The request for this short-term credit line for a maximum amount of 300 million euros and a term of up to one year, is proposed as a preventive management tool and for the optimization of the treasury of the Autonomous Community of the Canary Islands.
For the Minister of Finance and Relations with the European Union, Matilde Asián, these types of operations are in line with the usual treasury management dynamics of most autonomous communities, which use them to efficiently match cash flows of receipts and payments.
After a period of high liquidity sustained mainly by the absorption and progress in the execution of the funds from the Recovery and Resilience Mechanism (RRM), which avoided recourse to external financing in recent years, the regional treasury now faces a normalization of its ordinary balances and a progressive reduction of said European funds.
In this transition scenario, and given the seasonal increase in payment volume expected for the second half of the year, the availability of these temporary credit lines ensures optimal financial stability, provides the necessary flexibility to resolve very specific liquidity shortfalls, and rigorously guarantees the continuity in meeting payment commitments to suppliers.
The operation does not affect the financial solvency of the autonomous community in any way, nor the confidence that the markets are placing in it in the latest bond issuances carried out. In fact, in the month of June, the autonomous community successfully completed its first sustainable issuance for an amount of 500 million, for which it received bids that quadrupled that offer.
The latest report from Standard & Poor’s maintains the autonomous community's credit rating at ‘A+’ with a stable outlook. The rating agency places the Canary Islands among the regions with the best credit profile within the regional system, based on solid budgetary performance, low debt burden, and an exceptional liquidity position.