Portal de Cartagena
www.portaldecartagena.com
The City of Cartagena will save a total of 740,000 euros in interest payments thanks to the renegotiation with three banking entities of financial credits that were signed in previous legislatures.
One of the mayor objectives of the mayor, Ana Belén Castejón, is the reduction of the financial dependence of the City Council with banking entities.
"In this sense, we are working in two ways: in the early repayments of outstanding capital (such as the 4.5 million Casco Antiguo loans that we recently paid), and, on the other hand, forcing a negotiation with the banking entities to make it cheaper the loans signed by the previous Popular Party Government team, "said the mayor.
The result of this negotiation has been able to achieve a reduction of 0.75 in the interest rate that had been paid so far in these three bank loans, which represents an annual savings of close to 90,000 euros.
In total, the City Council signed three loans with BBVA and Banco Santander for an amount of 38,759,239 euros, of which 21,221,412 euros were outstanding as of December 31, 2017.
The interest rate agreed with BBVA for a credit of 15,884,269 euros, which was signed on July 29, 2009 and will end on July 29, 2024, was Euribor +1.77.
Thanks to the negotiations has been reduced to Euribor +1.02, which means a drop of 0.75 points.
The second loan that was signed with BBVA on October 22, 2010, for a value of 7,595,822 euros and ending on October 22, 2025, had an interest rate of Euribor +2.05, which is cheaper than Euribor +1,30, that is, a drop of 0.75 points.
The last loan that has been renegotiated is the one that was signed with Banco Santander on February 1, 2010 for a value of 15,279,148 euros and that ends on February 1, 2030. The interest rate that was agreed at that time was Euribor +1.50, and now it has changed to Euribor +0.75, with a drop of 0.75.
With this renegotiation, the total savings of interest payments will be 740,000 euros during the rest of the life of the loans, which have an average life of 8 years, with which the annual savings will be around 90,000 euros.
"We will continue working on the marked lines.
The more capital we amortize, the lower the interest payments and the greater the benefits for the City Council and, therefore, for all Cartagena citizens.
Our goal is to gradually reduce the debt to release budgetary resources that can be used to continue improving the lives of all citizens of the municipality, "said the mayor.
When the current legislature began the bank debt of the City Council amounted to 115,554,681 euros.
The work carried out has allowed the total City Council loans as of December 31, 2017, including those in the old town, to be reduced to 68,728,424 euros, which means a debt reduction of more than 40%.
In addition, in 2015, the City Council paid interest of 3,800,000 euros, as of December 31, 2017 this amount has been reduced to 1,674,991 euros.
With the reduction that has been renegotiated, this year the interest payment will be reduced below 1,600,000 euros, representing a reduction of more than 44%.
Source: Ayuntamiento de Cartagena
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