In the Zagreb Assembly, amendments to long-term loan contracts and reprograms supported

Representatives of the Zagreb City Assembly supported two conclusions on the conclusion of amendments to the long-term loan contract under more favorable conditions and a conclusion on the reprogramming of two long-term loans with Erste Bank at the meeting on Monday.

The City of Zagreb concluded a long-term loan agreement with Zagrebačka Bank on December 27, 2013, for the amount of 150,000,000 kuna in euro equivalent, applying the average exchange rate of the Croatian National Bank (HNB) with an interest rate of six-month EURIBOR + fixed margin of 5.357 percentage points per annum upon maturity at the level of the applicable statutory default interest rate. According to the proposed conclusion, the City of Zagreb and Zagrebačka Bank will agree that the remaining debt on the loan amounting to 2,456,388 euros will be repaid after prior conversion into a kuna loan at the average exchange rate of HNB on the day of concluding the amendment to the loan agreement. This will be at a fixed interest rate of 2.20 percent per annum, annually with conversion into a kuna loan upon maturity at the level of the applicable statutory default interest rate.

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Furthermore, the City of Zagreb, based on the Conclusion on the borrowing of the City of Zagreb and the consent of the Government of the Republic of Croatia, concluded a long-term loan agreement with Zagrebačka Bank on December 16, 2014, for the amount of 190,000,000 kuna in euro equivalent, applying the average exchange rate of HNB with an interest rate of six-month EURIBOR + fixed margin of 4.457 percentage points per annum upon maturity at the level of the applicable statutory default interest rate. Based on the conclusion, the City of Zagreb and Zagrebačka Bank d.d. will conclude an amendment to the contract whereby it will be agreed that the remaining debt, which on March 31, 2018, amounts to 9,299,171 EUR, will be repaid after prior conversion into a kuna loan at the HNB exchange rate on the day of concluding the amendment to the contract in kuna equivalent at a fixed interest rate of 2.20 percent per annum.

The conclusion on reprogramming refers to the loans that the City of Zagreb and Erste&Steiermärkische Bank d.d. concluded on December 15, 2015, according to the long-term loan agreement based on the Conclusion on the borrowing of the City of Zagreb and the consent of the Government of the Republic of Croatia for the amount of 190,000,000 kuna with a currency clause in euros and on December 23, 2016, according to the long-term loan agreement with the consent of the Government of the Republic of Croatia for the amount of 200,000,000 kuna.

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The remaining unpaid amount of the first loan, which on March 31, 2018, amounts to 15,534,117 EUR, will be reprogrammed with a currency clause in euros and an interest rate that is the sum of the six-month EURIBOR and the applicable margin of 2.7 percent per annum, states the conclusion.

The remaining unpaid amount of the loan from the second loan, which on March 31, 2018, amounted to 175,000,000 kuna, will be reprogrammed with conversion into kuna at an interest rate that is the sum of the yields from Treasury bills of the Ministry of Finance for 182 days and the applicable margin of 0.98 percent per annum.

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During the discussion, representative Zvane Brumnić (SDP) asked what the main projects in Zagreb were achieved in the past year, in which a loss of 385 million kuna was recorded. They were not achieved, and losses occurred, he asserted and asked what was done.

He reminded that this year’s planned projects include the reconstruction of the Remetinec roundabout and the construction of the Sljeme cable car and warned that, according to this, this year’s loss could be as much as one billion kuna. “Bandić and his coalition are leading the city to ruin,” Brumnić believes.