Government measures in key jurisdictions 5th edition - Flipbook - Page 98
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 13 November
2020, the government decided to extend the SGS to 30 June 2021. The government will
continue to consider the necessity of the State Guarantee Scheme. Moreover, further
extensions 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 16 December 2020 the Norwegian
Central Bank advised the Ministry of Finance not to raise the countercyclical buffer and
the countercyclical buffer remains unchanged at 1%. According to the Norwegian Central
Bank’s assessment of economic developments, advice will be given on increased buffer
requirements during 2021. They envisage that the buffer will eventually return to 2.5%.
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. The government decided to extend
the term of the guarantees from two to three years. In addition, the period within which
loans may be taken up under this scheme is extended to 30 June 2021.
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Government measures in key jurisdictions
