Banking and Finance
Debt markets continue to feel the calming — even sedative — effects of the battery of support measures rolled out to counteract the decline in business activity due to the effects of COVID-19. Jumbo deals involving non-performing loans (NPLs) are expected to resume in the last quarter of 2021. Until then, we will witness two very interesting developments until then: single name sales and the appearance of new players in the debt market.
On March 10, 2021, most of the provisions in Regulation (EU) 2019/2088 of the European Parliament and of the Council of 27 November 2019 come into force. The new obligations relate to both the internal organization of the vast majority of financial institutions, as well as the information they must publish on their website and in the pre-contractual information on their products.
Keeping our legal sight on the obstacles or difficulties for cross-border mergers which we started looking at in the previous article in this series, we cannot overlook that the laws of every state retain their own peculiar characteristics, a few of which are deep rooted although little known beyond their borders, which may place boulders in the path that are hard or impossible to move round.
Las fusiones bancarias transfronterizas han vuelto a estar de actualidad en la Unión Europea, animadas por los propios supervisores. En este tercer y último artículo de la serie analizamos el régimen de autorizaciones, el carácter probablemente imparable del proceso y alguna posible sugerencia para avanzar hacia una fusión, aunque por etapas.
There has been much talk about cross-border bank mergers in Europe, but so far none have happened or appear to be imminent. A few years ago Garrigues recommended that banks watch out for them in the future. Now the European supervisors are calling for them to be carried out and even trying to make them easier. But for the time being the bank concentration process is still taking place within each member state. This is currently being seen in Italy, with the acquisition of UBI Banca by Intesa Sanpaolo, and in Spain, with the merger of Caixabank and Bankia. It is not happening across borders. In this series of three articles we will try to identify and reflect on a number of legal factors that may partly explain this situation.
In the wave of the COVID-19 pandemic, there has been a significant increase in debt held by both consumers and companies. Over the coming years, we expect to see a large number of debt and distressed asset deals. In this viewpoint, Garrigues provides in this documentan analysis of the debt market situation and trends in Latin America, Spain and Portugal, where there is a clear move toward greater sophistication in these deals.
Over the past weeks, Spanish companies and credit applicants from all industries, both essential and non-essential, have been implementing strategies in order to try, as far as they can in the circumstances, to ensure liquidity and minimize the impact of COVID-19 on their activity. This includes a number of measures in all areas of the business, which are in turn conditioned by the measures implemented by the Spanish government and other supra-national, national, autonomous community and local authorities. All these measures and every new piece of legislation can be tracked in our special 'Companies facing the coronavirus COVID-19'.
The toughening of lockdown measures in Spain and resulting closure of all business activities not classed as essential makes it absolutely necessary to keep very much in sight this week the measures approved in the labor and employment field. In the domain of corporate law and commercial contracts, the decision governing the first tranche of guarantees to soften the economic effects of the crisis has already been published in the Spanish Official State Gazette (BOE). As for tax matters, the personal income tax and wealth tax season is about to start. In the litigation arena, the general statute of limitations for personal action has been extended. And there are also important mobility and transport, and restructuring and insolvency issues and matters related to administrative law.
The new provisions in Royal Decree 309/2020 deal with the authorization regime, cross-border activity, corporate governance principles and compensation policy and the obligations relating to solvency for specialized credit institutions.
This guarantee facility is to be managed by ICO and will cover new loans and other types of financing provided by financial institutions to companies and the self-employed to soften the economic effects of COVID-19.