The surplus of assets not financed by covered bonds, the “over-collateral”, is financed by the Company’s equity and by a debt contracted with Dexia Credit Local, its sole shareholder. This debt carries no privilege and is thus subordinated to the covered bonds.
In addition to equity, Dexia Municipal Agency uses two categories of debt to finance its assets:
- debt that benefits from the legal privilege, defined by law as obligations foncières or other resources that benefit from the legal privilege by reason of their contract. Dexia MA thus issues registered covered bonds that benefit from the legal privilege;
- debt that does not benefit from the legal privilege, i.e. debt that is not covered by the assets and is, therefore, considered as subordinated debt with regard to debt benefiting from the legal privilege. With equity, such debt finances over-collateralization.
This non-privileged debt is obtained from Dexia Credit Local within the framework of a current account agreement.
The agreement distinguishes several sub-accounts that make it possible to analyze this financing by category:
- to finance structural over-collateralization of 5% in the long term;
- to finance temporary over-collateralization in the short term, using the current account itself.
Temporary financing may also be obtained from the Banque de France. These funds do not benefit from the privilege stipulated in the law on sociétés de crédit foncier, but they are guaranteed by loans and securities deposited in guarantee in the account of Dexia Municipal Agency at the Central Bank.
