The Ministry of Finance and Administration (SFA) of Michoacán reported that the comprehensive refinancing of the inherited bank debt was completed.
In this regard, the State Secretary of Finance and Administration, Luis Navarro García, explained that it is the first time that a comprehensive refinancing operation of its bank loans has been achieved. The debt is made up of 18,608 million pesos, and from the refinancing there will be an estimated saving due to the release of flows in the payment of debt service of 2,700 million pesos, that is, an average of 540 million per year.
“Very favorable conditions were achieved through negotiations with banking institutions, so that the surcharge was reduced. We managed to increase the term of the operations to 20 years and we adjusted the payment profile to make it more accessible to the financial situation of the government of Michoacán”, he stressed.
In fact, the agency managed to reduce the weighted average surcharge on interest payments from 0.55 to 0.50 percent.
The official stressed that due to the credit reconfiguration, the reduction in the percentage of affected shares for the payment of credits went from 100 to 60%, which will expand the room for maneuver for the use of the main freely available resources.
“The resources will be immediately allocated to infrastructure works, financial consolidation or social actions, for the benefit of the people of Michoacán. This action will undoubtedly have a very positive impact on the development of the state and on the level of well-being of its inhabitants, ”he commented.
Behavior
According to the head of the SFA, this new movement is part of the strategy to improve state finances.
From October 2021 to February 2023, 4,553 million pesos have been paid for debts inherited from past administrations to the Mexican Social Security Institute (IMSS), Civil Pensions, Tax Administration Service (SAT) and suppliers.
“We received a disorder in public finances, we made the determination to undertake work based on actions and policies of austerity, discipline, order and transparency, so that we avoid causing more economic disasters that, finally, would have caused chaos and ungovernability. We carried out a comprehensive reengineering and proposed what we owe, to whom we owe and how and when we are going to pay it, work that allowed us to identify institutional, bank and supplier debts,” he stressed.
