Sensitivity reduction

Sensitivity reduction

A responsible and proactive sensitivity reduction policy

SFIL is conducting a sensitivity reduction policy in accordance with the French government’s objectives for public finance management as well as the company’s own strategic interests. By emphasizing a dialogue-based approach, dedicated staff monitor each case individually based on its characteristics.

 

An approach consistent with the overall system sought by the French government

Since the creation of SFIL, the French government has affirmed its commitment to finding the fastest-possible, sustainable and comprehensive solution to the problem of sensitive structured loans marketed by the banks.

More about multi-year fund

Approved by the French Constitutional Council, the mechanism drawn up by the French government provides for:
– the creation of a €1.5 billion, multi-year support fund over 15 years maximum (€100 million per year).
In February 2015, this fund was doubled to €3 billion following the Swiss National Bank’s decision to eliminate the exchange rate floor of CHF 1.20 per euro. Meanwhile, the €100 million facility dedicated to hospitals was quadrupled (€300 million in additional support over 10 years).
– substantial financial resources to enable local governments to finance their exit from sensitive structured loans subscribed with the banks marketing them.

 

Sensitive, heterogeneous loans that require differentiated handling

At the time of its founding, SFIL established a precise nomenclature of sensitive loans that it inherited from Dexia through Caisse de Financement Local (Caffil).

Five homogeneous families have therefore been defined based on the sensitivity of the loans and the size of the borrowers in order to reduce their sensitivity in a suitable and effective manner (see table below).

The sensitivity reduction strategy, approved by SFIL’s Board of Directors, was designed to provide incentives and be implemented gradually. The sensitivity reduction is based on a favorable rate policy:
– refinancing prepayment penalties on loans at cost in order to help borrowers pay the penalties
– meanwhile, offering new financing at attractive rates.

 



  • Category S1

    • loans “not subject to the Gissler Charter” indexed on EUR/CHF

    • with small customers (local authorities with fewer than 10,000 residents and small hospitals)

  • Category S2

    • loans “not subject to the Gissler Charter” indexed on EUR/CHF

    • with all other customers

  • Category S3

    • other loans “not subject to the Gissler Charter” (indexed on exchange rate)

    • and sensitive loans listed in the Gissler Charter, whose interest rate formula is currently in effect (loans classified as 5E)

  • Category S4

    • sensitive loans listed in the Gissler Charter whose interest rate formula is not currently activated but has already been activated in the past

  • Category S5

    • sensitive loans listed in the Gissler Charter whose interest rate formula is not currently activated and is unlikely to be activated in the near term

Download the Half-Year Financial report 2018

Download the Half-Year Financial report 2018

Caisse Française de Financement Local

Caisse
Française de
Financement
Local