Investor Presentaiton
Normative protection of Debt payment
The Comunidad de Madrid's debt is included in the scope of
State debt
Article 135 of the Constitution states ...
". Loans to meet payment on the interest and capital of the State's Public Debt shall always be deemed to be
included in budget expenditure and may not be subject to amendment or modification as long as they conform
to the terms of issue.".
In terms of Organic Law
Article 14.5 of the Law on Financing of the Autonomous Communities states:
"The public debt of the autonomous communities and the securities of an equivalent nature issued by
them shall be subject, to the same rules and shall enjoy the same benefits and conditions as the Public
Debt of the State".
Article 14 of the Organic Law 2/2012 of 27 April on Budgetary Stability and Financial Sustainability provides:
"The payment of interest and principal on the debt of public administrations shall have absolute priority over any
other expenses"
In practice, the Spanish Government has provided financial support to regions that have experienced budgetary
difficulties or access to the financial market
Since 2012 the Treasury has implemented mechanisms such as the FLA (Autonomous Liquidity Fund) and FFPP
(Payment Provider Fund) to provide liquidity to the regional governments and local authorities to enable them to cope
with their payment obligations (Royal Decree-Law 17/2014). Ultimately, the Government of Spain is the ultimate
guarantor of debt amortization.
34View entire presentation