Xunta de Galicia (Galician regional government) has just formalised its third issue of sustainable debt in the amount of €500 million, with demand from both domestic and international investors exceeding three times the amount of the issue, which shows the confidence of investors in the economy and finances of Galicia. All this despite the tightening of financing conditions and the high volatility in the financial markets.
The Diario Oficial de Galicia will publish the financial conditions of this new 6.5-year bond issue by the Xunta. The issue is foreseen in the annual programme of indebtedness of the Autonomous Community and does not imply an increase in the net amount of indebtedness, since it coincides with the amortisation of other existing credits.
These bonds, included in the Sustainable Financing Framework of the Xunta de Galicia, will be entirely oriented to social and environmental investments, to the green and sustainable economy and also linked to the 2030 Agenda. Specifically, they will be used in projects related to the green use of resources such as renewable energies, energy efficiency, pollution prevention and control, biodiversity conservation, clean transport and the sustainable management of water and natural resources.
In addition, these resources can also be put to social use through projects related to basic and sustainable infrastructures (improvement of rural roads or broadband in rural areas), access to essential services (support for infant, primary and secondary education or the construction of hospitals), sustainable housing (rental aid for vulnerable groups), or employment generation (support for employment in rural areas).
In terms of geographical distribution, the participation of foreign investors stands out with more than 50%, among which Italy stands out with 23%, followed by Portugal with 9% of issuance. By type of investor, the demand registered by banks stands out, followed by fund managers, insurance companies and pension funds.
Linklaters Spain advised with a team formed by partner Pablo Medina, counsel Juan María Lamo and managing associate Héctor Garrido.