GE SCF, a société de credit foncier (special purpose company) 99.9% owned by GE Money Bank that specializes in lending to private individuals, has successfully completed the initial issue of its program of €5 billion in covered bonds backed by high-quality mortgage assets. This initial issue is for €1 billion maturing in 5 years, was issued at 105 basis points over mid-swap and comes with a 3.75% coupon. GE SCF intends to conduct new issues in the future and become a regular issuer on the market.
The US Group GE has selected its French subsidiary GE Money Bank for its entry into the covered bond market. "GE wanted to rely on the recognized French legislative framework for covered bonds and use the high-quality mortgage assets of GE Money Bank," explained Antoine Boublil, CFO of GE Money Bank. "In this context we have created a simple structure that offers maximum transparency in response to investors' demand."
GE thereby becomes the first foreign group to launch a program of covered bonds in France, strengthening the position of its subsidiary GE Money Bank in the French market. Boublil said, "This transaction enables us to diversify the funding of our home loans assets and to improve our liquidity."
GE SCF is a lending institution governed by French law. It was accredited by the CECEI as a société de crédit foncier - in July 2009, thereby becoming the 6th active issuer in the covered bond market in France. The transaction was structured by GE Money Bank, GE Capital Markets and Corporate Treasury, with BNP Paribas as arranger. Gide Loyrette Nouel was the legal counsel for the transaction.
The issue was placed last July 7 by a bank syndicate consisting of BNP Paribas, Deutsche Bank and Société Générale and was co-managed by Natexis, Calyon and HSBC. Orders totaled € 1.930 billion with the participation of more than 80 accounts.
About GE Money Bank France
A subsidiary of GE Capital Corp. (part of the General Electric group of companies), GE Money Bank is the first single-source French bank for all the credit needs of private individuals: mortgages, automobile and motorcycle loans, consumer loans and credit consolidation. For more information visit www.gemoneybank.fr
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