Bpifrance launches pioneer €2 billion ESN program
Client(s) Bpifrance S.A. and BNP Paribas
Jones Day acted as legal adviser of Bpifrance and BNP Paribas, as co-arrangers, in the setting up of an innovative €2 billion European Secured Notes (ESN) program through the establishment of a French fonds commun de titrisation (FCT) named “Bpifrance Master ESN FCT”. The structure contractually replicates a typical French regulated covered bonds structure with double recourse over Bpifrance, as borrower, and a cover pool composed of French SME loans transferred by Bpifrance to Bpifrance Master ESN FCT in full title by way of financial collateral arrangement governed by articles L.211-38 et seq. of the French Monetary and Financial Code implementing the Directive 2002/47/EC of the European Parliament and of the Council dated 6 June 2002 on financial collateral arrangements (the Collateral Directive). The first series of Notes was issued under the program by Bpifrance Master ESN FCT on 17 June 2026 for an aggregate amount of €750 million, listed on Euronext Paris and rated Aaa by Moody's.
Bpifrance Master ESN FCT is a pioneer project aiming at developing an alternative instrument to regulatory covered bonds in order to finance SME loans. This initiative falls within the European initiative on “European Secured Notes (ESN)” on which the European Banking Authority (EBA) published a report in 2018 (EBA Report on the European Secured Notes (ESNs) on 24 July 2018), in response to the call for advise (CfA) received from the European Commission sent in October 2017 (i) to assess whether or not a covered-bond-like dual-recourse instrument may provide a useful funding alternative to banks engaged in lending to SMEs and lending to infrastructure projects and (ii) to determine an appropriate EU framework and regulatory treatment for this new product. This assessment and the launch of Bpifrance Master ESN FCT may possibly pave the way to the creation of a new distinct pan-European structured debt instrument dedicated to the refinancing of SME loans and infrastructure projects.
