Order ETD/27/2021 of 15 January establishing State Debt creation for 2021 and January 2022

OFFICIAL STATE BULLETIN No. 19 Friday, January 22, 2021 Sec. I. Page 6079 I. GENERAL PROVISIONS MINISTRY OF ECONOMIC AFFAIRS AND DIGITAL TRANSFORMATION 900 Order ETD/27/2021, of January 15, establishing the creation of State Debt during the year 2021 and January 2022.

State Debt is the set of capital funds borrowed by the State through public issuance, agreement 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 November 26, 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 person holding the position of 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 11/2020, of December 30, General State Budgets for the year 2021, authorizes the person holding the position of 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 December 31, 2021, does not exceed the corresponding balance on January 1, 2021, by more than 132,047,108.55 thousand euros. This limit will be effective at the end of the fiscal year, may be exceeded during the course of the year, and will be automatically reviewed pursuant to the circumstances established in article 46.2.

This Order incorporates the fundamental content of Order ETD/9/2020, of January 16, establishing the creation of State Debt during the year 2020 and January 2021 and, like this one, maintains in force the content of the standardized Collective Action Clauses, included in the annex of Order ECC/1/2014, of January 2, establishing the creation of State Debt during the year 2014 and January 2015 and collecting the standardized Collective Action Clauses.

On the other hand, article 12.1 of the Order is modified, with the object of differentiating the content of the documents that must be drawn up throughout the auction procedure, such that the minutes will record the development of the auction and the resolution of the Head of the General Directorate of Treasury and Financial Policy will record the result thereof.

Finally, this ministerial order adapts to the principles of good regulation established in article 129 of Law 39/2015, of October 1, of the Common Administrative Procedure of Public Administrations.

In virtue thereof, and with the aim of instrumenting financing through State Debt during the year 2021 and January 2022, I order:

Article 1. Amount of Debt issuance.

1. The General Secretariat of Treasury and International Financing will issue, during the year 2021, on behalf of the State and by delegation, State Debt in accordance with what is provided 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 market conditions, such that, adding what is issued or contracted in January of the year 2021, pursuant to what is established in Order ETD/9/2020, of January 16, establishing the creation of State Debt during the year 2020 and January 2021, 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 11/2020, of December 30, General State Budgets for the year 2021.
2. For the purposes of what is provided in article 94.2 of Law 47/2003, of November 26, General Budgetary Law, the authorization to issue or contract State Debt contained in the previous paragraph will extend to the month of January 2022 up to the limit of 15 percent of that authorized for the year 2021, with the amounts thus issued being counted within the limit that authorizes the General State Budgets Law for the year 2022 for said year.

Article 2. Formalization of the Debt issuance.

1. The General Secretariat of Treasury and International Financing will issue State Debt in euros, without prejudice to what is established in article 99 of Law 47/2003, of November 26, of the following modalities: Treasury Bills, State Bonds, and State Debentures. Likewise, State Bonds or Debentures whose capital or interests are referenced to an index may be issued in the manner fixed by their issuance regulation.
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 greater than 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 through repurchase or swap, the price may be different from par. The General Secretariat of 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 redemption 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 paragraphs by the days necessary, without this necessarily requiring a change in their denomination.
5. For the purposes of what is provided in article 98.3 of Law 47/2003, of November 26, the set of new references of State Debt securities with an original maturity declared greater than one year incorporates the specifications of the Collective Action Clauses collected in the annex of Order ECC/1/2014, of January 2, establishing the creation of State Debt during 2014 and January 2015 and collecting the Collective Action Clauses. Likewise, the rights resulting from the segregation of Debt modalities that incorporate Collective Action Clauses are subject to that same regime.

Article 3. Representation of the Debt and admission to trading. The State Debt in securities put into circulation pursuant to what is provided in article 2, will be represented exclusively through 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.

cve: BOE-A-2021-900 Verifiable at https://www.boe.es

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Article 4. Issuance and redemption dates.

1. The Debt issued will have the issuance and redemption dates determined by the resolution of the General Directorate of Treasury and Financial Policy by which the issuance is established.
2. Likewise, the General Directorate of 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 redemption of the Debt before the date fixed for its definitive redemption, in which case the price at which the Debt will be valued for the purposes of its redemption on each of those dates, 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, must be fixed.
3. In Debt in securities, the exercise of the right to early redemption by the State will be exercised, unless the issuance has established a special and own procedure more favorable for the holder, as follows: a) The resolution of the General Directorate of 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 redemption 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 November 26, the procedures established in paragraphs 3 and 4 will apply to the exercise of the option of early redemption of the Debts assumed by the State in securities, even when what is assumed is only the financial burden, unless the manner 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 General Secretariat of Treasury and International Financing through one of the following procedures or a combination thereof: a) Through auction, which will be developed in accordance with rules made public prior to the holding thereof, among the general public, among authorized underwriters, or among a restricted group of these that assume 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 repurchase agreements. These operations may be carried out for new issuances, expansions of existing issuances, or for securities that the Public Treasury has in its securities account. The procedure to be followed in these operations will generally be as follows: 1.º Entities that hold the status of Public Debt Market Maker of the Kingdom of Spain may act as counterparties of the General Secretariat of 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 General Secretariat of 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 relating 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 General Secretariat of Treasury and International Financing, for subsequent valuation, the proposals they deem appropriate. These proposals may only refer to issuances of State Debt 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 General Secretariat of 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 issuances at similar terms, among other criteria. 5.º The General Secretariat of 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 foregoing, exceptionally, other entities different 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 person holding the position of 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 General Secretariat of Treasury and International Financing and the Participating Entity. c) Through the syndication procedure, which will consist of the transfer of part or all of an issuance at an agreed price to several financial entities. The procedure to be followed in these operations will generally be as follows: 1.º New issuances or expansions of existing issuances may be issued through the syndication procedure. 2.º The General Secretariat of Treasury and International Financing will select the participating financial entities based on financial criteria, commercial capacity, or the 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 the maturity date, will be determined by the General Secretariat of Treasury and International Financing after consultation with the selected entities. 4.º The General Secretariat of Treasury and International Financing will inform the entities to whom a mandate has been granted about their duty to respect confidentiality in all phases of the issuance process. Information whose publication has not been expressly consented by the General Secretariat of 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 presenting requests for their own portfolios. 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 General Secretariat of Treasury and International Financing. The General Secretariat of 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 involved.

cve: BOE-A-2021-900 Verifiable at https://www.boe.es

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2. In order to carry out the issuance, the General Secretariat of Treasury and International Financing may formalize with the selected or awarded entity or entities the pertinent agreements and contracts, in which administration, subscription, and placement commissions may be agreed. In them, the procedures for the award will be determined insofar as the ones 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 bring the issuance to completion. The functions of the selected entities will end, pro rata if applicable, with the deposit of the amount of the issuance into the Treasury 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 through auction or by the General Secretariat of Treasury and International Financing.
2. State Bonds and Debentures will be issued with the nominal interest rate determined by the General Secretariat of 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 General Secretariat of Treasury and International Financing will establish the payment dates for each of the interest coupons. In particular, the accrual period of the first post-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 redemption date. The General Secretariat of 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 General Secretariat of Treasury and International Financing may also establish the method of updating both interests 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, the resolutions of the General Directorate of Treasury and Financial Policy calling the auctions contemplate, 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 such effect in the issuance regulation will give rise to the requirement of the 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 during the periods and under the conditions determined by the General Secretariat of Treasury and International Financing, in accordance with what is provided in article 5, observing, in any case, the rules established for that effect.
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.

cve: BOE-A-2021-900 Verifiable at https://www.boe.es

OFFICIAL STATE BULLETIN No. 19 Friday, January 22, 2021 Sec. I. Page 6084

Article 8. Auction calendar.

1. The General Directorate of Treasury and Financial Policy will draw up an annual auction calendar which will be published in the "Official State Bulletin" before February 1 of the current year. Auctions held with the periodicity established in the annual calendar will be considered ordinary auctions.
2. Without prejudice to what is established in the previous paragraph, 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 Treasury and Financial Policy may call special auctions not included in the annual calendar or cancel any of the ordinary auctions scheduled.

Article 9. Auction procedure and minimum content of the call.

1. Unless the General Directorate of Treasury and Financial Policy establishes a special procedure in the call for the auction, the procedure that will usually be followed is the one provided in this article and the following ones up to article 15 inclusive.
2. Auctions will be called by resolution of the General Directorate of Treasury and Financial Policy, which will be published in the "Official State Bulletin".
3. The resolutions of the General Directorate of Treasury and Financial Policy calling auctions will determine, at minimum: a) The issuance and redemption dates of the State Debt to be issued. b) The deadline date and time for submitting requests at the offices of the Bank of Spain. c) The date of resolution of the auctions. d) The deadline date and time for payment of the State Debt awarded in the auctions. e) The nominal amount of the Debt offered in auction, when it is desired to communicate such information to the market, the quantity offered for one or several auctions of the same or different instruments may be established. f) The minimum nominal value of the offers, when the Head of the General Directorate of Treasury and Financial Policy makes use of the powers conferred upon him in article 10.4. g) The possibility or impossibility of submitting non-competitive requests. h) If applicable, the special nature of the auction. The inclusion of what is established in letters b) and d) will not be necessary in the Resolutions calling Bond and Debenture auctions if their content was included in the resolution by which the annual calendar referred to in article 8 was published.
4. When the auctions called are for State Bonds or State Debentures, the resolutions will additionally determine: a) The annual nominal interest rate and coupon payment dates. b) The existence, if applicable, of early redemption options and the conditions for their exercise. c) The amount of accrued coupon, if any, at the disbursement and circulation date of the securities, expressed as a percentage and rounded to two decimal places. d) In the case of Bonds or Debentures referenced to an index, the index and the applicable updating method will be indicated. If the issuance is referenced to a price index, the annual real interest rate will be published in place of the nominal interest rate. In this same case, the applicable value of the multiplier index or the indexation coefficient on the issuance date will also be made public, for the purposes of valuing the coupons, the accrued coupon if any, and the principal in nominal terms.

cve: BOE-A-2021-900 Verifiable at https://www.boe.es

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5. In the case of Treasury Bills, it must be specified whether competitive offers are formulated in t