Paris, 15 February 2017
Section R.513-3 IV of France's Monetary and Financial Code (“CMF”) stipulates that, as of 31 December 2017, sociétés de credit foncier (or “SCF”, which are issuers of regulated French-law covered bonds) will no longer be permitted to hold securities issued by securitization vehicles (fonds commun de titrisation, or “FCT”) in amounts exceeding 10% of the face value of their covered bonds and other secured debt outstanding.
CIF Euromortgage, whose assets consist almost exclusively of senior notes issued by the FCT CIF Assets (“CIF Assets”), has had to reorganize its assets to comply with the new regulations governing SCFs.
In December 2015 CIF Euromortgage and the Crédit Immobilier de France Group (the “Group”) informed the Prudential and Resolution Supervisory Authority (ACPR), France's banking industry supervisor, of an action plan entailing the early dissolution and liquidation of CIF Assets and its sole sub-vehicle, CIF Assets 2001-1, in compliance with sections § L.214-183 and § R.214-226 of France's Monetary and Financial Code (CMF), and the implementation of a new method for ensuring the Group's funding.
On 14 September 2016 CIF Euromortgage's Board of Directors approved the terms of CIF Assets's dissolution and liquidation, as well as the means for implementing the new method for ensuring the Group's funding.
Section 154 of France's “Sapin II Act” of 9 December 2016 concerning transparency, the fight against corruption, and the modernization of the economy now authorizes SCFs to grant loans backed by the transfer, sale, or pledging of receivables as collateral, as it had already allowed for sociétés de financement à l'habitat (or “SFH”, which along with SCFs, are also regulated French-law covered bond issuers).
On 15 February 2017 the Group dissolved CIF Assets and, accordingly, changed its financing procedure. It now raises funding by having CIF Euromortgage grant secured loans to the Group backed by contractually eligible receivables that have been transferred to it as absolute property, pursuant to CMF § L.211-38.
The rating agencies Moody's and Fitch, which the Group has informed and consulted on these changes, have maintained their ratings following the dissolution of CIF Assets.
As a reminder, when the Group entered orderly resolution on 27 November 2013, the Republic of France granted its permanent guarantee totaling €28 billion until 2035: €12 billion in respect of the internal guarantee of which CIF Euromortgage will now be the sole beneficiary, and €16 billion in respect of the external guarantee. This €16 billion external guarantee covers securities issued by Caisse Centrale du Crédit Immobilier de France–3CIF, the issuing entity responsible for ensuring the Group's funding.
Covered bonds issued by CIF Euromortgage continue to satisfy the Capital Requirements Regulation (CRR). CIF Euromortgage has obtained the Covered Bond Label. The Covered Bond Label is an initiative of the European Covered Bond Council (ECBC). The Covered Bond Label's Harmonised Transparency Template, which contains the data pertaining to CIF Euromortgage, can be found on the following Web sites:
- http://www.cif-euromortgage.com/rapport-annuel
- https://coveredbondlabel.com/issuers/national-information-detail/2/
Contact: Philippe Oriez
Managing Director, Investor Relations
philippe.oriez@3cif.fr
Phone: +33(0)1-7091-3715
