Agence France Locale The French Local Government Funding Agency February 2015 Structure and governance Values and missions Agence France Locale was created in December 2013 as a result of a new banking legislation dated 26 July 2013. Agence France Locale is 100% owned by French Local authorities. Its mandate is to raise cost-efficient resources in capital markets by pooling together the funding needs of all member local authorities. It aims to provide French local authorities with alternative funding sources : its target market share is 25%. It will lend 50% maximum of its members’ annual borrowing needs (or 100% if the amount requested is below €1 million). Any financially sound French local authority may join the Agency. Every new member has to subscribe to the capital of Agence France Locale - Société Territoriale and pay up a contribution calculated on the local authority’s debt profile. Agence France Locale The Group governance is based on a dual structure: Tour Oxygène Agence France Locale - Société Territoriale: 100% owned by member local authorities, it sets the strategic guidelines 10-12 Bd Vivier Merle Agence France Locale (Aa2/P-1): it is a credit institution which raises funds in capital markets and distribute conventional amortising bank loans to local authorities A well-recognised model which has already proven successful in various Northern European countries. Stringent financial policies Asset credit quality Only French local authorities are allowed to join Agence France Locale and by law: They may only borrow funds in order to finance their investments They must ensure to make capital repayments of their borrowings from their own resources They cannot vote or run a budget deficit Agence France Locale will comply with all prudential regulations imposed on banking institutions and will always maintain above-standard prudential liquidity and capital requirements. GUARANTEE STRUCTURE Unconditional, explicit, joint and several guarantee given by the French local authority members FINANCIAL RATINGS Aa2/P-1 (Moody’s) Yves Millardet Liquidity risk will be mitigated thanks to: Chairman of the Executive Board A significant liquidity buffer invested in liquid and mostly ECB-eligible assets + 33 (0)4 81 11 29 27 A stringent issuance policy in order to avoid any excessive concentration effect Thiebaut Julin Full ECB-eligibility of the loan portfolio to local authorities Member of the Executive Board Statutory priority allocation of profits to reserves (95% minimum) Funding strategy Each member local authority acts as guarantor up to the amount of its outstanding borrowings (principal, interest and incidentals) with the Agency. Members that are called have an immediate recourse to the other members so as to ensure a solidarity among all of them. Inaugural bond issue: first Euro benchmark beginning of 2015. Creditors benefit from a dual first call guarantee system: In the event of the Société Territoriale Guarantee being called, Société Territoriale may call on the Members’ Guarantee. It may also call the Members’ Guarantee as a preventive measure to avoid any due date payment default by Agence France Locale. www.agence-france-locale.fr Interest rate and currency risks will be fully hedged. Guarantee structure Société Territoriale Guarantee: independent first call guarantee undertaking provided by Société Territoriale. 69003 Lyon - France Agence France Locale offers its members only vanilla loans: structured products are prohibited. Funding Agency CONTACTS Stringent assessment is made of their financial position before any membership approval and loan extensions are subject to regular financial reviews. Members Guarantee: independent and individual first call guarantee undertakings made by each member. The French Local Government Hedging of all risks generated by the financial activities: They cannot go bankrupt and benefit from strong State support should they experience major financial difficulties ISSUER Future issuance activities: Agence France Locale will favour Euro-denominated issues but also plans to gain access to other markets: USD, GBP, CHF, JPY, AUD, NOK, SEK, DKK, etc. Public issues and private placements through an EMTN programme, stand alone bond issues (NSV for instance) and schuldschein. Agence France Locale will implement a specific process designed to attract SRI investors (socially responsible investment). [email protected] Chief Financial Officer + 33 (0)4 81 11 29 33 [email protected] Romain Netter Executive Director Medium and long-term funding + 33 (0)4 81 11 29 40 [email protected] Raphaël Bellan-Payrault Executive Director Treasury and short term funding + 33 (0)4 81 11 29 43 [email protected] Carole Gostner Project Manager Finance Department + 33 (0)4 81 11 29 41 [email protected] For further information, please visit our website: www.agence-france-locale.fr This presentation has been prepared for information purpose only and does not constitute any recommendation, solicitation, offer or invitation to purchase or subscribe any securities issued by the Agency. This presentation may be amended to the sole discretion of the Agency which makes no warranty as to the correctness, accuracy or completeness of the information contained herein. The Agency shall have no liability whatsoever for any damage arising from any use of this presentation. Each recipient of this presentation shall consult with its own advisers to assess the relevance of any decision to invest in the securities issued by the Agency.
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