PORTUGAL Law and Practice Contributed by: Manuel Requicha Ferreira and Diana Avillez Caldeira, Cuatrecasas
In Portugal, the effects of such uncertainty have also been felt, with companies seeking more flex- ible financing terms and investors becoming more selective. However, there were no relevant changes to spreads, and the refinancing trend is continuing in 2025, with several clients of the firm refinancing exist- ing debt, including existing high-yield bonds. 1.4 Alternative Credit Providers Alternative credit providers have not seen significant growth because credit activity is regulated in Portugal. This substantially limits the activity of alternative credit providers, such as funds, which can only grant loans in specific situations. Since 2019, loan funds have been recognised in Por- tugal. Loan funds are considered alternative invest- ment funds (AIFs) and are exempt from the banking monopoly rules, thereby allowing them to perform direct lending. They can grant loans (loan origination), as well as participate in loans acquired from the cred- it’s originator or from third parties (loan participation). Notwithstanding the foregoing limitation, there has been an increase in direct lending through the use of alternative funding schemes, such as the issuance of bonds. 1.5 Banking and Finance Techniques The limitations detailed in 2. Authorisation strongly curtail the evolution of banking and finance tech- niques. A good alternative method to raise financing is through the issuance and subscription of bonds integrated in a Portuguese clearing system, given that this activity does not qualify as a credit activity. This structure also presents certain tax advantages. There has been some development and growth of financing through crowdfunding, new digital platforms and loan funds, in accordance with new legislation. In 2022, participative loans were introduced in Portu- gal by Decree Law No 11/2022. These are financing arrangements in the form of loans or debt securities, where the remuneration can be indexed, exclusively or partially, to a share in the borrower’s profits and, in certain cases, may be converted into shares. How-
ever, this regime has a limited impact on the diversi- fication of financing, given that the entities that can grant participative loans (even if in the form of debt securities) are essentially those that are already quali- fied to grant credit. 1.6 ESG/Sustainability-Linked Lending In recent years, the environmental, social and govern- ance (ESG) and sustainability-linked lending market has grown significantly, becoming one of the most active markets. A number of ESG-linked loans and green bonds have been issued by different market players. Legislatively, mainly driven by the European Commis- sion and in accordance with Regulation (EU) 2020/852 (the “Taxonomy Regulation”) as well as delegated and implementing acts, a framework to facilitate sustain- able investment has been established. In 2023, a relevant piece of legislation for sustainable financing came into force, Regulation (EU) 2023/2631 of the European Parliament and of the Council of 22 November 2023, regulating European green bonds (EuGBs) and optional disclosure of information relat- ing to bonds marketed as environmentally sustainable, and to bonds linked to sustainability. This Regulation: • establishes uniform requirements for issuers of EuGBs that are made available to investors in the Union; • creates a system to register and supervise external verifiers of EuGBs; and • provides templates for optional disclosure of infor- mation in relation to bonds marketed as environ - mentally sustainable and sustainability-linked in the Union. More recently, in 2024, Regulation (EU) 2024/3005 (the “ESG Ratings Regulation”) came into force, introduc- ing new rules aimed at strengthening the reliability and comparability of ESG ratings in the EU. In the same year, Regulation (EU) 2024/2809 (the “Listing Act Regulation”) introduced new requirements for ESG disclosures into the Prospectus Regulation. As part of national legislation, Portugal approved the “Climate Basic Law” (Law No 98/2021), which includes
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