Act on State Debt and State Guarantees

Act No. 386/2002 Coll. on State Debt and State Guarantees, supplementing the Act No. 291/2002 Coll. on State Treasury, amending and supplementing certain other acts

This new act (the ``Act'') replaces the previous regulation in the area of state guarantees contained in the Governmental Order No. 91/1996 Coll. on State Guarantees.

State guarantees can be provided for loans of legal entities and for bonds issued by legal entities, intended mainly for financing of economically recoverable projects included in development programs declared by the Government of the Slovak Republic (the ``Government'') for support of industry, environment, transport, agriculture, forest economy and building of housing premises. State guarantees can also be provided for loans or bonds intended for repayment of previous loans or bonds guaranteed by state guarantees, or for premature bond repayment.

State guarantees can be granted in a particular budgetary year only up to the amount of principals from guaranteed loans becoming due in that budgetary year, and up to the amount of nominal values of guaranteed bonds becoming due in that year. An applicant for a state guarantee shall submit an application to the central body of state administration, responsible for the particular development program covering the loan or bond issue. The Act stipulates requisites of such application. The central body of state administration shall forward the application, after its approval, to the Ministry of Finance of the Slovak Republic (the ``Ministry of Finance''). The Ministry of Finance may provide the guarantee only upon an approval of the Government. Provisions of the Act No. 231/1999 Coll. on State Support as amended by the Act No. 434/2001 Coll. need to be followed. The Ministry of Finance concludes a contract on conditions of the guarantee, requisites of which are stated by the act, with a successful applicant.

In case the Ministry of Finance is obliged pay a debtor's obligation covered by the state guarantee, the debtor is obliged to conclude with the Ministry of Finance a contract on recoverable financial support, requisites of which are stated by the act. Such debtor may not transfer or contribute its property to other entrepreneurs or establish a security interest over its property before repayment of the financial support without a consent of the Ministry of Finance.

The Act also regulates state debt administration conducted by the Ministry of Finance and the Agency for Debt and Liquidity Management.

This Act became effective on 18 July 2002.

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