{"id":558,"date":"2018-08-08T16:01:16","date_gmt":"2018-08-08T14:01:16","guid":{"rendered":"http:\/\/foncier.fr\/?page_id=558"},"modified":"2020-06-26T05:36:39","modified_gmt":"2020-06-26T03:36:39","slug":"provenance-and-eligibility-of-assets","status":"publish","type":"page","link":"https:\/\/foncier.fr\/en\/provenance-and-eligibility-of-assets\/","title":{"rendered":"Provenance and eligibility of assets"},"content":{"rendered":"<div class=\"box msg\"><div class=\"titre\">A rigorous asset selection process<\/div><div class=\"content\">\n<ul>\n<li>Strict asset eligibility criteria<\/li>\n<li>Purchasing criteria that limit credit risk exposure<\/li>\n<li>Internal credit rating tools for each type of risk<\/li>\n<\/ul>\n<\/div><\/div>\n<a name=\"anc-69d771142e094\" class=\"space size1\" data-attr=\"1\"><\/a>\n<a class=\"chapitre\" name=\"our-assets-satisfy-laws-criteria\" href=\"#\">Our assets satisfy law\u2019s criteria<\/a>\n<h1 style=\"text-align: left;\">Our assets satisfy law\u2019s criteria<\/h1>\n<h3 style=\"text-align: left;\">Eligible assets are defined by law<\/h3>\n<p style=\"text-align: left;\">The Savings and Financial Security Act of June 25, 1999 defines the conditions upon which the\u00a0<em>soci\u00e9t\u00e9s de cr\u00e9dit foncier<\/em>\u00a0are authorised to grant or\u00a0to acquire (<a href=\"\/legal-safeguards\/\">article L.513-2<\/a>):<\/p>\n<ul>\n<li>secured loans (<a href=\"\/legal-safeguards\/\">article L.513-3 MFC<\/a>);<\/li>\n<li>exposures to or guaranteed by public authorities (<a href=\"\/legal-safeguards\/\">articles L.513-3\u00a0to L.513-7<\/a>\u00a0MFC);<\/li>\n<li>tranches and debt securities issued by a securitisation fund or a similar entity;<\/li>\n<li>debt securities and instruments deemed to be sufficiently secured and liquid.<\/li>\n<\/ul>\n<h3 style=\"text-align: left;\">Provenance of the selected assets<\/h3>\n<p>The assets of Compagnie de Financement Foncier originate from three main sources:<\/p>\n<ul>\n<li>the transfer of the eligible part from Cr\u00e9dit Foncier\u2019s balance sheet to Compagnie de Financement Foncier\u2019s at its inception;<\/li>\n<li>Before March 31st, 2019, the eligible loans bought from Cr\u00e9dit Foncier: residential mortgage loans, local authorities or public sector loans;<\/li>\n<li>From April 1st, 2019, the eligible loans bought from entities of Group BPCE: Public-sector and equivalent loans;<\/li>\n<li>the other eligible assets: loans and securities issued by the french and international public sectors and replacement values.<\/li>\n<\/ul>\n<h3 style=\"text-align: left;\">Diversified assets<\/h3>\n<p>Compagnie de Financement Foncier\u2019s assets\u00a0are composed of:<\/p>\n<ul>\n<li>mortgage housing loans in France<\/li>\n<li>loans to local authorities in France<\/li>\n<li>securities and public debt outside France<\/li>\n<li>replacement values and other assets<\/li>\n<\/ul>\n<div class=\"separate\"><\/div>\n<a name=\"anc-69d771142e142\" class=\"space size1\" data-attr=\"1\"><\/a>\n<a class=\"chapitre\" name=\"selection-method\" href=\"#\">Selection method<\/a>\n<h1 style=\"text-align: left;\">Selection method<\/h1>\n<h3 style=\"text-align: left;\">1st level: Cr\u00e9dit Foncier\u2019s debt selection system<\/h3>\n<p>Compagnie de Financement Foncier implements a strict asset selection process, including additional asset purchasing criteria that incorporate purchasing scores and minimum credit ratings by the loan originator, the Cr\u00e9dit Foncier.<\/p>\n<p>Thus, not only the quality of the eligible assets provides Compagnie de Financement Foncier with a high level of security, but the supplemental constraints that it imposes to itself and the internal credit ratings limit its credit risk exposure.<\/p>\n<p>Selection system and commitment monitoring at Cr\u00e9dit Foncier level are based on a system for assessing the borrower\u2019s creditworthiness.<\/p>\n<ul>\n<li>Assessment of the creditworthiness of private individuals is based on a systematic rating system at the origination and then on a monthly basis and on decision-making support tools developed by the Group. It aims at crossing data between customer and loan data at origination, loan guarantees, and takes into account the customer\u2019s credit history.<\/li>\n<li>In the same way public sector loans are subject to a systematic rating system at the origination and then on an annual basis:\n<ul>\n<li>Those for the French public sector are made through decision-making support tools; and<\/li>\n<li>Those for the international public financing are realized thanks to internal credit rating models. These models closely reproduce the models implemented by the three leading rating agencies and happen to be on average more conservative than our own.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<h3 style=\"text-align: left;\">2nd level: The acquisition filter<\/h3>\n<p style=\"text-align: left;\">Compagnie de Financement Foncier then selects the loans on the basis of their rating and, for mortgage loans, on their probability of default and their Basel III credit rating. The selected loans are bought by Compagnie de Financement Foncier at a market price and are covered against interest rate risk. For residential mortgage loans, this filtering system allows the independence of the financing policy of Compagnie de Financement Foncier from commercial policy of Cr\u00e9dit Foncier de France and other grantors. Some eligible loans may be rejected by Compagnie de Financement Foncier and would be eventually bought years later (2 to 4 years) if and only if no payment incident was observed during the period between.<\/p>\n\n<h3 style=\"text-align: left;\">Profitability of the activity<\/h3>\n<p>In this business model, Compagnie de Financement Foncier assures the recurrent profitability of its activity: the market price of the assets bought by Compagnie de Financement Foncier takes into account the level of the interest rates, the loss and default probabilities, the credit management fees and define the parameters of profitability.<\/p>\n<p>Thanks to these management rules, the rating agencies assign a quality rating to Compagnie de Financement Foncier&#8217;s obligations fonci\u00e8res (AAA\/Aaa\/AAA). The issuer can thus collect resources on the markets at the best conditions. Cr\u00e9dit Foncier and Groupe BPCE improve their market share on mortgage and public sector loans.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Our assets satisfy law\u2019s criteria Eligible assets are defined by law The Savings and Financial Security Act of June 25, 1999 defines the conditions upon which the\u00a0soci\u00e9t\u00e9s de cr\u00e9dit foncier\u00a0are authorised to grant or\u00a0to acquire (article L.513-2): secured loans (article L.513-3 MFC); exposures to or guaranteed by public authorities (articles L.513-3\u00a0to L.513-7\u00a0MFC); tranches and debt [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":109,"parent":0,"menu_order":0,"comment_status":"closed","ping_status":"closed","template":"","meta":{"_acf_changed":false,"footnotes":""},"acf":[],"_links":{"self":[{"href":"https:\/\/foncier.fr\/en\/wp-json\/wp\/v2\/pages\/558"}],"collection":[{"href":"https:\/\/foncier.fr\/en\/wp-json\/wp\/v2\/pages"}],"about":[{"href":"https:\/\/foncier.fr\/en\/wp-json\/wp\/v2\/types\/page"}],"author":[{"embeddable":true,"href":"https:\/\/foncier.fr\/en\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/foncier.fr\/en\/wp-json\/wp\/v2\/comments?post=558"}],"version-history":[{"count":0,"href":"https:\/\/foncier.fr\/en\/wp-json\/wp\/v2\/pages\/558\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/foncier.fr\/en\/wp-json\/wp\/v2\/media\/109"}],"wp:attachment":[{"href":"https:\/\/foncier.fr\/en\/wp-json\/wp\/v2\/media?parent=558"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}