Agence France Locale will make its stage entrance in November with the launch of a €1 billion benchmark bond.
 |
| We want to show to all French governments issuing debt that they have their place in AFL Yves Millardet |
Yves Millardet, CEO, says the issue will show French local authorities and markets that the embryonic agency is “an important actor”. It expects to raise up to €2 billion in 2015.
Critical timing decisions remain in the hands of the French regulator, which is negotiating governance structures with AFL. Says Millardet: “There is no similar organisation in France. We are having to explain our shareholder structure.”
AFL aims to represent 25% of the French market in local authority debt, a total of €4 billion. Millardet says: “This gives us a chance to affect pricing for the whole market.”
The collapse of French bank Dexia was one impetus to establishing AFL. Dexia was providing 50% of the liquidity in the market; its local authority debt is now being wound down through a bad bank created out of the Dexia shell. Covered bonds are currently provided to local authorities by La Banque Postale.