Instruction No. 2022-I-04 of March 9, 2022, on the publication by land credit companies and housing finance companies of information relating to the quality of financed assets and their outstanding amounts

PRUDENTIAL CONTROL AND RESOLUTION AUTHORITY

Instruction No. 2022-I-04 relating to the publication by land credit companies and housing finance companies of information relating to the quality of financed assets and, respectively, to their outstanding amounts of land bonds and housing finance bonds

The Prudential Control and Resolution Authority, Having regard to the Monetary and Financial Code, in particular Articles L. 513-1 to L. 513-33 as well as L. 612-24 and R. 515-2 to R. 515-17; Having regard to Regulation No. 99-10 of July 9, 1999, as amended, of the Banking and Financial Regulation Committee relating to land credit companies and housing finance companies; Having regard to Instruction No. 2011-I-07 of June 15, 2011, relating to the publication by land credit companies and housing finance companies of information relating to the quality of financed assets; Having regard to the opinion of the Prudential Affairs Consultative Committee of February 25, 2022, DECIDES

Article 1: In application of Article 13 of Regulation No. 99-10 of July 9, 1999, land credit companies and housing finance companies shall send to the Prudential Control and Resolution Authority a report containing information relating to the quality of financed assets recorded on the balance sheet or received as collateral in application of Articles L. 211-36 to L. 211-40, Articles L. 313-23 to L. 313-35, and Articles L. 313-42 to L. 313-49-1 of the Monetary and Financial Code, excluding securities, exposures, and deposits that are sufficiently safe and liquid (as defined by Article R. 513-6 of the Monetary and Financial Code), and, respectively, to their outstanding amounts of land bonds and housing finance bonds. This report shall include, in particular, the following points, established based on data available at the close of each preceding financial year:

I. Secured Loans

1. Breakdown of secured loan outstanding amounts, within the meaning of Articles L. 513-3, L. 513-4, L. 513-6, and L. 513-7 of the Monetary and Financial Code, by category of claim, by type of counterparty, and by type of collateral according to the indications in the Annex. The outstanding amount of each category of claims must be broken down according to the type of counterparty. For each type of counterparty within each category of claims, the outstanding amounts are broken down according to the type of collateral or, where applicable, the combination of collateral types. Furthermore, for each category of claims, the gross amount of unpaid claims, doubtful claims, and provisions allocated to them shall be specified, as well as the valuation method for loans or exposures and collateral.

2. Breakdown of outstanding amounts of loans secured by a mortgage on residential real estate, outstanding amounts of loans secured by a mortgage on commercial real estate, and outstanding amounts of loans secured by a guarantee issued by a credit institution, a financing company, or an insurance company, based on their eligibility ratio for refinancing through privileged resources, which may be either the outstanding capital at the close of the financial year or the product of the ratio defined in Articles R. 313-20 and R. 513-1 of the Monetary and Financial Code and the value of the property given as collateral for loans secured by a mortgage, or the value of the financed property for loans secured by a guarantee, reviewed in accordance with Article 3 of Regulation No. 99-10 of July 9, 1999. The valuation method for loans or exposures and collateral shall also be specified.

3. Breakdown of the outstanding amounts of the three categories of loans mentioned in 2 above based on the year the loan contract was concluded. The number of loans concerned for each year shall be specified.

4. Breakdown of the outstanding amounts of the three categories of loans mentioned in 2 above based on their remaining maturity, rounded to the nearest whole number of years. The number of loans concerned for each maturity shall be specified.

5. Breakdown of the outstanding amounts of the three categories of loans mentioned in 2 above according to the location of the properties provided as collateral by country.

6. Breakdown of the outstanding amounts of guaranteed loans based on the weighting attributed to them under the ratio for covering privileged resources with financed assets mentioned in Article R. 513-8 of the Monetary and Financial Code and defined by Article 9 of Regulation No. 99-10 of July 9, 1999, with, where applicable for housing finance companies, a distinction according to whether the guaranteeing entity falls within the consolidation scope within the meaning of Article L. 233-16 of the Commercial Code.

7. Breakdown of the outstanding amounts of loans mobilized by promissory notes governed by Articles L. 313-42 to L. 313-49-1 of the Monetary and Financial Code according to the criteria mentioned in 1) to 5).

II. Exposure to Public Entities Breakdown of outstanding amounts of direct exposures to public entities, on the one hand, and exposures guaranteed by them, on the other hand, by country, according to the nature of the public entity (state administrations, others), the nature of the exposure when the latter relates to a partnership contract or a contract mentioned in Article L. 6148-4 of the Public Health Code, and its rating established by an external credit rating agency recognized by the Prudential Control and Resolution Authority in accordance with Article L. 511-44 of the Monetary and Financial Code, when such rating is necessary. For these claims, the gross amount of unpaid claims, doubtful claims, and provisions allocated to them shall be specified.

Breakdown of outstanding amounts of exposures based on their remaining maturity rounded to the nearest whole number of years. The number of exposures concerned for each maturity shall be specified.

III. Other Exposures Breakdown by nature of securities and remaining maturity:

• Securities, exposures, and deposits owed by credit institutions or investment firms benefiting from the first, second, or third credit quality tier established by an external credit rating agency recognized by the Prudential Control and Resolution Authority in application of the provisions of Article L. 511-44 of the Monetary and Financial Code or guaranteed by credit institutions or investment firms of the same credit quality tier; breakdown by remaining maturity;
• Claims with a remaining maturity of less than 100 days and derivative financial instruments on credit institutions or investment firms established in a Member State of the European Union or a party to the Agreement on the European Economic Area when they benefit from the third-best credit quality tier established by an external credit rating agency recognized by the Prudential Control and Resolution Authority in application of the provisions of Article L. 511-44 of the Monetary and Financial Code or guaranteed by credit institutions or investment firms of the same credit quality tier;
• For housing finance companies, debt securities issued or fully guaranteed by one of the public entities mentioned in I of Article L. 513-4 of the Monetary and Financial Code; breakdown by remaining maturity.

Amount of securities, sums, and values received as collateral for hedging operations mentioned in Article L. 513-10 of the Monetary and Financial Code (not taken into account in the limit defined in Article R. 513-7).

IV. Early Repayments Amount and proportion expressed as a percentage of early repayments recorded during the financial year by category of claim, reported to the arithmetic mean of daily outstanding amounts, or the mean of end-of-month outstanding amounts. The choice of one or the other indicator must be specified. When the refinanced assets are received as collateral in application of Articles L. 211-36 to L. 211-40-1, Articles L. 313-23 to L. 313-35, and Articles L. 313-42 to L. 313-49-1 of the Monetary and Financial Code, only the early repayment rate calculated on the pool of mobilizable loans shall be published.

V. List of International Securities Identification Numbers (ISIN) A list of International Securities Identification Numbers (ISIN) must be provided for all issuances of land bonds and housing finance bonds, if such ISIN codes have been assigned.

VI. Exposures to Market, Credit, and Liquidity Risks Information on market risk, including exchange rate risk, credit risk, and liquidity risk in detail. For interest rate risk, this implies, in particular, the level and sensitivity of the interest rate position, calculated on March 31, June 30, September 30, and December 31 of the preceding financial year. Indications will also be given on the methodology for measuring the interest rate position and on the hedging policy.

VII. Coverage of Liquidity Needs Information on the 180-day liquidity need and the terms of coverage calculated on March 31, June 30, September 30, and December 31 of the preceding financial year. These information systematically distinguish principal from interest and mention whether the furthest maturity date was retained for one or more instruments with extendable maturity.

VIII. Maturity Structure A table detailing information on the maturity structure of financial assets and land bonds and housing finance bonds respectively, including on maturity extension triggers, where applicable. This table must specify at least the triggers, the initial maturity, the duration of the extendable maturity, information on previous or non-previous use of the trigger, and the consequences on the characteristics of land bonds and housing finance bonds in case of maturity extension.

IX. Level of Coverage of Privileged Resources Information on the last certified level of legal coverage within the meaning of Article R. 513-8 of the Monetary and Financial Code or required contractually or voluntarily.

Article 2: This report is prepared quarterly based on data available on March 31, June 30, September 30, and December 31 of each year. It is transmitted to the Prudential Control and Resolution Authority within forty-five days following the end of each quarter, dated, and signed by one of the responsible executives or by persons regularly accredited with the General Secretariat of the Prudential Control and Resolution Authority.

Article 3: In application of Article 13 bis of Regulation No. 99-10 of the Banking and Financial Regulation Committee, land credit companies and housing finance companies shall publish, within forty-five days following the end of each quarter, in the Bulletin of Mandatory Legal Announcements, in any newspaper authorized to receive legal announcements, or on their website, the information relating to the quality and duration of their financed assets as specified in Article 1 of this Instruction and established based on data available on March 31, June 30, September 30, and December 31 of each year.

Article 4: Instruction No. 2011-I-07 of June 15, 2011, relating to the publication by land credit companies and housing finance companies of information relating to the quality of financed assets is repealed. References to Instruction No. 2000-04 modified by Instruction No. 2008-06 and to Instruction No. 2011-I-07 repealed, which appear in other Instructions, shall be understood as references to this Instruction.

Article 5: This Instruction shall enter into application on July 8, 2022.

Paris, March 9, 2022 The Designated President, Denis BEAU