The American fund Blasket Renewable Investmens places Spain’s financial reputation in an unprecedentedly delicate situation in this 21st century by officially invoking the State in default. Blasket has already activated the so-called “default” clause in four issues of Spanish public debt in international markets worth some 910 million euros, according to documentation to which EL MUNDO has had access. This implies, according to sources close to this US fund, that “these public debt titles must be immediately reimbursed to creditors for their principal amount, together with the accrued interest.”
Blasket has been buying Spanish State bonds in the market in which the “event of default” clause is in force, which allows its holder to invoke it to protect himself from a debt that he cannot collect. This is his case, says Blasket, after winning an arbitration award against Spain for the cut in premiums for renewables and that the State has refused to pay. It is the same fund that, as published by EL MUNDO, has also activated the seizure of the headquarters of the Cervantes Institute in London and of an agency of the Generalitat of Catalonia in the British capital. It has already notified the Ministry headed by Nadia Calviño.
“Blasket Renwable Investments LLC has invoked the relevant clause and has triggered a “default” scenario in four Spanish sovereign debt securities maturing between 2029 and 2044, depending on the case,” the aforementioned sources explain and can be verified in letters to the Bank. The issues include one of 300 million dollars, 249 in British pounds and 149 in Japanese yen, as described.
To execute them, the clause provided for the case in which the State “fails to pay due and timely the principal, the premium, the advance payment (if any) or the interest of any debt of, assumed or guaranteed by Spain, at the time that said debt matures and the default continues beyond the grace period applicable to the operation in question”. The way to unlock these issues is a payment to, at least, Blasket, which has an outstanding debt of more than 200 million.
Spain refuses to pay up to now because it does not consider itself with a legal obligation to respond to this type of debt and says it has the support of the European Commission. “We will respond in due time and in the meantime we do not assume any responsibility. We reserve all our rights,” is the official response of the Ministry of Economic Affairs to Blasket. Authorized sources from the Ministry concisely add this statement to this newspaper: “Any initiative, by any channel against the Kingdom of Spain based on these awards will have a response in the appropriate sphere because Spain’s position is very well established and of course it has nothing to do with the State debt”. However, the formal requirement against the public debt is already activated and running.
The international awards issued by the ICSID -international court of arbitration- and linked to the retroactive reduction of incentives for investment in renewable energy have generated obligations of 1,175 million euros that have not been fulfilled with the affected companies and investors. That is why they are resorting to jurisdictions in countries outside the European Union such as the United Kingdom, the USA or Australia. In the US, the State Attorney’s Office has achieved some victories, but in the other two countries it has not been able to prevail so far.
The origin of this mountain goes back to the bonus regime offered by the Zapatero government, which generated such an imbalance that the Minister of Industry and Energy at the time, Miguel Sebastián, tried to cut it and, above all, the following Executive of Mariano Rajoy, with a retroactive snip to try to control the deficit that caused a rain of lawsuits involving foreign funds that alleged legal uncertainty. In cases like Blasket, heir to Infrared, with success. The Government of Sánchez tried to attract the funds with a formula to extend the premiums until 2031, but it was a failed operation and later it has followed the line of not paying those who have managed to win awards.
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