Por Redaccion 
The Andalusian Government has once again issued debt in the markets, this time for an amount of 1,000 million euros over ten years, in what is the seventh sustainable issuance since 2021. The access to the markets and the interest generated among entities from 12 different nationalities is mainly due to «the credibility and trust that Andalusia offers to investors», as explained by the Minister of Economy, Finance, and European Funds, Carolina España.
The Ministry launched on Tuesday the seventh sustainable issuance carried out under its Sustainable Finance Framework, approved in March 2021, and which has so far enabled the issuance of sustainable bonds for a total amount of 4,850 million euros.
The issuance, closed on March 4 for a term of 10 years and to be disbursed on the 14th, has reached an amount of 1,000 million euros and will pay a nominal interest rate of 3.30%. Its launch to the market has been entrusted to the entities BBVA, CaixaBank, Crédit Agricole CIB, Deutsche Bank, HSBC, and Santander.
The bonds have been issued at an interest rate of 19 basis points above the Treasury, the narrowest spread achieved in a public issuance by the Andalusian Government since 2021, and well below the maximum allowed by financial prudence regulations (which is set at 50 basis points).
In this issuance, subscription offers totaling 4,100 million euros were received from over 120 institutional investors. This is the highest amount offered and the highest number of investors participating in a public issuance by the Andalusian Government. Investors come from a dozen different nationalities, including, in addition to Spaniards, those from the United Kingdom, Germany, Italy, Portugal, Austria, Switzerland, France, Luxembourg, Norway, Belgium, and the Middle East. A significant portion of the offers also come from high-quality institutional investors.
The Minister of Economy, Finance, and European Funds, Carolina España, highlighted the interest generated among financial entities in this new public debt issuance by the Andalusian Government, «a result of the financial solvency of the Andalusian community». «All the press highlights the credit improvement experienced by the community and recognized by the different risk rating agencies». Thus, the Minister recalled that Standard & Poor’s raised the community’s rating to single A in 2023 and maintained it in 2024, «the highest rating since 2012». Additionally, in 2024, Moody’s upgraded the outlook from stable to positive on the Andalusian Government’s rating (Baa2).
The markets trust in Andalusia
«Andalusia has been accessing the markets for years, and each issuance is a success, demonstrating that the debt forgiveness proposed by the Government is not a priority,» Carolina España pointed out. «What Andalusia needs is a new financing system that is sufficient, fair, and equitable,» she concluded.
In fact, Andalusia’s debt is below average both in terms of debt per capita (4,618 euros, compared to the average of 6,878 euros for all autonomous communities or 11,085 euros for Catalonia) and as a percentage of GDP (19% compared to 21.3% for all communities, 29.9% for Catalonia, or 40.4% for Valencia), according to data from the Bank of Spain, as of the third quarter of 2024, the latest published.
The 10-year maturity of the issuance will also allow for an extension of the average life of the Andalusian Government’s debt portfolio, which had been significantly reduced following its accession in 2012 to state financing mechanisms, a trend that the community has managed to reverse since starting the gradual return to financing through financial markets in 2018. «Andalusia has consolidated the strategy of returning to the markets (that is, being able to finance part of its debt without State aid) and this is possible because the markets have confidence in participating in the debt issuances of Andalusia, a responsible and respected community in the markets.»
In fact, Andalusia led the return to the markets of the communities that were financed during the crisis through the Fund for Financing Autonomous Communities, made possible by the demonstrated compliance with fiscal rules and the rigorous management of its public finances. «This commitment remains absolutely valid,» explained the Minister, who noted that the Budget for the Andalusian Government for 2025 has been prepared with a forecast of budgetary balance: «We will close 2025 without increasing debt.»