Spain’s Toll Rescue Plan Stings Concessionaires

The Spanish government’s rescue plan to save nine toll roads with combined debt and equity of Euro 4.5 billion (US$5.8 billion) is contingent on the highway companies taking a total loss on their equity and the banks taking a 50% writedown of their defaulted loans. For its part, the government would take on some Euro $1.2 million (US$1.6 million) of debt owed to owners of land on which the highways were built.
The new rescue plan, filed at Madrid Mercantile Court 6 in mid-October, was admitted by the judge as the basis for a ruling since no other plan challenging the government was filed by the toll road companies. After a two-year wrangle, Spanish authorities seem to have worn down the resistance of the highways’ equity owners and the Spanish banks, who wanted a deal that would have repaid them fully over time. But under such a plan Spain would have had to book all the debt on its own balance sheet, which would have ballooned its deficit and run it afoul of EU deficit targets.


About Bill Reinhardt

Editor of Public Works Financing newsletter
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