Regional Government takes out 240 million euros in loans to repay debt in 2027

The Regional Government Council approved, at a plenary meeting on 14 November 2026, the contracting of a credit operation amounting to 240,000,000.00 euros, intended to repay, in the 2027 financial year, existing loans of the Autonomous Region of Madeira and its public enterprises included in the universe of public administrations. The operation is divided into three financings: a loan of 70,000,000.00 euros with ABANCA Portugal, S.A. and two bond loans of 47,900,000.00 euros and 122,100,000.00 euros, the latter two with the personal guarantee of the Portuguese Republic.

What was decided#

Resolution of the Regional Government Council no. 1035/2026 ratifies the consultation of several banks for the submission of proposals and authorises the contracting of the three financings. A resolution is an act of the Regional Government Council that decides on matters within its competence, in this case based on Article 14 of Regional Legislative Decree no. 8/2025/M, of 30 December, which approved the Region's Budget for 2026.

According to the document, the proposals considered most advantageous were those submitted by ABANCA Portugal, S.A., for the 70,000,000.00 euro loan, and by a consortium formed by Banco BPI, S.A., Banco Comercial Português, S.A., Banco Santander Totta, S.A. and Caixa - Banco de Investimento, S.A., representing the Caixa Geral de Depósitos Group, for the two bond loans. The completion of the latter depends on obtaining the personal guarantee of the Portuguese Republic.

Legal framework#

The Region may take out loans to replace and repay earlier debt under Article 38(1) of Organic Law no. 2/2013, of 2 September, known as the Finance Law for the Autonomous Regions. The State guarantee was authorised under Article 62(8) of Law no. 73-A/2025, of 30 December, which approves the State Budget for 2026, through dispatches of the Secretary of State for the Treasury and Finance of 4 November 2026. A personal State guarantee means that the Portuguese Republic answers to creditors if the Region fails to meet its obligations.

Amounts, terms and conditions#

Bank loan with ABANCA Portugal, S.A.#

• Amount: 70,000,000.00 euros, in the form of a loan agreement.
• Drawdown: upon requests by the Region, with minimum amounts of 14,000,000.00 euros, 40,000,000.00 euros and 16,000,000.00 euros, in January, May and November 2027, respectively.
• Term: 186 months, counted from the date of the contract.
• Repayment: in four constant and successive annual instalments, the first falling due 12 years and 6 months after the date of the contract.
• Interest rate: 3.265% for the first 12 months and, for the remainder of the term, the six-month Euribor rate (with a floor of 0%) plus a spread of 29 basis points. Euribor is the interbank reference rate of the euro area.
• Interest payment: semi-annual.
• Applicable law and jurisdiction: Portuguese law and the Court of Lisbon.

Bond loans#

The two loans are fixed-rate bond issues, by private placement, with a nominal value of 50,000.00 euros per bond and an issue price of 100% of nominal value. The following conditions are common to both:

• Term of 15 years, with repayment in four equal annual instalments, in the 12th, 13th, 14th and 15th years counted from the subscription date.
• Fixed interest rate, equivalent to the mid-swap rate for the average term of the issue plus 41 basis points, to be set on a date close to subscription.
• Interest calculated on an actual/actual basis, with annual payment.
• Up-front commission of 1% (flat).
• Admission to trading on the regulated market Euronext Lisbon.
• Portuguese law and the Court of Funchal as competent jurisdiction.
• Underwriting guarantee provided by the banking syndicate, with 25% for each of the four banks involved.

The 47,900,000.00 euro loan may be subscribed until 29 January 2027, and the 122,100,000.00 euro loan until 31 May 2027. Interest payments will be made by Banco BPI, Millennium investment banking, Banco Santander and CaixaBI, on an annual rotation basis.

State guarantee and commission#

The personal guarantee of the Portuguese Republic is granted in exchange for a guarantee commission of 0.2% per year. The document does not state the annual value of this commission in euros.

Contracts and mandate#

The resolution approves the draft loan agreement with ABANCA Portugal, S.A., as well as the contracts for organisation, arrangement, placement and underwriting guarantee, and the paying agent contracts for the bond loans. The drafts are filed with the General Secretariat of the Presidency of the Regional Government. The Regional Secretary for Finance is mandated to sign the contracts and carry out the acts necessary for their execution.