Key terms of the 2013 funding guarantee
New funding guarantee scheme supporting the Dexia resolution
Within the framework of Dexia Group’s orderly resolution plan, an explicit funding guarantee was granted to Dexia Crédit Local by the Belgian, French and Luxembourg States. The guarantee, which came into effect on 24 January 2013, is granted by force of law in each of the three States.
The guarantee allows Dexia Crédit Local and Dexia Crédit Local New York Branch to borrow up to EUR 85 billion in principal. The outstanding principal amount under the guarantee is disclosed on a daily basis on the National Bank of Belgium website.
The maximum maturity of the securities issued under the guarantee has been set at 10 years in order to give the Group the ability to refinance its assets over the long term. In order to benefit from the guarantee, borrowings must be issued on or before 31 December 2021.
The guarantee is on first demand, unconditional and irrevocable. In particular, the guarantee is also several and not joint, which means that if the guarantee is called upon, each guarantor will be obliged to fulfil its payment obligations only to the extent of its proportional commitment set out under the guarantee (51.41% for Belgium, 45.59% for France and 3% for Luxembourg).
The 2013 government guarantee agreement concluded between Dexia Crédit Local and the States
Rating and prudential treatment of securities issued under the guarantee
The rating of the short and long-term debt guarantee programmes of Dexia Crédit Local reflects the outlook for the Belgium sovereign, the main guarantor:
· A-1+ and AA by Standard & Poor’s
· F1+ and AA by Fitch Ratings
· P1 and (P)Aa3 with stable outlook by Moody’s
2. Risk weighting
The National Bank of Belgium and the French banking supervisor confirmed that securities issued under the government guarantee benefit from a 0% risk weighting.
3. Eligible as HQLA Level 1 asset for the calculation of the Liquidity Coverage ratio
The Delegated Act of the European Commission on the Liquidity Coverage ratio, published on 10 October 2014, declared that Dexia's guaranteed issues are HQLA Level 1 (Article 35 on page 57), thereby having the same level as sovereign bonds issued by State agencies.
Delegated Act of the European Commission
Characteristics of the government guaranteed funding programmes
Given the long-term nature of the run-off, Dexia Crédit Local will be present in the market for a long time via regular issues, constituting a complete liquidity curve with short and long-term securities in EUR, USD and GBP.
Click on the name of the programme in order to access the prospectus.
(NEU CP, ECP, EMTN, USMTN, NEU MTN (guaranteed part))
2016 Achievements year-to-date
Figures are updated on a quarterly basis.