Cases & Deals

Société de Financement Local created and related transfer of Dexia Municipal Agency in connection with market withdrawal of Dexia

Client(s) Société de Financement Local

Jones Day served as counsel to Société de Financement Local (SFIL), a newly created credit institution approved by the Autorité de contrôle prudentiel and owned by each of the French State; Caisse des dépôts et consignations (CDC); and La Banque Postale (LBP); in connection with the response to the structural financing difficulties encountered by the local public sector following the withdrawal of Dexia SA from the public market. Caisse Française de Financement Local (CAFFIL), formerly known as Dexia Municipal Agency and a subsidiary of Dexia Crédit Local, was transferred to SFIL and is responsible for refinancing the loans originated by the group acting as covered bonds issuer. Jones Day also advised CAFFIL on this matter.

SFIL will act as manager of the outstanding €90 billion in loans granted to the public sector, including €9.4 billion of structured credits, previously marketed by Dexia Crédit Local and registered on the balance sheet of Dexia Municipal Agency.

CAFFIL will continue to act as covered bonds issuer for the refinancing of the loans to be granted to regional authorities, local authorities, and public health establishments that are now distributed by La Banque Postale. To this end, a joint venture will be formed between La Banque Postale and CDC in the form of an IOB (banking intermediary). SFIL will also renegotiate at least €1 billion each year of sensitive loans registered on the balance sheet of CAFFIL. Lastly, SFIL will hire 400 individuals, of which two thirds were previously employed by DCL, upon the completion of various IT asset transfers from DCL.