On March 18, 2014, the Bank of Spain gave credit institutions consistent criteria to apply the provisions of Circular 4/2004 to restructuring transactions resulting from the refinancing agreements regulated under the Insolvency Act, complying with the stipulations of Additional Provision One of Royal Decree Law 4/2014, which assigned the drafting of those criteria to the Bank of Spain.

The notification establishes that the amounts owed after a refinancing agreement, as regulated under article 71 bis and Additional Provision Four of the Insolvency Act, will be classed as normal risk from the date of the agreement if there are sufficient objective factors to confirm the possibility of recovery after the agreement and if the agreement is entered into as part of a viability plan allowing continuity of the debtor’s business activity in the short- and medium-term.

The Bank of Spain’s press release and the notification are available - in Spanish language- via the following links: press release and notification (the document setting out the consistent criteria is attached as an appendix to the notification).