On Apr. 2, ITA ABI announced agreement on suspension of payment.
ITA ABI announced it signed new framework agreement on suspension of payment of capital portion of mortgages of local authorities.
Signed with National Association of Italian Municipalities and Union of Italian Provinces.
Follows ITA ABI Apr. 2024 circular informed members of new framework see #181384.
Overview
The aim is to continue to support local authorities in light of difficulties generated by the increase in prices of electricity, gas and fuel.
The agreement defines guidelines on basis of which adhering banks can proceed with suspension of payment of principal portion of installments of mortgages granted to local authorities expiring from Mar. 21, 2025, up to and including Dec. 31, 2025.
According to the agreement, suspension period is 12 months, with consequent extension of original repayment plan for period equal to duration of the moratorium.
Re interests on suspended capital, these must be paid to bank at original due dates.
Key Requirements
The financing subject to suspension must have some characteristics i.e. be stipulated according to technical form of mortgage; registered to local authorities with repayment costs entirely at their own expense; debtor and beneficiary must coincide.
It must not have been granted on basis of special laws; must be being repaid; must not have overdue, unpaid installments for +90 days at time of submitting application.
At time of submitting the application, local authorities must not be subject to dissolution procedures due to mafia infiltration or similar phenomena.
Further, delinquent or insolvent authorities without stable rebalanced budget approved at time of submitting application are excluded from the measure.
It is possible for participating bank to offer, at its will, better conditions than those in Agreement (remains unchanged), without prejudice to limits set by reference rules.
The list of participating banks will be published on the ITA ABI website.
Effectiveness
Suspension requests must reach the participating banks by May 9, 2025.
