MADRID: Spain’s bad bank said on Friday it had sued Spanish lenders, such as Caixabank and Sabadell in a Madrid court, seeking to recoup negative interest payments on its 34.5 billion euros senior debt portfolio.

The institution, set up to take on bad loans from the financial crisis in 2012 and known by its Spanish acronym Sareb, took over more than 50 billion euros ($56.52 billion) in real estate and other toxic assets from nine savings banks.

In exchange, it issued debt underwritten by the state for the same amount. After selling 15.9 billion of all debt issued, Sareb still holds 34.5 billion euros in senior debt.

Sareb’s senior debt is benchmarked to the three-month Euribor plus a spread that in no case may exceed 2%. In its original design there was no floor but in 2015 when interest rates turned negative and the ECB did not accept as collateral bonds with a negative coupon in its liquidity facilities, it introduced a floor of 0% in its issues.

In 2017, the ECB changed its criteria and accepted bonds with a negative yield as collateral. Sareb is now demanding to be able to remove the floor and charge lenders for the negative interest on its senior debt. On Friday, it said it filed the lawsuit in the best interest of Spanish taxpayers.

Spain’s state rescue fund FROB holds a 45.9% stake in Sareb, while the rest is owned mainly by banks. A spokesperson for Sareb said that in 2020, the bad bank missed out on 145 million euros because the floor was in place.