Scope assigns an Issuer Rating of AA- to Crédit Foncier de France (‘CFF’) with a Stable Outlook, and an identical rating and outlook to its key issuing subsidiary, Compagnie de Financement Foncier (‘CoFF’). Both reflect the credit quality of CFF’s parent, BPCE SA (‘BPCE’) . CFF and CoFF carry the status of affiliates within the Group.

BPCE SA is the central body of the two large French banking groups, the Banque Populaire (BP) – cooperative banks – and Caisses d’Epargne (CdE) – savings banks. CFF’s subsidiary CoFF’s sole purpose is to refinance the public-sector lending of the BPCE group, by issuing covered bonds (obligations foncières).

Beginning in 2019 lending that previously flowed through CFF has been conducted by other entities within Groupe BPCE, to create efficiency savings. CFF continues to manage its existing loans. CFF’s balance sheet is expected to shrink gradually as existing loans roll off.

As affiliates CFF and CoFF both benefit from an internal guarantee and solidarity within Groupe BPCE. BPCE SA must guarantee the liquidity and solvency of all its affiliates. As a shareholder BPCE is obliged to draw on its own capital resources. Beyond this it would use its own mutual guarantee fund, and subsequently could draw upon the BP and CdE networks’ guarantee funds. The three funds have nearly EUR 1.1bn of funds available for immediate distribution (as of 31 December 2019). If all these sources were to be exhausted, additional sums would be requested from all member banks of the BP and CdE networks. Groupe BPCE’s aggregated Tier 1 capital may be used to cover financial failings of any affiliate.

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