Following the downgrade of the French State by one notch from AAA to AA+ on July 12th 2013, Fitch Ratings appreciates that the downgrade impacts the whole French banking system.
The rating agency thus downgraded most of the players of the French banking system by one notch.
Following this downgrade of the sovereign, the agency also estimates that the credit rating quality of the whole French public sector is affected.
In the new schemes of the agency published on the beginning of 2013, modeled losses for the assets cover-pool under stress scenarios of the public sector increase as soon as the related sovereign rating is downgraded by one notch and this rating falls below the issuer rating. FitchRatings considers that Compagnie de Financement Foncier exposure to the French public sector (currently amounting to 17% of the assets) requires a substantial increase of the overcollateralization because of the downgrade of the French State.
As a consequence, it placed Compagnie de Financement Foncier issuance program on Rating Watch Negative awaiting for a new calculation of the minimum overcollateralization level required for a AAA rating.
On that specific point Compagnie de Financement Foncier is waiting for information that will be released by the rating agency to take decisions.
