Royal Decree-Law 14/2013 ("RD-L 14/2013"), of 29 November, of urgent measures to adapt Spanish law to European Union regulations on the supervision and solvency of financial institutions, that entered into force on 1 December, clarifies the insolvency qualification regime applicable to the credits transferred by SAREB, to third parties, thus modifying section h) of article 36.4 of Act 9/2012, of 14 November, on the restructuring and resolution of credit institutions ("Act 9/2012").

Before the amendment, the above article of Act 9/2012 established that the credits transferred to SAREB would not qualify as subordinated in the event of insolvency of the debtor, even if SAREB were a shareholder of that debtor, unless the credit would already have been classified as subordinated before being assigned to SAREB.

Thus, as a general rule, credits acquired by SAREB from a third party could not qualify as subordinated even if SAREB were considered to be especially related to the debtor or if SAREB had acquired the credit from an individual or company considered to be especially related to the debtor.

However, the regulation makes no provision as to what insolvency qualification should apply to a credit acquired by a third party from SAREB when the latter meets the requirements provided in article 93.2 of the Spanish Insolvency Act to be considered especially related to the debtor or has acquired the credit from an individual or company that is considered to be especially related to the debtor. This uncertainty has led to a number of different interpretations and has raised substantial problems where SAREB has transferred credits to third parties.

RD-L 14/2013 solves these issues by introducing a new paragraph in section h) of article 36.4 of Act 9/2012, which states that "the regime provided in this section will also be applicable to who, by any title, acquires the credits of the Sociedad de Gestión de Activos Procedentes de la Reestructuración Bancaria, except where, independently of the circumstances of the transfer, the acquirer already meets any of the criteria for subordination provided in article 92.5 in relation to article 93 of the Insolvency Act, in which case the credits will be qualified as applicable pursuant to the general rules."

Consequently, credits acquired by a third party from SAREB will not qualify as subordinated credits in the event of the potential insolvency of the debtor merely as a result of SAREB being especially related to the debtor or having acquired the credit from a third party that was equally especially related to the debtor. For those credits to qualify as subordinated within the insolvency proceedings affecting the debtor, one of the following circumstances should be present:

  • the credit has already been qualified as subordinated before being transferred to SAREB; in other words, the credit was transferred by SAREB to a third party after the debtor was declared insolvent and after the credit was qualified as subordinated in the insolvency proceeding; or
  • the acquirer of the credit transferred by SAREB, and independently of the circumstances surrounding the transfer of the credit, already met, at the time of the transfer, any of the causes triggering subordination provided in articles 92.5 and 93 of the Insolvency Act (basically, that the acquirer met the requirements to be considered an especially related person).