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Code of Good Practice

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    On 11 May 2021, the Council of Ministers approved the Code of Good Practice for the renegotiation framework for clients with guaranteed financing set forth in Royal Decree-Act 5/2021, of 12 March, on extraordinary measures to support business solvency in response to the COVID-19 pandemic.

    The Code of Good Practice implements said Decree and, among other measures, it makes provision for a further extension to the maturity date of ICO loans.


    Financial institutions that have benefited from the guarantees issued pursuant to Royal Decree-Act 8/2020 of 17 March and Royal Decree-Act 25/2020 of 3 July have one month to report that they are adopting the Code of Good Practice, a period which commenced on 12 May and ends at 24:00 on 12 June. The procedure for reporting adoption of the Code is governed according to the Resolution of 12 May 2021, which is now published on the website of the Treasury Office.[1] After the set period has passed, this Office will publish the names of the entities that have adopted the Code and the names of those that have not done so.


    The further extension of the maturity dates of guarantees only applies to those institutions that have adopted the Code of Good Practice. The adoption of the Code by those institutions requires them to extend maturity dates, provided that the debtor meets certain eligibility requirements, as stipulated in the Agreement itself (Annex II) and in Royal Decree-Act 5/2021 (fourth additional provision).

    We highlight some of these requirements, such as the absence of arrears, for the debtor not to be undergoing bankruptcy proceedings, for the debtor’s application to have been made no later than 15 October of the current year and for turnover to have fallen by at least 30% in comparison with 2019.

    Regarding the requirement related to a fall in the level of turnover, it seems that this is the only requirement that the debtor may fail to meet and yet continue to benefit from the deferment, although a failure to meet said requirement means that the financial institution is not obliged to grant the extension. In such cases, said extension to the maturity may be agreed voluntarily between the parties.

    For those debtors who receive public subsidies for the amount of 1,800,000 euros or less and debtors who receive an amount exceeding 1,800,000 an additional period of no more than 2 years is provided for if the term of the transaction has already been extended and 5 years if it has not.

    Finally, it is worth noting that the costs are fixed for debtors who owe less than 1.8 million euros, i.e. the transaction incurs the same fee as it did prior to the extension of the maturity date. However, the costs rise for debtors who owe more than 1.8 million euros.