July 28, 2020 / 3:12 PM / 15 days ago

UPDATE 1-Spain unlocks first tranche of 8 blns euros from new credit lines for companies

(Adds details)

MADRID, July 28 (Reuters) - Spain’s government on Tuesday outlined its burden-sharing scheme for banks as part of a new set of state-backed credits to boost companies’ investment capacity, releasing an initial tranche of 8 billion euros, Spain’s economy minister Nadia Calvino said.

Speaking after the weekly cabinet meeting, Calvino said that 5 billion euros of the first tranche of the new aid package would go mainly to small and mid-sized companies and the self-employed, and the rest to bigger companies.

The package worth 40 billion euros, initially announced earlier in July together with a 10 billion euro fund to boost companies’ solvency, is designed to facilitate and promote investments in digital transformation and green energy.

As part of the scheme, the state will guarantee around 80% of unpaid loans to small and mid-sized companies and 70% for bigger ones, in line with a previous scheme of 100 billion euros approved in March, the minister said.

The guarantees will be extended for eight years, instead of the five years under the previous scheme.

Last week, the Bank of Spain’s governor encouraged the government to extend and recalibrate periodically any stimulus measures, such as the state-backed credit lines.

Calvino also said she expected the Spanish economy to experience an asymmetrical V-shaped recovery after an expected 9.2% decline in 2020 due to the economic fallout from the COVID-19 pandemic.

$1 = 0.8525 euros Reporting by Jesús Aguado; additional reporting by Belen Carreno and Emma Pinedo; Editing by Nathan Allen and Ed Osmond

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