One Pager - Agence France Locale

Agence France Locale
The French Local Government Funding Agency
October 2016
Ownership and Missions
Agence France Locale is a local government funding agency
fully owned by French Local Authorities.
Agence France Locale was created in 2014 after the adoption
of the banking law dated 26th July 2013 which has conferred it
the mandate to finance local authorities in France.
Since 12 January 2015, Agence France Locale is a fully regulated specialised financial institution supervised by the French
banking regulator (Autorité de contrôle prudential et de resolution).
Agence France Locale provides French Local Authorities with
vanilla loans by raising cost efficient resources in capital markets by pooling the funding needs of its member local authorities.
The objective of Agence France Locale is to achieve a 25%
market share of the financing of French Local Authorities.
Structure and governance
By law Agence France Locale is composed of two companies,
Agence France Locale - Société Territoriale (ST), a holding
company exclusively owned by member local authorities and
Agence France Locale (AFL), the fully regulated specialised
financial institution rated Aa3 (stable) / P-1 by Moody’s, 99,9%
owned by the ST.
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Any French local authority that enjoys tax raising powers
may become a shareholder of the ST provided that it meets
a minimum scoring set by AFL’s internal scoring methodology.
A dual explicit irrevocable and first call guarantee mechanism is
available for financial creditors of AFL:

Borrowing by local authorities is strictly limited by law in France:

Borrowing is only possible for the purpose of financing
investments.

Capital repayment associated with outstanding borrowings
is made by local authorities from their own resources.
Local authorities in France cannot vote or run a budget deficit.
Bankruptcy or liquidation proceedings are not available for
French local authorities.
The financial position of local authorities is thoroughly analysed
by AFL before any loan granting based on its internal scoring
methodology.
AFL does not finance more than 50% maximum of the outstanding debt of any member except for a limited number of cases.
AFL only offers vanilla loans to its member local authorities and
has prohibited structured products
Stringent financial policies
Agence France Locale has set conservative financial policies.
While Agence France Locale assumes the credit risk of local
authorities by extending loans to its members, as its core mandate, it strives to mitigate market risks :

Interest rate risk is mainly hedged while currency risk is
fully hedged

Liquidity risk is mitigated thanks to:
Each new member has to subscribe to the capital of the ST
and to pay in a contribution which is determined from the
greater of 0,8% of the new member outstanding debt or
0.25% of its budget operating revenues.
Guarantee mechanism

Asset credit quality
Each member local authority provides an explicit and
irrevocable first call guarantee to the financial creditors of
AFL up to the amount of its outstanding debt received from
AFL. Members that would be called have an immediate
recourse to the other members so as to ensure a solidarity
among all member local authorities.
Agence France Locale - Société Territoriale (ST) also
provides an explicit and irrevocable first call guarantee to
the financial creditors of AFL up to an amount which is set
annually by the Board. In the event of a call of the ST
guarantee, the ST is likely to call all member guarantees.

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A significant liquidity buffer invested primarily in
assets that are both HQLA and ECB eligible

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The full ECB-eligibility of the loan portfolio of AFL
A maximum average life gap of one year between
assets and liabilities
A 5% maximum pay out ratio driven by the objective to
build up the capital base
Funding strategy
The funding strategy is essentially conducted through :
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A EUR 3 billion EMTN program.
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Euro denominated public issues
A EUR 1 billion ECP program
Issuance activities include:
Opportunistic private placements
Currency denominated opportunistic transactions
Euro commercial paper
For further information, please visit our website:
www.agence-france-locale.fr
ISSUER
Agence France Locale
Tour Oxygène
10-12 Bd Vivier Merle
69003 Lyon - France
www.agence-france-locale.fr
GUARANTEE MECHANISM
Each member local authority is guarantor up to
the amount of its total outstanding borrowings
received from AFL.
In the case whereby a local authority is called
in guarantee, it is conferred an immediate
recourse to all other members.
FINANCIAL STANDING
Aa3 (stable) / P-1 ratings by Moody’s
Eligible to ECB’s Public Sector Purchase
Program
20% risk weight under Basel II
CONTACTS
Yves Millardet
Chairman of the Executive Board
+ 33 (0)4 81 11 29 27
[email protected]
Thiébaut Julin
Chief Financial Officer
Member of the Executive Board
+ 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]
Flavien Douetteau
Executive Director
Asset and liability management
+33 (0)4 69 84 81 01
[email protected]
Amandine Deguin
Communication manager
+33 (0)4 81 11 29 31
[email protected]
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 Agence France Locale.
This presentation may be amended to the sole discretion of Agence France Locale which makes no warranty as to the correctness, accuracy or completeness of the information contained herein. Agence France Locale
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 Agence France Locale.