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Questions Obligations à l'Habitat - OH
I. STRUCTURE OF THE ISSUER
1. Who is the issuer?
  • Specialized credit institution
(1) Comments: Société de Financement de l'Habitat
2. Does the bondholder have recourse to the credit institution?
  • Yes, direct
3. Who owns the cover assets?
  • Credit institution, but pledged to the issuer (with transfer to the issuer upon trigger event)
(2) Comments: Article L. 515-19 provides a security to the benefit of the bondholders.
4. Is the issuer the originator of the assets?
  • No
(3) Comments: Art. L.515-35
II. FRAMEWORK
1. Are the bonds governed by a special covered bond Legislation?
  • Yes
(4) Comments: Article L. 515-34 and seq. of the French Monetary and Financial code.
2. What is the legal framework for bankruptcy of the issuer of covered bonds?
  • General insolvency law
  • Specific legal framework superseding the general insolvency law
(5) Comments: Article L. 515-27 of the French Monetary and Financial code excluding any extention of insolvency procedure of the parent company of the issuer.
III. COVER ASSETS
1. What types of assets may be included in cover pools?
  • Mortgage loans (Mortgage loans for the purpose of this question are taken to include guaranteed real-estate loans.)
  • Group originated Senior MBS
  • Senior MBS issued by third parties
2. What is the geographical scope for public sector assets?
  • Other
(6) Comments: Not applicable.
3. What is the geographical scope for mortgage assets?
  • Domestic
  • EEA
  • Other
(7) Comments: Countries with the best possible rating with one of the rating agencies recognised by the French banking supervisor. In practise, SFHs have solely domestic loans for now.
4. Are regular covered bond specific disclosure requirements to the public mandatory?
  • Yes
(8) Global comments for this chapter:Quarterly publication on the cover pool.
IV. VALUATION OF THE MORTGAGE COVER POOL & LTV CRITERIA
1. LTV is calculated using which valuation?[4]
  • Market value
2. Are there any special LTV limits used solely for calculating collateralisation rates for the cover pool (if yes, specify)?
  • Residential      
    80 %
(9) Comments: Only loan amounts up to 80% LTV are taken into account in the asset test.
3. Do bondholders get the benefit of that portion of the loan which exceeds the LTV cap?
  • Yes
4a. Is there an LTV cap which makes the entire loan ineligible to be put in the cover pool (if yes, specify)?
  • No
(10) Comments: Only loan amounts up to 80% LTV are taken into account in the asset test.
4b. Is there an LTV cap which would require a loan to be removed from the cover pool?
  • No
(11) Comments: Only loan amounts up to 80% LTV are taken into account in the asset test.
5. Is there any additional LTV limit on a portfolio basis?
  • No
V. ASSET-LIABILITY GUIDELINES
. Exposure to market risk
1. Is exposure to market risk (e.g. interest rate, currency risks) required to be mitigated by law or contract?
  • Yes
2. What is the primary method for the mitigation of market risk?
  • Use of derivative hedge instruments
3. If the answer to the above question on market risk mitigation is “Use of derivative hedge instruments”, please specify whether those instruments are entered into:
  • By the time of issue of covered bonds or entry of asset in the cover pool
4. What type of coverage test is applied?
  • Nominal cover
5. What is the frequency of coverage calculations?
  • Monthly
6. What types of stress scenarios are applied?
  • Dynamic
7. What is the frequency of stress test calculations?
  • Monthly
. Exposure to liquidity risk
8. Is exposure to liquidity risk required to be mitigated by law or contract?
  • Yes
9. What is the primary method for the mitigation of liquidity risk on interest payments?
  • Contractual arrangements, e.g. a requirement to establish a reserve fund
10. What is the primary method for the mitigation of liquidity risk on principal payments?
  • Contractual arrangements, e.g. maturity extension or prematurity test
11. Is there any grace period in case of a breach of liquidity risk mitigants?
  • No
12. What is the consequence of not fixing a breach of liquidity risk mitigants?
  • Programme freeze (neither sale of assets nor new issuance allowed)
  • Event of default of the issuer
. Monitoring of exposures to market and liquidity risk
13. Who monitors the maintenance of coverage tests?
  • Supervisory authority
  • Rating agency
  • Trustee/cover pool monitor
14. Are there any regular public reporting requirements for market and liquidity risk?
  • Yes
. Overcollateralisation
15. Is mandatory minimum overcollateralisation required?
  • By legislation/regulation
16. What is the level of minimum mandatory overcollateralisation?

  • 5 %
(12) Comments: 5% is the minimum level required by the law, and 8,1 % in the documentation.
17. If mandatory overcollateralisation is required, are the amounts above the minimum OC level protected?
  • Yes
18. Is there any grace period in case of a breach of the coverage test?
  • No
19. What is the consequence of not fixing a breach of the coverage test?
  • Programme freeze (neither sale of assets nor new issuance allowed)
  • Event of default of the issuer
VI. COVER POOL MONITOR & BANKING SUPERVISION
1. Is a special license required for the issuing of covered bonds?
  • Yes, but no additional requirements
2. Are there special reporting duties of the covered bond issuer to the supervision authority concerning covered bonds and the cover pool, which go beyond the regular banking supervision?
  • Periodic reporting required
  • Reporting on demand for special occasions
3. What is the role of the banking supervision regarding covered bonds?
  • To check whether eligibility criteria are fulfilled and documented
  • Checking quality of cover assets (real estate valuations, etc)
  • Monitoring of exposure to market risk and liquidity risk
  • Evaluation of operational risk
  • To check minimum mandatory overcollateralisation requirements
(13) Comments: Done by the specific controller.
4. Is there a special role of banking supervision in crisis regarding covered bonds?
  • Safeguarding ongoing management of the cover pool directly or via a special administrator
  • Involvement in transfer of cover assets and covered bonds to another credit institution
5. Is there a cover pool monitor independent from the issuer?
  • Yes
(14) Comments: There is an Asset Monitor and a specific controller.
6. If there is an independent cover pool monitor, what are its duties?
  • Performing audits of the cover pool
  • Reporting duties to the supervision authority
  • Verification of coverage tests
(15) Comments: There is an Asset Montor and a specific controller who gives a sepcial authorization for any issue superior to 500 mio euros.
VII. SEGREGATION OF ASSETS & BANKRUPTCY REMOTENESS OF COVERED BONDS
1. Do covered bonds automatically accelerate when the credit institution goes insolvent?
  • No
2. What is the cover pool?
  • All qualifying assets
3. How are the covered bondholders protected against claims from other creditors in case of insolvency of the issuer?
  • Preferential claim by law
  • Specific cover pool administration
4. Is there recourse to the credit institution’s insolvency estate upon a cover pool default?
  • Yes, senior to unsecured creditors
5. Are there provisions that require derivatives to continue in case of insolvency of the credit institution?
  • Yes
6. If derivatives are permitted in the cover pool, what is their ranking?
  • Pari passu to covered bond holders
VIII. RISK WEIGHTING & COMPLIANCE WITH EUROPEAN LEGISLATION
1. Does the covered bond fulfil the criteria of UCITS 52(4)?
  • Yes
2. For further information regarding the compliance to the criteria of Article 129 of the Capital Requirements Regulation (CRR), please see the following links: http://ecbc.hypo.org/Content/default.asp?PageID=504#position https://www.coveredbondlabel.com
3. Are listed covered bonds eligible in repo transactions with the national central bank?
  • Yes
4. Are there any special investment regulations regarding covered bonds?
  • Yes
IX. ADDITIONAL INFORMATION
1. Link to National Association representing covered bond interests
  • Association
2. Link to national regulators and supervisors
3. Fact Book Country Chapter
  • Chapter
 
4. Hypostat Country Chapter
  • Chapter
 

Comments for your selection

  • 1: Société de Financement de l'Habitat
  • 2: Article L. 515-19 provides a security to the benefit of the bondholders.
  • 3: Art. L.515-35
  • 4: Article L. 515-34 and seq. of the French Monetary and Financial code.
  • 5: Article L. 515-27 of the French Monetary and Financial code excluding any extention of insolvency procedure of the parent company of the issuer.
  • 6: Not applicable.
  • 7: Countries with the best possible rating with one of the rating agencies recognised by the French banking supervisor. In practise, SFHs have solely domestic loans for now.
  • 8: Quarterly publication on the cover pool.
  • 9: Only loan amounts up to 80% LTV are taken into account in the asset test.
  • 10: Only loan amounts up to 80% LTV are taken into account in the asset test.
  • 11: Only loan amounts up to 80% LTV are taken into account in the asset test.
  • 12: 5% is the minimum level required by the law, and 8,1 % in the documentation.
  • 13: Done by the specific controller.
  • 14: There is an Asset Monitor and a specific controller.
  • 15: There is an Asset Montor and a specific controller who gives a sepcial authorization for any issue superior to 500 mio euros.