Credits arising under interest rate swap agreements are (i) insolvency credits, as they do not fulfil the requisite of functional synallagma dependent on reciprocal obligations, and (ii) subordinate, because they involve payment of credits arising due to interest.

These four rulings take exactly the same position with regard to challenging the classification as subordinate credits arising under interest rate hedging agreements within the framework of a transaction for project financing. The court relied on the criterion the Supreme Court applied in its rulings of January 8 and 9, 2013, similarly holding that a hedging contract is not an agreement with reciprocal obligations pending performance, as it lacks the functional synallagma that characterises these obligations (there is no connection between the settlements of the transaction, as the cause of each settlement is not established in the preceding one). It likewise denied application of the special insolvency regime provided for in Royal Decree-Law 5/2005, as there was no set of financial transactions included in or affected by the master netting agreement, which is an essential and structural requisite for protection under that regime: the interest rate swap is a single transaction, regardl ess of the occurrence of regular and successive settlements.

The court also found that credits arising under a hedging agreement are equivalent to credits due to interest, as these contracts serve to amend the interest agreed for financing. In an insolvency context, credits arising from settlements must be treated as interest and classed as subordinate credits. The court rejected the financial institutions’ claims and confirmed the classification of the credits as subordinate.