The Community of Madrid finances itself at negative rates for the first time

The region issues its first promissory notes in the market, an operation with which it will obtain financial return.

The Community of Madrid reached a new milestone in financing yesterday by going to the market to place its first notes (short-term debt). According to financial sources, the issue resulted in great success that led the region to set a negative interest rate for debt for the first time in its history.

With this operation, the Community of Madrid will charge investors for borrowing 18.6 million euros over a period of nine months. The exact interest of the issue is not public, but the same sources suggest that it is “in line with what the Public Treasury pays”, which offers -0.41% for its nine-month bills.

The region has wanted to take advantage of the strong momentum given to the markets by Thursday’s announcement of the European Central Bank (ECB), which expanded its pandemic emergency purchasing program by 600 billion and has pushed down the interest that issuers pay for your debt.

Yesterday was the first issue made by the Community of Madrid within the framework of its promissory note program, approved in March and which contemplates a outstanding balance of issues of this type of securities worth up to 500 million euros during the next five exercises. To successfully complete its debut in the short-term debt markets, Madrid turned to the services of CaixaBank’s investment banking team.

Remarkable activity

The region has been very active in the debt market this year by issuing 1.25 billion in bonds in February, to then place its first green bond for 700 million and, finally, the first health social bond for 52 million which is now added the landmark in the world of the pagas.

Outside the market, the Community of Madrid has also carried out quite notable operations, such as the 600 million loan signed with the European Investment Bank (EIB) or the 200 million euro loan with the Development Bank of the Council of Europe, both for combat the pandemic.

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