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First, in terms of the pricing of the third series of targeted longer-term refinancing operations (TLTRO III), the previously announced 10-basis point spread above the average interest rate of the Eurosystem’s main refinancing operations (MROs) and, for counterparties exceeding their lending benchmark, above the average interest rate on the deposit facility, will no longer be applied. The interest rate for TLTRO III will therefore be equal to the average rate applied to the Eurosystem’s MROs over the life of the respective TLTRO III operation.
Second, the maturity of TLTRO III operations has been extended to three years as of their settlement date. This longer maturity is better aligned with that of bank loans used to finance investment projects and thereby enhances the support that the operations will provide to the financing of the real economy, in view of the deterioration in the economic outlook since the maturity was originally announced in March 2019.
Third, following the extension of the maturity of TLTRO III operations, counterparties will be able to repay the amounts borrowed under TLTRO III earlier than their final maturity, at a quarterly frequency starting two years after the settlement of each operation.
These changes will apply as of the first TLTRO III operation to be allotted on 19 September 2019.