Order ETD/37/2023 of 17 January establishing State Debt for 2023 and January 2024

I. GENERAL PROVISIONS MINISTRY OF ECONOMIC AFFAIRS AND DIGITAL TRANSFORMATION Order ETD/37/2023, of 17 January, establishing the creation of State Debt during the year 2023 and January 2024.

State Debt is the set of capital funds borrowed by the State through public issuance, negotiation of credit operations, subrogation in the debtor position of a third party, or, in general, through any other financial operation of the State, destined to finance State expenses or to constitute active treasury positions.

Law 47/2003, of 26 November, General Budgetary Law, establishes in its article 94 that the creation of State Debt must be authorized by law and in its article 98 that it corresponds to the Head of the Ministry of Economic Affairs and Digital Transformation, according to the current departmental structure, to authorize the formalization of operations related to the Debt.

For its part, article 46 of Law 31/2022, of 23 December, General State Budgets for the year 2023, authorizes the Head of the Ministry of Economic Affairs and Digital Transformation to increase the State Debt, with the limitation that the outstanding balance in effective terms on 31 December 2023 does not exceed the corresponding balance on 1 January 2023 by more than 96,021,975.11 thousand euros. This limit will be effective at the end of the fiscal year, may be exceeded during its course, and will be automatically revised pursuant to the scenarios established in article 46.2.

This Order incorporates the fundamental content of Order ETD/18/2022, of 18 January, establishing the creation of State Debt during the year 2022 and January 2023 and collecting the standardized Collective Action Clauses, having the content of the standardized Collective Action Clauses collected in the annex of said Order reproduced therein, in compliance with article 12.3 of the Treaty Establishing the European Stability Mechanism and under the protection of article 98.3 of Law 47/2003, of 26 November. The standardized Collective Action Clauses collected in Order ETD/18/2022, of 18 January, will apply to new references issued for the first time once their adoption occurs. The novelties introduced by these Collective Action Clauses derive from the experience acquired in other jurisdictions and seek to introduce a single aggregated vote, so that holders of a specific series of securities cannot block the modification of the conditions of the rest of the affected series, prejudicing the rest of the holders.

However, given that the entry into force of the standardized Collective Action Clauses collected in Order ETD/18/2022, of 18 January, has not yet occurred, for reasons unrelated to the action of the Spanish State, the standardized Collective Action Clauses collected in the annex of Order ECC/1/2014, of 2 January, establishing the creation of State Debt during the year 2014 and January 2015 and collecting the standardized Collective Action Clauses, remain in force temporarily. These will apply to those references issued for the first time between 1 January 2013 and the date of adoption of the new standardized Collective Action Clauses, in accordance with the Treaty Establishing the European Stability Mechanism.

On the other hand, it is considered appropriate to add certain entities to the list of entities authorized to submit non-competitive requests for a nominal value up to 500 million euros, reflecting in this regulation what was already established throughout 2022 by resolution of the Secretary General of the Treasury and International Financing for the specific case of each entity.

This ministerial order adapts to the principles of necessity, effectiveness, proportionality, legal certainty, transparency, and efficiency. Pursuant to the principles of necessity and effectiveness, the regulatory initiative is justified by a reason of general interest, namely the need to issue public debt to finance the difference between the State's income and expenses in the year 2023, with the ministerial order being the appropriate instrument to enable the execution of State Debt issuances based on the rest of the current legal framework and, specifically, the General Budgetary Law.

The order also responds to the principle of proportionality and contains the essential regulation to meet the intended ends. The norm does not restrict any right and only imposes obligations on the administration, seeking equilibrium between the flexibility required to operate efficiently in financial markets and the need to provide legal certainty to operators, a principle of good regulation to which this order also contributes, as well as to the principle of transparency, by clearly defining the objectives sought and their basis.

Finally, regarding efficiency, the object of the norm is precisely to articulate the procedures that allow for the efficient management of the issuance of State Debt. In recent years, these have allowed for prudent management aligned with market practices, which must be maintained over time.

In virtue thereof, and with the aim of instrumenting financing through State Debt during the year 2023 and January 2024, I dispose:

Article 1. Amount of Debt Issuance.

1. The Secretary General of the Treasury and International Financing will issue State Debt in the name of the State and by delegation during the year 2023, according to what is established in this Order, for the nominal amount deemed advisable based on the State's financing situation, the subscription requests received, the conditions thereof, and the general conditions of the markets, such that, adding what is issued or contracted in January 2023 pursuant to Order ETD/18/2022, of 18 January, establishing the creation of State Debt during the year 2022 and January 2023 and collecting the Standardized Collective Action Clauses, and what is issued or contracted by the State during the entire current year in all modalities of State Debt, does not exceed the limit of increase for the outstanding balance of the Debt established in article 46 of Law 31/2022, of 23 December, General State Budgets for the year 2023.

2. For the purposes of what is established in article 94.2 of Law 47/2003, of 26 November, General Budgetary Law, the authorization to issue or contract State Debt contained in the previous section will extend to the month of January 2024 up to the limit of 15 percent of that authorized for the year 2023, with the amounts thus issued being counted within the limit that authorizes the General State Budgetary Law for the year 2024 for that year.

Article 2. Formalization of the Debt Issuance.

1. The Secretary General of the Treasury and International Financing will issue State Debt in euros, without prejudice to what is established in article 99 of Law 47/2003, of 26 November, in the following modalities: Treasury Bills, State Bonds, and State Debentures. Likewise, State Bonds or Debentures whose capital or interest is referenced to an index in the manner fixed by their issuance regulation may be issued.

2. State Debt will receive the denomination of Treasury Bills when issued at a discount or premium, and for a term not exceeding twenty-four months. Its redemption value will be at par.

3. State Debt will receive the denomination of State Bonds or State Debentures when its issuance term is between two and five years or is superior to this term, respectively. The redemption value of State Bonds and Debentures will be at par, unless a different value is fixed in the resolution establishing the issuance. In the case of early redemptions by repurchase or exchange, the price may be different from par. The Secretary General of the Treasury and International Financing may group State Bonds and State Debentures under the denomination of Treasury Bonds or another that is advisable to identify Debt of those characteristics, in accordance with national or international market practices.

4. To facilitate the management of amortization operations and the aggregation of issuances of Treasury Bills, Bonds, or State Debentures, the issuance term of these securities may differ from the exact years or months cited in the previous sections by the days necessary, without this necessarily requiring a change in their denomination.

5. For the purposes of what is established in article 98.3 of Law 47/2003, of 26 November, the set of new references of State Debt securities with an original declared maturity superior to one year, which are issued for the first time from the first day of the second month following the entry into force of the Agreement modifying the Treaty Establishing the European Stability Mechanism, will incorporate the specifications of the Collective Action Clauses collected in the annex of Order ETD/18/2022, of 18 January, establishing the creation of State Debt during the year 2022 and January 2023 and collecting the standardized Collective Action Clauses. Likewise, the rights resulting from the segregation of these Debt instruments are subject to that same regime.

Article 3. Representation of the Debt and Admission to Quotation. The State Debt in securities put into circulation pursuant to what is provided in article 2, will be represented exclusively by book entries and, if denominated in euros, will be admitted, ex officio, to trading in the regulated market determined in the regulation by which the issuance is established.

Article 4. Issuance and Amortization Dates.

1. The Debt issued will have the issuance and amortization dates determined by the resolution of the General Directorate of the Treasury and Financial Policy by which the issuance is established.

2. Likewise, the General Directorate of the Treasury and Financial Policy may establish, in the resolution by which the issuance is established, one or more dates on which the State, the holders, or both, may demand the amortization of the Debt before the date fixed for its definitive amortization, in which case the price at which the Debt will be valued for the purposes of its amortization on each of those dates must be fixed, as well as the procedure and, if applicable, conditions for the exercise of said option in the event that it is attributed to the holders.

3. In Debt in securities, the exercise of the right to early amortization by the State will be exercised, unless the issuance has established a special and own procedure more favorable for the holder, as explained below: a) The resolution of the General Directorate of the Treasury and Financial Policy, by which the early repayment of an issuance of State Debt is established, must be published at least two months in advance of the date on which the repayment must take place. b) Within the scope of the corresponding agreement, the Bank of Spain will make public the identifying data of the Debt whose early repayment has been established.

4. When the option of early amortization of the Debt in securities, in accordance with the creation or contraction rules, is exercised by the holders, they must present the corresponding request at least one month in advance of the repayment date.

5. Pursuant to what is established in article 102.5 of Law 47/2003, of 26 November, the procedures established in paragraphs 3 and 4 will apply to the exercise of the option of early amortization of Debts assumed by the State in securities, even if what is assumed is only the financial burden, unless the mode of exercise of the option collected in the original regulation of the issuance is more favorable for the holder.

Article 5. Issuance Procedure.

1. The issuance of State Debt will be carried out by the Secretary General of the Treasury and International Financing through one of the following procedures or a combination of these: a) Through auction, which will be developed in accordance with rules made public prior to its celebration, among the general public, among authorized underwriters, or among a restricted group of these who acquire special commitments regarding the placement of the Debt or the functioning of their markets. b) Through simple sale operations, which will consist of direct placements of State Debt to one or several counterparties, or sale operations with a repurchase agreement. These operations may be carried out for new issuances, extensions of existing issuances, or for securities that the Public Treasury has in its securities account. The procedure in these operations will, as a general rule, be the following: 1.º Entities that hold the status of Public Debt Market Maker of the Kingdom of Spain may act as counterparties of the Secretary General of the Treasury and International Financing in these operations. These entities may subsequently maintain the acquired State Debt in their own portfolios or transfer it, unless restrictions on their commercialization are expressly indicated. 2.º The Secretary General of the Treasury and International Financing will communicate to the Market Makers the requirements and conditions necessary for the operations presented. These may include, among others, requirements related to the minimum volume of these financing operations, the maximum issuance cost, or the structure of the operation. 3.º Market Makers may present to the Secretary General of the Treasury and International Financing, for subsequent valuation, the proposals they deem appropriate. These proposals may only refer to State Debt issuances in circulation if a communication from this General Secretariat expressly mentions the possibility of carrying out these operations with those issuances. 4.º The proposals presented by Market Makers will be valued by the Secretary General of the Treasury and International Financing, taking into account the proposed financial structure, the complementarity of the operation with the regular financing program, the diversification of the investor base, or potential savings in costs compared to similar-term issuances, among other criteria. 5.º The Secretary General of the Treasury and International Financing will prepare a report reflecting the advantages for the Public Treasury of those operations that have been accepted. 6.º Notwithstanding the above, exceptionally, other entities distinct from Market Makers may act as counterparties in these operations, which hold the status of participant or have an individual account in the Spanish central securities depository, when thus provided for in the Order of the Head of the Ministry of Economic Affairs and Digital Transformation by which the issuance is authorized. The characteristics of the operations will be agreed bilaterally between the Secretary General of the Treasury and International Financing and the participating entity. c) Through the syndication procedure, which will consist of the cession of part or all of an issuance at an agreed price to several financial entities. The procedure in these operations will, as a general rule, be the following: 1.º New issuances or extensions of existing issuances may be issued through the syndication procedure. 2.º The Secretary General of the Treasury and International Financing will select the participating financial entities based on financial criteria, commercial capacity, or promotion of Debt markets, granting them a mandate to lead the issuance. 3.º The issuance price, as well as other characteristics of the issuance, including the coupon or maturity date, will be determined by the Secretary General of the Treasury and International Financing, prior to consultation with the selected entities. 4.º The Secretary General of the Treasury and International Financing will inform the entities to whom a mandate has been granted of their duty to respect confidentiality in all phases of the issuance process. Information whose publication has not been expressly consented by the Secretary General of the Treasury and International Financing may not be disclosed to persons outside the transaction. 5.º The selected financial entities will seek investors to cover the issuance, and will also have the possibility of submitting requests for their own portfolio. In the event that demand exceeds the planned volume of issuance, the selected financial entities will formulate a proposal for the distribution of the issuance to the Secretary General of the Treasury and International Financing. The Secretary General of the Treasury and International Financing will evaluate the adequacy of the distribution proposed by the selected financial entities and may make modifications to improve the distribution of the issuance, achieve greater diversification of investors, or improve the behavior of the issuance in the secondary market after the issuance. d) Through any other technique deemed appropriate, depending on the type of operation in question.

2. In order to carry out the issuance, the Secretary General of the Treasury and International Financing may formalize with the selected or awarded entity or entities the relevant agreements and contracts, in which administration, subscription, and placement commissions may be agreed. In these agreements and contracts, the procedures for the award will be determined insofar as those described between articles 9 and 15, both inclusive, do not apply, as well as the form and extent to which what is provided in article 7 applies to the placement of these issuances, and whatever is necessary to complete the issuance. The functions of the selected entities will end, with pro-rata included if applicable, with the deposit of the amount of the issuance into the Treasury's account at the Bank of Spain on the fixed date.

Article 6. Interest Rate and Coupon Payment.

1. Treasury Bills will be issued at a discount or premium, their issuance price being determined either by auction or by the Secretary General of the Treasury and International Financing.

2. State Bonds and State Debentures will be issued with the nominal interest rate determined by the Secretary General of the Treasury and International Financing. The order or resolution by which the issuance is established may also provide that the interest rate is referenced to an index.

The Secretary General of the Treasury and International Financing will establish the payment dates for each of the interest coupons. In particular, the accrual period of the first payable coupon may be increased or reduced by the necessary days so that the remaining coupon periods are complete and the maturity of the last one coincides with the final amortization date.

The Secretary General of the Treasury and International Financing may also provide that these securities adopt the form of zero coupon or single coupon or incorporate any special characteristics occasionally used in these markets. The denomination of the securities may be modified to account for such forms or special characteristics.

The Secretary General of the Treasury and International Financing may also establish the update method, both for interest and capital, in the case of issuances referenced to an index.

Article 7. Public Subscription Procedure for State Debt.

1. Any natural or legal person may submit subscription requests for the State Debt whose issuance is established, with the exceptions that, if applicable, are contemplated in the resolutions of the General Directorate of the Treasury and Financial Policy by which the auctions are convened, or the specific regulatory norm governing the activity of figures with a qualified participation in the subscription and trading of Public Debt, such as Public Debt Market Makers of the Kingdom of Spain, and without prejudice to what is established in article 5.

2. Investment requests will be considered firm commitments to acquire the requested Debt, in accordance with the conditions of the issuance, and their non-full disbursement on the dates established for that purpose in the issuance regulation will give rise to the demand for corresponding responsibility, or, if applicable, to the loss of the amounts required as guarantee, in the manner provided in article 15.5.

Requests will be submitted by participating in the auctions regulated in this Order or acquiring the securities in the periods and under the conditions determined by the Secretary General of the Treasury and International Financing, in accordance with what is provided in article 5, observing in all cases the rules established for that purpose.

3. Within the scope of the corresponding agreement, the Bank of Spain will act as Agent of the Public Treasury in the subscription of State Debt, without prejudice to what is provided in article 5.

Article 8. Auction Calendar.

1. The General Directorate of the Treasury and Financial Policy will prepare an annual auction calendar that will be published in the "Official State Bulletin" before 1 February of the current year.

Auctions held with the periodicity established in the annual calendar will have the status of ordinary auctions.

2. Without prejudice to what is established in the previous section, in view of market conditions, the development of issuances during the year, or the convenience of putting into circulation new modalities or instruments of State Debt at different terms within the existing modalities, the General Directorate of the Treasury and Financial Policy may convene special auctions not included in the annual calendar or cancel any of the ordinary auctions scheduled.

BOLETÍN OFICIAL DEL ESTADO No. 16 Thursday 19 January 2023 Sec. I. Page 6968 cve: BOE-A-2023-1401 Verifiable at https://www.boe.es