Government measures in key jurisdictions 4th edition - Flipbook - Page 95
Norway
Lars Eirik Gåseide Røsås | lgr@thommessen.no | +47 23 11 13 38
Contributor: Thommessen
Loans and
financial
support
Has the
government put in
place any new
bank funding
schemes?
The Norwegian Government has set up financial aid for businesses, in particular through existing
and new liquidity assistance programs.
A. The State Bond Fund
A NOK 50 billion State Bond Fund has been passed to provide liquidity to larger Norwegian
businesses, through government purchases of bonds. The State Bond Fund will invest within all
business sectors. A significant portion of the State Bond Fund will be placed in non-financial
business, but the mandate also includes investments in bonds issued by banks. The mandate states
the investment scope within different sectors. The State Bond Fund will only be mandated to invest
in bonds issued by companies incorporated in Norway, i.e. business with their main office in
Norway. As of 8 May 2020 the mandate was adjusted to include not only investments in companies
with a rating of B- and higher, but also companies with a CCC+ rating.
B. State Guarantee Scheme
A NOK 50 billion State Guarantee Scheme ("SGS") for small and medium businesses has been
passed pursuant to which a state guarantee aimed at facilitating loans to small and medium
businesses ("SMB") which have experienced acute liquidity distress as a result of the Covid-19
outbreak. Under the SGS the state guarantees for 90% of each bank loan. SMBs are defined as
companies with less than 250 employees and yearly revenues not exceeding EUR 50 million, or
companies with a combined balance sheet not exceeding EUR 43 million. The State Guarantee
Scheme was on 2 April 2020 expanded to include larger companies not caught up by the definition
of SMB.
Under the State Guarantee Scheme SMBs are eligible for guarantees on loans up to NOK 50 million
and larger companies are eligible for guarantees on loans up to NOK 150 million.
On 20 May 2020 the government proposed to extend the SGS to beyond 1 June until 31 December
2020. The government will continue to consider the necessity of the State Guarantee Scheme.
Moreover, the extension must be approved by ESA. The EU recently resolved certain changes to
the rules on state funding, including extending the period for group exemptions until 2023, making
it possible to offer financial aid, under the group exemption, to businesses suffering financial
distress due to Covid-19. Moreover, ESA has resolved similar changes to certain important state
guarantee measures, which enhances the likelihood that ESA will approve the further extensions to
the SGS.
C. Reduction of countercyclical capital buffer
The Ministry of Finance has reduced the countercyclical capital buffer requirement from 2.5 to 1%
with immediate effect, later combined with proposal to prohibit dividend distributions by
Norwegian financial institutions. On 17 June 2020 the Norwegian Central Bank advised the Ministry
of Finance not to raise the countercyclical buffer and the countercyclical buffer remains unchanged
at 1%. It is not expected that the Norwegian Central Bank will advise to raise the countercyclical
buffer until Q1 2021, at the earliest.
D. Guarantee scheme for the aviation industry
A NOK 6 billion State Guarantee Scheme for the aviation transport industry has been passed. The
guarantee scheme will be administered by the Norwegian export finance institution GIEK. The
scheme entails the state guaranteeing loans up to 90%, with commercial lenders taking on the
remaining 10% exposure. The scheme is available to commercial airlines holding Norwegian Air
Operator's certificates. Of the total NOK 6 billion, NOK 3 billion has been allocated to Norwegian,
NOK 1.5 billion to SAS and NOK 1.5 billion to Widerøe together with some smaller airlines.
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Government measures in key jurisdictions