Département de l'essonne Euro 1,000,000,000 Euro Medium Term Note Programme

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1 THIS DOCUMENT IS A FREE TRANSLATION OF THE FRENCH LANGUAGE PROSPECTUS DE BASE DATED THE DATE OF THIS DOCUMENT PREPARED BY DEPARTEMENT DE L'ESSONNE. IN THE EVENT OF ANY AMBIGUITY OR CONFLICT BETWEEN CORRESPONDING STATEMENTS OR OTHER ITEMS CONTAINED IN THESE DOCUMENTS, THE RELEVANT STATEMENTS OR ITEMS OF THE FRENCH LANGUAGE PROSPECTUS DE BASE SHALL PREVAIL. BASE PROSPECTUS dated 4 July 2014 Département de l'essonne Euro 1,000,000,000 Euro Medium Term Note Programme Under the Euro Medium Term Note Programme (the "Programme") described in this base prospectus (the "Base Prospectus"), the Département de l'essonne (the "Issuer" or "Département de l'essonne"), subject to compliance with all relevant laws, regulations and directives, may from time to time issue Euro Medium Term Notes (the Notes ). The aggregate nominal amount of Notes outstanding will not at any time exceed Euro 1,000,000,000 (or the equivalent in other currencies). This Base Prospectus supersedes and replaces the Base Prospectus dated 26 July Application will be made in certain circumstances for Notes issued under the Programme to be admitted to trading on the regulated market of NYSE Euronext in Paris ("Euronext Paris"). Euronext Paris is a regulated market in the sense of directive 2004/39/EC of 21 April 2004, as amended (a "Regulated Market"). The Notes may also be admitted to trading on another Regulated Market of the European Economic Area (the "EEA") or an unregulated market or not be admitted to trading. The Final Terms (as defined in the chapter "Principal characteristics of the Notes and the principal risks associated with the Notes and the form of which is contained in this Base Prospectus) in respect of the issue of any Notes will specify whether or not such Notes will be admitted to trading and will state, as the case may be, the relevant Regulated Market. The French version of this Base Prospectus has been submitted to the clearance procedures of the Autorité des marchés financiers ("AMF") and has been approved by the AMF under visa n 14 granted on 4 July The nominal amount of the Notes will be set forth in the relevant Final Terms save that the minimum denomination of each Note admitted to trading on a Regulated Market under circumstances which require the publication of a Base Prospectus under the Prospectus Directive will be 1,000 or, if the Notes are denominated in a currency other than euro, the equivalent amount in such currency at the issue date or such other higher amount as may be allowed or required from time to time by the relevant central bank (or equivalent body) or any laws or regulations applicable to the relevant specified currency. Notes may be issued either in dematerialised form ("Dematerialised Notes") or in materialised form ("Materialised Notes"), as more fully described in this Base Prospectus. Dematerialised Notes will at all times be in book entry form in compliance with Article L of the French Code monétaire et financier. No physical documents of title will be issued in respect of the Dematerialised Notes. Dematerialised Notes may, at the option of the Issuer, be issued (a) in bearer dematerialised form (au porteur) inscribed as from the issue date in the books of Euroclear France ( Euroclear France ) (acting as central depositary as defined in chapter "Terms and Conditions of the Notes Definitions, Interest and other Calculations) which shall credit the accounts of Account Holders (as defined in the chapter Terms and Conditions of the Notes - Form, Denomination, Title and Redenomination ) including Euroclear Bank S.A./ N.V. ( Euroclear ) and the depositary bank for Clearstream Banking, société anonyme ( Clearstream, Luxembourg ) or (b) in registered dematerialised form (au nominatif) and, in such latter case, at the option of the relevant Noteholder (as defined in Condition 1(c)(iv)) of the Terms and Conditions of the Notes, in either fully registered form (nominatif pur), in which case they will be inscribed either with the Issuer or with a registration agent (designated in the relevant Final Terms) for the Issuer, or in administered registered form (nominatif administré) in which case they will be inscribed in the accounts of the Account Holders designated by the relevant Noteholders. Materialised Notes will be in bearer materialised form only and may only be issued outside France. A temporary global certificate in bearer form without interest coupons attached (a Temporary Global Certificate ) will initially be issued in connection with Materialised Notes. Such Temporary Global Certificate will be exchanged for Definitive Materialised Notes in bearer form ( Definitive Materialised Notes ) with, where applicable, coupons for interest attached, on or after a date expected to be on or about the 40th day after the issue date of the Notes (subject to postponement as described in Temporary Global Certificates issued in respect of Materialised Notes ) upon certification as to non-u.s. beneficial ownership (U.S. Persons) in accordance with U.S. Treasury regulations, as more fully described in this Base Prospectus. Temporary Global Certificates will (a) in the case of a Tranche (as defined in the chapter "General Characteristics of the Programme") intended to be cleared through Euroclear and/or Clearstream, Luxembourg, be deposited on the issue date with a common depositary on behalf of Euroclear and/or Clearstream, Luxembourg and (b) in the case of a Tranche intended to be cleared through a clearing system other than, or in addition to, Euroclear and/or Clearstream, Luxembourg or delivered outside a clearing system, be deposited as agreed between the Issuer and the relevant Dealer (as defined below). The Programme has been rated AA by Standard & Poor's Credit Market Services France S.A.S. and AA by Fitch Ratings France S.A.S. As at the date of the Base Prospectus, each of such credit rating agencies is established in the European Union and is registered under Regulation (EC) No 1060/2009 of the European Parliament and of the Council of 16 September 2009 on credit rating agencies as amended (the "CRA Regulation") and is included in the list of credit rating agencies published by the European Securities and Market Authority on its website ( in accordance with the CRA Regulation. Notes issued under the Programme may be rated. When an issue of Notes is rated, such rating will not necessarily be the same as the rating assigned under the Programme. The rating of Notes, if any, will be disclosed in the Final Terms. A rating is not a recommendation to buy, sell or hold securities and may be subject to suspension, change or withdrawal at any time by the assigning rating agency. This Base Prospectus is published (a) on the websites of the AMF ( and the Issuer ( (b) available for copy, without charges, during normal business days and hours, any business day of the week, at the registered office of the Issuer and at the specified offices of any Paying Agent set out at the end of this Base Prospectus. Arranger HSBC Dealers BNP PARIBAS Deutsche Bank AG, London Branch Goldman Sachs International HSBC NATIXIS Société Générale Corporate & Investment Banking UBS Investment Bank The date of this Base Prospectus is 4 July

2 This Base Prospectus (as well as any supplement relating thereto) constitutes a base prospectus pursuant to article 5.4 of Prospectus Directive (as defined below) entailing all information which is necessary to enable investors to make an informed assessment of the assets, the activity, the financial position, the profits and prospects of the Issuer, as well as of the rights attaching to the Notes, as well as information required by annexes IV, V, XVI, XX, XXII, and XXX of the European Regulation 809/2004/EC, as amended, including, by the provisions of the Commission delegated regulation (EU) n 486/2012 of 30 March 2012 and Commission delegated regulation (EU) n 862/2012 of 4 June 2012 (the "European Regulation"). Each Tranche (as defined in chapter General Description of the Programme ) of Notes will be issued in accordance with the provisions set out in chapter "Terms and Conditions of the Notes" of this Base Prospectus, as supplemented by the provisions of the relevant Final Terms agreed between the Issuer and the relevant Dealers (as defined in chapter "General Description of the Programme") upon issue of such Tranche. The Issuer, having taken all reasonable enquiries to ensure that such is the case, confirms that all the information contained in this Base Prospectus is, to the best of its knowledge, in accordance with the facts and contains no omission likely to affect its import. The Issuer accepts responsibility accordingly. No person has been authorised to give any information or to make any representation other than those contained in this Base Prospectus in connection with the issue or sale of the Notes and, if given or made, such information or representation must under no circumstances be relied upon as having been authorised by the Issuer or the Arranger or the Dealers (each as defined in the chapter General Description of the Programme below). Neither the delivery of this Base Prospectus nor any sale made in connection herewith shall, under any circumstances, create any implication that there has been no change in the general affairs of the Issuer since the date hereof or the date upon which this Base Prospectus has been most recently supplemented or that there has been no adverse change in the financial position of the Issuer since the date hereof or the date upon which this Base Prospectus has been most recently supplemented or that any other information supplied in connection with the Programme is correct as of any time subsequent to the date on which it is supplied or, if different, the date indicated in the document containing the same. The distribution of this Base Prospectus and the offering or sale of the Notes in certain jurisdictions may be restricted by law. Persons into whose possession this Base Prospectus comes are required by the Issuer, the Dealers and the Arranger to inform themselves about and to observe any such restriction. The Notes have not been and will not be registered under the United States Securities Act of 1933, as amended (the Securities Act ) or with any securities regulatory authority of any state or other jurisdiction of the United States and the Notes may include Materialised Notes in bearer form that are subject to U.S. tax law requirements. Subject to certain exceptions, Notes may not be offered, sold or, in the case of Materialised Notes in bearer form, delivered within the United States. For a description of certain restrictions on offers and sales of Notes and on distribution of this Base Prospectus, see Subscription and Sale. Subject to certain exceptions, Notes may not be offered, sold or, in the case of Materialised Notes in bearer form, delivered, within the United States or to or for the account or benefit of U.S. persons as defined in Regulation S under the Securities Act (Regulation S) or, in the case of Materialised Notes in bearer form, the U.S. Internal Revenue Code of 1986, as amended (the U.S Internal Revenue Code of 1986). Notes will be offered and sold outside the United States to non U.S. persons in accordance with Regulation S. This Base Prospectus does not constitute an offer of, or an invitation by or on behalf of the Issuer or the Dealers or the Arranger to subscribe for, or purchase, any Notes. The Arranger and the Dealers have not separately verified the information contained in this Base Prospectus. None of the Dealers or the Arranger makes any representation, express or implied, or accepts any responsibility, with respect to the accuracy or completeness of any of the information in this Base Prospectus. Neither this Base Prospectus nor any other financial statements are intended to provide the basis of any credit or other evaluation and should not be considered as a recommendation by any of the Issuer, the Arranger or the Dealers that any recipient of this Base Prospectus or any other financial statements should purchase the Notes. Each potential purchaser of Notes should determine for itself the relevance of the information contained in this Base Prospectus and its purchase of Notes should be based upon such investigation as it deems necessary. None of the Dealers or the Arranger undertakes to review the financial condition or affairs of the Issuer during the life of the arrangements contemplated by this Base Prospectus nor to advise any investor or potential investor in the Notes of any information coming to the attention of any of the Dealers or the Arranger. For the purposes of this Base Prospectus, the expression "Prospectus Directive" means Directive 2003/71/EC of the European Parliament and of the Council on the prospectus to be published when securities are offered to the public or admitted to trading, as amended by Directive 2010/73/EU, and includes any relevant implementing measure in the Member State of the European Economic Area which has implemented the Prospectus Directive (each, a "Relevant Member State"). In connection with any Tranche (as defined in General Description of the Programme ), one of the Dealers may in accordance with applicable laws and regulations act as a Stabilising Manager (the Stabilising Manager ). The identity of the Stabilising Manager will be disclosed in the relevant Final Terms. References in the next paragraph to the issue are to each Tranche in relation to which a Stabilisation Agent is appointed. For the purpose of any issue, the Stabilising Manager (or any person acting on behalf of the Stabilising Manager) may over-allot Notes, or effect transactions with a view to maintaining the market price of the Notes at a level higher than that which might otherwise prevail. - 2-

3 However, there is no assurance that the Stabilising Manager (or persons acting on behalf of the Stabilising Manager) will undertake stabilisation action. Any stabilisation action may begin on or after the date on which adequate public disclosure of the final terms of the offer is made and, if begun, may be ended at any time, but it must end no later than the earlier of 30 days after the issue date and 60 days after the date of the allotment of Notes. Any stabilisation action will be carried out in accordance with all applicable laws and regulations. In this Base Prospectus, unless otherwise specified or the context otherwise requires, references to, Euro, EUR or euro are to the lawful currency of the Member States of the European Union that adopt the single currency introduced in accordance with the Treaty establishing the European Community, references to, pounds sterling, GBP and Sterling are to the lawful currency of the United Kingdom, references to $, USD and U.S. Dollars are to the lawful currency of the United States of America, references to, JPY, Japanese yen and Yen are to the lawful currency of Japan and references to Swiss francs or CHF are to the lawful currency of the Helvetic Confederation. RETAIL CASCADES In the context of any offer of Notes in France (the "Public Offer Jurisdiction") that is not within an exemption from the requirement to publish a prospectus under the Prospectus Directive, as amended, (a "Public Offer"), the Issuer consents to the use of the Prospectus in connection with a Public Offer of any Notes during the offer period specified in the relevant Final Terms (the "Offer Period") and in the Public Offer Jurisdiction specified in the relevant Final Terms by: (1) subject to conditions set out in the relevant Final Terms, any financial intermediary designated in such Final Terms; or (2) if so specified in the relevant Final Terms, any financial intermediary which satisfies the following conditions: (a) acts in accordance with all applicable laws, rules, regulations and guidance of any applicable regulatory bodies (the "Rules"), from time to time including, without limitation and in each case, Rules relating to both the appropriateness or suitability of any investment in the Notes by any person and disclosure to any potential investor; (b) complies with the restrictions set out under "Subscription and Sale" in this Base Prospectus which would apply as if it were a Dealer; (c) ensures that any fee (and any commissions or benefits of any kind) received or paid by that financial intermediary in relation to the offer or sale of the Notes is fully and clearly disclosed to investors or potential investors; (d) holds all licences, consents, approvals and permissions required in connection with solicitation of interest in, or offers or sales of, the Notes under the Rules; (e) retains investor identification records for at least the minimum period required under applicable Rules, and shall, if so requested, make such records available to the relevant Dealer(s) and the Issuer or directly to the appropriate authorities with jurisdiction over the Issuer and/or the relevant Dealer(s) in order to enable the Issuer and/or the relevant Dealer(s) to comply with anti-money laundering, anti-bribery and know your client rules applying to the Issuer and/or the relevant Dealer(s); (f) does not, directly or indirectly, cause the Issuer or the relevant Dealer(s) to breach any Rule or any requirement to obtain or make any filing, authorisation or consent in any jurisdiction; and (g) satisfies any further conditions specified in the relevant Final Terms, (in each case an "Authorised Offeror"). For the avoidance of doubt, none of the Dealers or the Issuer shall have any obligation to ensure that an Authorised Offeror complies with applicable laws and regulations and shall therefore have no liability in this respect. The Issuer accepts responsibility, in the Public Offer Jurisdiction specified in the Final Terms, for the content of the Prospectus in relation to any person (an "Investor") in such Public Offer Jurisdiction to whom an offer of any Notes is made by any Authorised Offeror and where the offer is made during the period for which that consent is given. However, neither the Issuer nor any Dealer has any responsibility for any of the actions of any Authorised Offeror, including compliance by an Authorised Offeror with applicable conduct of business rules or other local regulatory requirements or other securities law requirements in relation to such offer. The consent referred to above relates to Offer Periods (if any) occurring within 12 months from the date of the approval of this Base Prospectus by the AMF. In the event the Final Terms designate financial intermediary(ies) to whom the Issuer has given its consent to use the Prospectus during an Offer Period, the Issuer may also give consent to additional Authorised Offerors after the date of the relevant Final Terms and, if it does so, it will publish any new information in relation to such Authorised Offerors who are unknown at the time of the approval of this Base Prospectus or the filing of the relevant Final Terms at ( If the Final Terms specify that any financial intermediary may use the Prospectus during the Offer Period, any such Authorised Officer is required, for the duration of the Offer Period, to publish on its website that it is using the Prospectus for the relevant Public Offer with the consent of the Issuer and in accordance with the conditions attached thereto. An Investor intending to acquire or acquiring any Notes from an Authorised Offeror will do so, and offers and sales of the Notes to an Investor by an Authorised Offeror will be made, in accordance with any terms and other arrangements in place between such Authorised Offeror and such Investor including as to price allocations and settlement arrangements (the "Terms and Conditions of the Public Offer"). The Issuer will not be a party to any such arrangements with Investors (other than Dealers) in connection with the offer or sale of the Notes and, accordingly, the Base Prospectus and any Final Terms will not contain such information. The Terms and Conditions of the Public Offer shall be provided to Investors by that Authorised Offeror at the time of the Public Offer. Neither the Issuer nor any of the Dealers or other Authorised Offerors has any responsibility or liability for such information. - 3-

4 SUPPLEMENTS TO THE BASE PROSPECTUS If at any time after the date of this Base Prospectus a significant new factor, material mistake or inaccuracy relating to information included in this Base Prospectus which is capable of affecting the assessment of any Notes appears or is noticed, a supplement to this Base Prospectus shall be prepared. All supplements to this Base Prospectus will be published on the websites of (i) the AMF ( (ii) the Issuer ( and (iii) any other relevant regulation authority and will be available for consultation and copy, free of charge, at the offices of each Paying Agent set out at the end of this Base Prospectus during normal business hours so long as any of the Notes are outstanding. In accordance with Article 16(2) of the Prospectus Directive, in the case of a public offer of Notes pursuant to this Base Prospectus, investors who have already agreed to purchase or subscribe for any such Notes before the supplement to the Base Prospectus is published shall have the right, exercisable within two working days after the publication of the supplement to the Base Prospectus, to withdraw their acceptances, provided that the new factor, mistake or inaccuracy referred to in paragraph 1 above arose before the final closing of the offer to the public and the delivery of the securities. That period may be extended by the Issuer. The final date of the right of withdrawal will be stated in the relevant supplement to the Base Prospectus. - 4-

5 TABLE OF CONTENTS SUMMARY OF THE PROGRAMME... 6 RESPONSIBILITY FOR BASE PROSPECTUS RISK FACTORS DOCUMENTS INCORPORATED BY REFERENCE GENERAL DESCRIPTION OF THE PROGRAMME TERMS AND CONDITIONS OF THE NOTES TEMPORARY GLOBAL CERTIFICATES ISSUED IN RESPECT OF MATERIALISED NOTES USE OF PROCEEDS DESCRIPTION OF DEPARTEMENT DE L'ESSONNE SUBSCRIPTION AND SALE FORM OF FINAL TERMS GENERAL INFORMATION

6 SUMMARY OF THE PROGRAMME Summaries are made up of disclosure requirements known as "Elements" required by Annex XXII of the Delegated Regulation (EU) n 486/2012 dated 30 March 2012 and the Delegated Regulation (EU) n 862/2012. These elements are numbered in Sections A E (A.1 E.7). This summary contains all the Elements required to be included in a summary for this type of Notes and Issuer. Because some Elements are not required to be addressed, there may be gaps in the numbering sequence of the Elements. Even though an Element may be required to be inserted in the summary because of the type of Notes and Issuer, it is possible that no relevant information can be given regarding this Element. In this case a short description of the Element is included in the summary with the mention of "Not Applicable". This summary is provided for purposes of the issue of Notes with a Denomination of less than Euro 100,000 (or its equivalent in other currencies). Investors in Notes of Denominations equal to or greater than Euro 100,000 should not rely on this summary in any way and the Issuer accepts no liability to such investors regarding this summary. Words and expressions which are defined in the section "Terms and Conditions of the Notes" of this Base Prospectus shall have the same meanings where used in the following summary. Section A Introduction and warnings A.1 Warning: Please note that: this summary should be read as introduction to the Base Prospectus; any decision to invest in the Notes should be based on consideration of the Base Prospectus as a whole by the investor; where a claim relating to the information contained in the Base Prospectus is brought before a court, the plaintiff investor might, under the national legislation of the Member States, have to bear the costs of translating the prospectus before the legal proceedings are initiated; and civil liability attaches only to those persons who have tabled the summary including any translation thereof, but only if the summary is misleading, inaccurate or inconsistent when read together with the other parts of the Base Prospectus or it does not provide, when read together with the other parts of the Base Prospectus, key information in order to aid investors when considering whether to invest in such Notes of a Denomination. A.2 Consent: In the context of any offer of Notes in France (the "Public Offer Jurisdiction") that is not within an exemption from the requirement to publish a prospectus under the Prospectus Directive, as amended, (a "Public Offer"), the Issuer consents to the use of the Prospectus in connection with a Public Offer of any Notes during the offer period specified in the relevant Final Terms (the "Offer Period") and in the Public Offer Jurisdiction specified in the relevant Final Terms by: (1) subject to conditions set out in the relevant Final Terms, any financial intermediary designated in such Final Terms; or (2) if so specified in the relevant Final Terms, any financial intermediary which satisfies the following conditions: (a) acts in accordance with all applicable laws, rules, regulations and guidance of any applicable regulatory bodies (the "Rules"), from time to time including, without limitation and in each case, Rules relating to both the appropriateness or suitability of any investment in the Notes by any person and disclosure to any potential investor; (b) complies with the restrictions set out under "Subscription and Sale" in this Base Prospectus which would apply as if it were a Dealer; (c) ensures that any fee (and any commissions or benefits of any kind) received or paid by that financial intermediary in relation to the offer or sale of the Notes is fully and clearly disclosed to investors or potential investors; (d) holds all licences, consents, approvals and permissions required in connection with solicitation of interest in, or offers or sales of, the Notes under the Rules; (e) retains investor identification records for at least the minimum period required under applicable Rules, and shall, if so requested, make such records available to the relevant Dealer(s) and the Issuer or directly to the appropriate authorities with jurisdiction over the Issuer and/or the relevant Dealer(s) in order to enable the Issuer and/or the relevant Dealer(s) to comply with antimoney laundering, anti-bribery and know your client rules applying to the Issuer and/or the relevant Dealer(s); (f) does not, directly or indirectly, cause the Issuer or the relevant Dealer(s) to breach any Rule or any requirement to obtain or make any filing, authorisation or consent in any jurisdiction; and (g) satisfies any further conditions specified in the relevant Final Terms, (in each case an "Authorised Offeror"). For the avoidance of doubt, none of the Dealers or the Issuer shall have any obligation to ensure that an Authorised Offeror complies with applicable laws and regulations and shall therefore have no liability in this respect. The Issuer accepts responsibility, in the Public Offer Jurisdiction specified in the Final Terms, for the content of the Prospectus in relation to any person (an "Investor") in such Public Offer Jurisdiction to whom an offer of any Notes is made by any Authorised Offeror and where the offer is made during the period for which that consent is given. However, neither the Issuer nor any Dealer has any responsibility for any of the actions of any Authorised Offeror, including compliance by an Authorised Offeror with applicable conduct of business rules or other local regulatory requirements or other securities law requirements in relation to such offer. - 6-

7 The consent referred to above relates to Offer Periods (if any) occurring within 12 months from the date of the approval of this Base Prospectus by the AMF. An Investor intending to acquire or acquiring any Notes from an Authorised Offeror will do so, and offers and sales of the Notes to an Investor by an Authorised Offeror will be made, in accordance with any terms and other arrangements in place between such Authorised Offeror and such Investor including as to price allocations and settlement arrangements (the "Terms and Conditions of the Public Offer"). The Issuer will not be a party to any such arrangements with Investors (other than Dealers) in connection with the offer or sale of the Notes and, accordingly, the Base Prospectus and any Final Terms will not contain such information. The Terms and Conditions of the Public Offer shall be provided to Investors by that Authorised Offeror at the time of the Public Offer. Neither the Issuer nor any of the Dealers or other Authorised Offerors has any responsibility or liability for such information. Section B Issuer B17 Credit Ratings: The Programme has been rated AA by Standard & Poor's Credit Market Services France S.A.S. and AA by Fitch Ratings France S.A.S. As at the date of the Base Prospectus, each of such credit rating agencies is established in the European Union and is registered under Regulation (EC) No 1060/2009 of the European Parliament and of the Council of 16 September 2009 on credit rating agencies as amended (the "CRA Regulation") and is included in the list of credit rating agencies published by the European Securities and Market Authority on its website ( in accordance with the CRA Regulation. When an issue of Notes is rated, such rating will not necessarily be the same as the rating assigned under the Programme. Notes issued under the Programme may be rated or unrated. The rating of Notes, if any, will be disclosed in the Final Terms. A rating is not a recommendation to buy, sell or hold securities and may be subject to suspension, change or withdrawal at any time by the assigning rating agency. B47 Description of the Legal name of the issuer and description of the issuer s position within the national government framework Issuer: The Department of Essonne is one of the eight departments of the Ile -de- France (including Paris ) and is located in the "Great suburb" south of the capital. The Department covers 1820 square km and included as of the last census (1 January 2009) more than 1.2 million inhabitants. The Department of Essonne is the 14 th most populated department in France and the 7 th most populated in the Ile-de-France region. Legal form of the Issuer Like other French departments, the Department of Essonne is a local authority since the great decentralization laws of It is governed in particular by the provisions of the French Code Général des Collectivités Territoriales (including its third party, articles L to L ). The policies of the issuer are made by the deliberative assembly composed of 42 members elected by direct universal suffrage, chaired by the President of the General Council. Recent events relevant to the evaluation of the Issuer s solvency There are no recent events relevant to the evaluation of the Issuer's solvency Description of the issuer s economy including its structure with details of its main sectors The economic structure is closely linked to that of the Ile -de- France region. The commuting are numerous. The economy of the issuer has 437,218 active employees (as of 31/12/2011), 8% of the Ile-de France total employment. It has 39,000 businesses, composed of large national or multinational groups but also a network of small and medium enterprises (SMEs). The economy of the issuer is a diversified and strengthened by a generally more skilled workforce than regional level. The unemployment rate of the department is 7.4%, against 8.6% in the Ile de France and 9.8% in France (4th quarter 2013). Economic activity is mainly based on service sector. Thus, the main sectors employers are: Research / innovation Business services, The education / health / social work Services to individuals, Transport. Employment in the service sector accounts for more than half the workforce and is the main source of growth. - 7-

8 B48 Key facts of public finance and trade information / information for the two fiscal years /significant changes since the end of the last fiscal year: Primary and secondary sectors represent respectively an insignificant portion and 23 % of employment. Public finances situation for the last two fiscal years Key figures CA 2012 accounts CA 2013 accounts Investment income 302,936 M 193,58 M Capital expenditure 424,52 M 297,98 M Operating income M 130,8 M Operating expenditure 995,14 M 1 004,5 M Gross savings 131,22 M 126,3 M Debt from loans as at 31 December 848,49 M 861,23 M The Administrative Budget for 2013 was approved by the departmental Assembly on 30 June Trade information Not applicable; Issuer does not have relevant foreign trade information. Significant changes There has been no significant change in the financial condition of the Issuer since 31 December 2013, date of the end of the administrative accounts for the year Section C - Securities C.1 Type and class of the securities being offered and/or admitted to trading, including any security identification number: Type and class of the Notes The Notes will constitute obligations under Article L of the French Financial Code. Notes will be issued in Series. Each Series may comprise one or more Tranches. The Notes of each Tranche being intended to be fungible, the terms and conditions of each Tranche will be identical to the terms and conditions of other Tranches of the same Series, except for the issue date, the issue price and the amount of the first payment of interests. Notes may be issued either in Dematerialised form or in Materialised form. Dematerialised Notes may, at the option of the Issuer, be issued in bearer dematerialised form or in registered dematerialised form. Materialised Notes will be in bearer materialised form only Identification number of the Notes The Notes identification number (ISIN) will be indicated in the relevant Final Terms for each issue of Notes. C.2 Currencies of the securities issue: Subject to compliance with all relevant laws, regulations and directives, Notes may be issued in euro, U.S. Dollars, Japanese yen, Swiss francs, Sterling and in any other currency agreed between the Issuer and the relevant Dealer(s). C.5 Restriction on the free transferability of the securities: There is no restriction on the free transferability of the Notes. - 8-

9 C.8 The Rights attached to the securities: Ranking The Notes and, if any, the relevant Coupons will constitute direct, unconditional, unsubordinated and (subject to the provisions relating to negative pledge) unsecured obligations of the Issuer and will rank pari passu among themselves and (save for certain obligations required to be preferred by French law) equally with all other present or future unsecured and unsubordinated obligations of the Issuer from time to time outstanding. Negative Pledge So long as any of the Notes or, if applicable, any Coupons relating to them, remains outstanding, the Issuer will not create or permit to subsist any mortgage, lien, charge, pledge or other form of security interest (sûrete réelle) upon any of its assets or revenues, present or future, to secure any present or future indebtedness for borrowed money in the form of, or represented by, bonds (obligations), notes or other securities with a maturity greater than one year and which are for the time being, or are capable of being, admitted to trading on a Regulated Market, unless the Issuer's obligations under the Notes and, if applicable, Coupons are equally and rateably secured therewith. Events of Default The Representative (as defined in Condition 11) acting on behalf of the Masse may, upon written notice by registered mail with recorded delivery (with copy to the Fiscal Agent), given on behalf of the Masse before any default has been cured, cause the Notes to become due and payable, whereupon the Notes shall become immediately due and payable, or if Noteholders were not grouped in a mass, all Notes held by such Noteholder having given written notice thereto, at their Early Redemption Amount together with any accrued interest if any of the following events (each an "Event of Default ) shall occur: (a) the Issuer is in default for more than thirty (30) days on the payment of principal of, or interest on, or any other amount in respect of, any Note (including the payment of any additional amounts in accordance with Condition 8), from the date on which such amounts shall become due and payable; (b) the Issuer is in default in the due performance of any other provision of the Notes and such default shall not have been cured within sixty (60) days after receipt by the Fiscal Agent of written notice of default given by the Representative; (c) (i) any bank or bond indebtedness of the Issuer in excess individually or in aggregate of Euro 70 million (or its equivalent in any other currency) in principal is (are) not paid by the Issuer at its (their) stated maturity or as a result of a default thereunder after the expiry of any applicable grace period or (ii) any guarantee(s) given by the Issuer for bank or bond indebtedness of others in excess individually or in aggregate of Euro 70 million (or its equivalent in any other currency) is (are) not honoured when due and called upon; unless in any such event, the Issuer has disputed in good faith that such indebtedness is due and payable or that such guarantees are due and callable and such dispute has been submitted to a competent court, in which case default in payment shall not constitute an event of default hereunder so long as the dispute shall not have been finally adjudicated; Provided that any event contemplated in (a), (b) or (c) above shall not constitute an Event of Default and the periods, if any, referred to above shall be suspended, in the event that the Issuer notifies the Fiscal Agent before the expiry of the relevant period, if any, of the need, in order to cure such defaults, to adopt a budgetary decision for the payment of unforeseen or additional budget expenses in relation to debt service, until (and including) the date on which such budgetary decision is effective. The Issuer shall notify the Fiscal Agent of the date on which such budgetary decision is effective. The Fiscal Agent shall notify the Noteholders of any notification received from the Issuer thereto. - 9-

10 C.9 Applicable limitations to those rights attached to the securities The applicable limitations to the rights attached to the Notes will be, if any, specified in the relevant Final Terms of each Series. Nominal interest rate Notes may be interest bearing or non-interest bearing. Interest (if any) may accrue at a Fixed Rate and bear the same interest until the maturity date or during a period specified in the relevant Final Terms or at a Floating Rate where the interest may vary for each interest period of the Notes depending on the reference rate specified in the Final Terms. Date from which interest becomes payable and the due dates for interest The date from which interest becomes payable and the due dates for interest for each issue of Notes will be indicated in the relevant Final Terms applicable to the relevant issue of Notes. Description of the underlying on which the rate is based, when such rate is not fixed Not Applicable; interest (if any) will accrue at a Fixed rate, or a Floating Rate not linked to any underlying. Maturity Date and arrangements for the amortisation of the loan, including the repayment procedures Redemption on the Maturity Date Notes will be redeemed at par or at such other Redemption Amount as specified in the relevant Final Terms. Early Redemption Notes may be redeemable prior to maturity subject to the terms of this redemption specified in the relevant Final Terms. Early Redemption for tax reasons Notes will be redeemable for tax reasons at the option of the Issuer prior to maturity subject to the terms of this redemption specified in the relevant Final Terms. Make-whole Redemption at the option of the Issuer Unless otherwise provided in the relevant Final Terms, the Notes may be redeemed at the option of the Issuer in whole (but not in part), at any time prior to their maturity date, at their Make Whole Redemption Amount by the Issuer. Yield The yield of the Notes will be specified in the relevant Final Terms. Representative of debt security holders The Representative of the Noteholders will be appointed in the relevant Final Terms for each issue of Notes. C.10 Explanation on how the value of the investment is affected by the value of the underlying instrument(s) related to the interest payment: Not Applicable; interest (if any) will accrue at a Fixed rate, or a Floating rate. C.11 Admission to Trading of the securities in a regulated market: Application may be made for Notes to be admitted to trading on Euronext Paris and/or any other Regulated Market of the European Economic Area. A Series of Notes may be unlisted. Section D Risks D.2 Key information on the key risks that are specific to the Issuer: Risks relating to the transfer of powers The Issuer is a local authority whose status and responsibilities are dictated by constitutional and legislative provisions. A new draft law, which was presented to the Council of ministers on 18 June 2014, contemplates the transfer of a certain number of departmental powers to the regions on one hand and the local level on the other. These transfers of power could be accompanied by transfers of resources and burdens but the exact extent of the changes and the way in which they will take place remains to be seen. The Issuer is mainly exposed to economic and financial risks. Risks related to assets of the Issuer The various risks related to its assets have been estimated and the General Council has subscribed insurances which provide adequate coverage

11 Financial risks As regard to financial risks, the status of legal entity governed by public law and the legal framework governing local authority's borrowings limits very significantly the insolvency risks. In relation to financial risks, the Ile-de- France Region, as a local authority and pursuant to applicable laws, can freely borrow, and its relationships with lenders are based on private law and the right to enter into contractual agreements. Even if the Issuer has full and entire freedom to manage its financings, the exercise of this freedom is however limited: the borrowing may only finance investment expenditures and reimbursement of the capital of borrowings must be entirely covered by the local authority's own resources. Nonetheless the financing of the Issuer is compelled by two hazards which he does not control: the evolution of transfer duties and the consequences of financial and tax reforms at the national level. Besides, the obligation to repay the debt (principal and interest) is a very protective legal aspect for lenders. Recourse to financial instruments is only authorized for hedging rate risks or exchange rate risks. The Issuer is not exposed to industrial risks. The Issuer has guaranteed part of a loan taken out by the French Rugby Federation (la Fédération française de Rugby) (the "FFR") for the construction of a large rugby stadium on its territory. The decision to build the rugby stadium has not yet been taken by the FFR, so the negotiation of the loan agreement has not yet begun. The guarantee which will be, if a default occurs, provided by the Issuer will, in any case, have to respect the prudential ratios set by the CGCT regarding loan guarantees provided by local authorities. Risks linked to the rating of the Issuer The rating of the Issuer and the Notes, if those are subject to a separate rating by Standard & Poor's Credit Market Services France SAS and Fitch France SAS is by nature limited, being only the expression of an opinion on the level of credit risks (default, arrears) associated with the Issuer and does not necessarily reflect all risks relating to the Issuer, nor those relating to the Notes. This rating is not and should in no way be construed as constituting, to the attention of investors and holders of Notes, an invitation, inducement or recommendation to perform any operations on the Notes including in this respect, to acquire, hold, maintain, pledge or sell Notes. The rating of the Issuer and the Notes may at any time be suspended, modified or withdrawn by Standard & Poor's Credit Market Services France SAS and Fitch France SAS. D.3 Key information on the key risks that are specific to the securities: Investors are informed that they could suffer a loss of their investment in whole or in part, as the case may be (being specified that the incurred risk is limited to the value of their investment) The market of the Notes may be volatile and adversely affected by numerous events. The market of the Notes issued is affected by the market and economic conditions and, to some extent, by interest rates, exchange rate or inflation in other European and developed countries. The trading market for debt securities may be volatile and may be adversely impacted by many events The market for debt securities issued by issuers is influenced by economic and market conditions and, to varying degrees, interest rates, currency exchange rates and inflation rates in other European and other industrialised countries. An active trading market for the Notes may not develop There can be no assurance that an active trading market for the Notes will develop, or, if one does develop, that it will be maintained. If an active trading market for the Notes does not develop or is not maintained, the market or trading price and liquidity of the Notes may be adversely affected. The Notes may be redeemed before maturity If, on the occasion of a repayment of principal or a payment of interest, the Issuer would be obliged to pay Additional Amounts, the Issuer may redeem all outstanding Notes at the Early Redemption Amount together, unless otherwise specified in the relevant Final Terms, with interest accrued up to the date set for redemption. Any early redemption at the option of the Issuer, if provided for in any Final Terms for a particular issue of Notes, could cause the yield received by Noteholders to be considerably less than anticipated The Final Terms for a particular issue of Notes may provide for early redemption at the option of the Issuer. As a consequence, the yield received upon redemption may be lower than expected, and the redeemed amount of the Notes may be lower than the purchase price for the Notes paid by the Noteholder. As a consequence, part of the capital invested by the Noteholder may be lost. Investors will not be able to calculate in advance their rate of return on Floating Rate Notes A key difference between Floating Rate Notes and Fixed Rate Notes is that interest income on Floating Rate Notes cannot be anticipated. Due to varying interest income, investors are not able to determine a definite yield of Floating Rate Notes at the time they purchase them, so that their return on investment cannot be compared with that of investments having longer fixed interest periods

12 Risks arising in relation with fixed rate Notes It cannot be set aside that the value of fixed rate Notes be affected by future variations on the interest rate markets. Exchange rate risks and exchange controls The Issuer will pay principal and interest on the Notes in the currency specified in the relevant Terms and Conditions. This presents certain risks relating to currency conversions if an investor's financial activities are principally in a currency or currency unit which is different than that of the relevant Notes. Government and monetary authorities may impose (as some have done in the past) exchange controls that could adversely affect exchange rates. As a result, investors may receive less interest or principal than expected, or even no interest or principal. Investors will not be able to calculate in advance their rate of return on Floating Rate Notes A key difference between Floating Rate Notes and Fixed Rate Notes is that interest income on Floating Rate Notes cannot be anticipated. Due to varying interest income, investors are not able to determine a definite yield of Floating Rate Notes at the time they purchase them, so that their return on investment cannot be compared with that of investments having longer fixed interest periods. If the Terms and Conditions provide for frequent Interest Payment Date, investors are exposed to reinvestment risks if market interest rates decrease. That is, if the market interest rates decrease, investors may not be able to reinvest their interest proceeds at an effective interest rate as high as the interest rate of the Notes. Amendments of the Conditions The Noteholders will, in respect of all Tranches in any Series, be grouped automatically for the defence of their common interests in a Masse and a General Meeting can be held. The Terms and Conditions permit in certain cases, at a specific majority of Noteholders, to bind all Noteholders including Noteholders who did not attend and vote at the relevant General Meeting and Noteholders who voted in a manner contrary to the majority. The General Meeting may deliberate on any proposal relating to the modification of the Conditions including any proposal, whether for arbitration or settlement, relating to rights in controversy or which were the subject of judicial decisions Change of law The Terms and Conditions of the Notes and the provisions of the Guarantee are based on French law in effect as at the date of this Base Prospectus. No assurance can be given as to the impact of any possible judicial decision or change to French law or administrative practice after the date of this Base Prospectus, on the Notes and/or the Guarantee. Taxation Potential purchasers and sellers of the Notes should be aware that they may be required to pay taxes or other documentary charges or duties in accordance with the laws and practices of the country where the Notes are transferred or other jurisdictions. In some jurisdictions, no official statements of the tax authorities or court decisions may be available for innovative financial notes such as the Notes. Potential investors are advised not to rely upon the tax summary contained in this Base Prospectus and, if applicable, any supplement related thereto, but to ask for their own tax adviser's advice on their individual taxation with respect to the acquisition, sale and redemption of the Notes. Only these advisors are in a position to duly consider the specific situation of the potential investor. This investment consideration has to be read in connection with the taxation section of this Base Prospectus and, if applicable, any supplement related thereto. EU Savings Directive The EU Savings Directive (the "Savings Directive") requires each Member State to provide to the tax authorities of another Member State details of payments of interest and other similar income within the meaning of the Savings Directive made by a paying agent within its jurisdiction to, or under circumstances to the immediate benefit of, a beneficial owner (within the meaning of the Savings Directive) resident in that other Member State. However, for a transitional period, Luxembourg and Austria will instead impose a withholding tax of 35% on any interest payment (within the meaning of the Savings Directive) unless the beneficiary of interest payment elects for the exchange of information (the end of this transitional period depends on the conclusion of certain other agreements relating to the exchange of information with certain other countries). Several countries and territories not members of the EU, including Switzerland, have adopted similar measures (a withholding system in the case of Switzerland applies unless the beneficiary of interest payment elects for the exchange of information). The Luxembourg Government has announced its intention to introduce the exchange of information with effect from 1st January The current level of withholding applicable to these payments is 35%. If a payment were to be made or collected through a Member State which has opted for a withholding system and an amount of, or in respect of tax were to be withheld from that payment, neither the Issuer nor any Paying Agent nor any other person would be obliged to pay additional amounts with respect to any Note as a result of the imposition of such withholding tax. On 24 March 2014, the Council of the European Union adopted a directive amending the Savings Directive (the "Amending Savings Directive") reinforcing the European rules on exchange of information regarding savings in order to allow Member States to combat fraud and tax evasion. The Amending Savings Directive should modify and broaden the scope of the obligations described above, and in particular, expand the range of payments covered by the Savings Directive to include certain additional types of income, and widen the range of recipients payments, to include certain other types of entity and legal arrangement. Member States are required to implement national legislation giving effect to these changes by 1st January

13 E.2b Reasons for the offer and use of proceeds when different from making profit and/or hedging certain risks: Control of legality The Préfet du Département de l'essonne has a discretionary two (2) months from the date that a deliberation of the General Assembly of the Essonne is transferred to the prefecture or from when contracts are agreed to proceed to review the legality of said deliberation or said decision to execute a contract. If the Préfet judges it to be illegal, he can defer it to the relevant administrative tribunal and, if it is found to be illegal, suspend it. The relevant administrative tribunal can, if it judges the said deliberation and/or decision to execute a contract illegal, either suspend or cancel it, partially or in their entirety. Third party claims A third party with an interest in bringing proceedings can lodge an appeal for abuse of power with the administrative jurisdictions in the case of a deliberation of the General Assembly of the Essonne and/or a decision to execute contracts agreed by this body within two (2) months from their publication or their notification and, if it is found to be an abuse, solicit their suspension. If the appeal for abuse of power is preceded by an administrative appeal or in certain other circumstances, the two (2) month window can be extended. If the deliberation or the decision to execute are not published in the appropriate manner, an appeal can be brought by any interested third party at any point. Once the case has been heard, the relevant administrative judge could, if he considers that a legal right has been violated, cancel the deliberation and or the decision to execute a contract, or, if he believes that it is a matter of urgency, suspend it. Moreover, if the administrative judge uncovers a particularly serious misdemeanor, the cancellation of the deliberation and or the decision to execute could lead to the cancellation of the contracts. Section E Offer The net proceeds of the issue of the Notes will be used to finance the Issuer's investments unless otherwise specified in the relevant Final Terms, following a change in the Issuer applicable regulation E.3 Terms and conditions of the offer: E.4 Interest that is material to the issue/ offer : E.7 Estimated expenses charged to the investor by the issuer or the offeror: The Notes will be issued at the issue price and will be fully or partly paid up, as specified in the relevant Final Terms. The issue price of the Notes to be issued under the Programme will be determined by the Issuer and the relevant Dealer(s) at the time of the issue, subject to market conditions. There are restrictions on the sale of Notes and the distribution of offering material in the United States, in the United Kingdom, in France, in States of the European Economic Area, in Italy, in Japan and in Switzerland. Interest and any potential conflicting ones that is material to the issue/offer of Notes will be described in the relevant Final Terms. Estimated expenses charged to the investor by the issuer or the offeror will be specified in the relevant Final Terms

14 RESPONSIBILITY FOR BASE PROSPECTUS Individuals assuming responsibility for this Base Prospectus In the name of the Issuer I declare, after taking all reasonable measures for this purpose and to the best of my knowledge, that the information contained in this Base Prospectus is in accordance with the facts and that it makes no omission likely to affect its import. Département de l'essonne Hôtel du Département boulevard de France Evry Cedex Evry, 4 July 2014 France Represented by [Bastien Sayen, Directeur des finances et de la commande publique)] Autorité des marchés financiers In accordance with articles L and L of the French Code monétaire et financier and with the General Regulations (Réglement général) of the Autorité des marchés financiers (AMF), in particular articles to , the AMF has granted to this Base Prospectus the visa n 14-[ ] on 4 July This document may only be used for the purposes of a financial transaction if completed by Final Terms. It was prepared by the Issuer and its signatories assume responsibility for it. In accordance with article L I of the French Code monétaire et financier, the visa was granted following an examination by the AMF of "whether the document is complete and comprehensible, and whether the information it contains is coherent". It does not imply that the AMF has verified the accounting and financial data set out in it. This visa has been granted subject to the publication of Final Terms in accordance with article of the AMF's General Regulations, setting out the terms of the securities being issued

15 RISK FACTORS The Issuer believes that the following factors are important for any decision to invest in the Notes and/or may affect its ability to fulfil its obligations under the Notes. All of these contingencies may or may not occur and the Issuer is not in a position to express a view on the likelihood of any such contingency occurring. Investors are informed that the value of their investment may be affected by certain factors or events (it being specified that the risk incurred by the investor is limited to the value of its investment). The Issuer believes that the factors described below represent the principal risks inherent in Notes issued under the Programme, but the Issuer does not represent that the statements below regarding the risks of holding any Notes are exhaustive. The risks described below are not the only risks that an investor in the Notes faces. Additional risks and uncertainties not currently known to the Issuer or that it currently believes to be immaterial could also have a material impact on the risks relating to an investment in the Notes. Prospective investors should also read the detailed information set out elsewhere in this Base Prospectus and reach their own views prior to making any investment decision. In particular, investors should make their own assessment as to the risks associated with the Notes prior to investing in the Notes. Any reference below to a Condition is a reference to the correspondingly numbered condition in the Terms and Conditions of the Notes. Risk factors relating to the Issuer Risks associated with the local government reforms Following the announcements by the President of the Republic and his Prime Minister, a draft law "New regional organization of the Republic" will be presented to the Council of Ministers on 18 June The initial version of this draft law contemplates the transfer of a certain number of departmental powers to the regions on one hand and the local level on the other. These transfers of power could be accompanied by transfers of resources and burdens but the exact extent of the changes and the way in which they will take place remains to be seen. Industrial risks The Issuer, as a local authority, is not exposed to industrial risks. Risks related to assets of the Issuer The assets risks of the Issuer are related to any damage, sinister, destruction, or physical loss that may be incurred in relation to any movable or unmovable assets in particular caused by natural disaster, fire or act of vandalism. Regarding the various risks related to its assets, the General Council has subscribed insurances which provide adequate coverage. As a legal entity governed by public law, the Essonne Department is not subject to enforcement proceedings, according to the principle of exemption from seizure of assets belonging to legal entity governed by public law (Cour de Cassation, 1ère Civile, 21 décembre 1987, Bureau de recherches géologiques et minières c/ Société Lloyd Continental, Bulletin Civil I, n 348, p. 249). As a consequence, and as any legal entity governed by public law, the Essonne Department is not subject to insolvency proceedings under the French Code de Commerce (Cour d'appel de Paris, 3ème chambre sect. B, 15 février 1991, Centre national des bureaux régionaux de fret, n et ). Risks related to the variations of funds from the State In order to contribute to the necessary effort to rebalance the public accounts, the local authorities will be required to contribute to the State funds via an adjustment mechanism. The individual contributions expected from different strata of authorities are not yet known. Only the decrease for 2014 in the context of the pact of mutual accountability between the state and the departments of July 2013 is known and will consist of 10m for the department of the Essonne. Financial risks Financing of the Issuer is compelled by two hazards which he does not control: the evolution of transfer duties and the consequences of financial and tax reforms at the national level. As regard to financial risks, the status of legal entity governed by public law and the legal framework governing local authority's borrowings limits very significantly the insolvency risks. The law N of 2 March 1982 setting out the rights of municipalities, départements and regions, discontinued the direct control of the central government over the actions of local authorities. It thus recognised to local authorities a full and entire freedom to borrow and their relationships with lenders are governed by private law and by the right recognized by the Conseil - 15-

16 Constitutionnel to enter into contractual agreements (Cons. const., 30 nov. 2006, déc. n DC, loi relative au secteur de l'énergie). The exercise of this freedom is however limited by the following principles: -The borrowing may only finance investment expenditures; and -Reimbursement of the capital of borrowings must be entirely covered by the local authority's own resources. Failure to comply with these principles is a reason for canceling the budget. Risks associated with the evolution of the debt management of the Issuer Since the financial crisis of September 2008 and the development of the crisis of European sovereign debt, the bank offer provided to local authorities has changed. The consequences of the crisis have resulted in a fairly radical change in the borrowing offer, regarding the rate and the financial conditions. The daily index TEMPE (EONIA) is no longer routinely offered by banks, making it difficult, if not impossible, daily cash management which is essential in the context of quasi prohibition of placement. Strengthening by regulators of so called "Basel III" ratios resulted in a very significant increase in margins granted on indices, involving a significant increase in financial expenses related to cash management The Department has therefore adapted its management to the development of financing instruments, increasing the use of available revolving tools (a revolving contract with Société Geénérale envelops 2014: 42 million) and entering in July 2011 a short term disintermediation financing program (eg by using the issuance of commercial paper) which is used since January Risks associated with the split on outstanding debt between fixed rates and variable rates A fixed rate protects the borrower from a rise in rates; however, it prevents it from benefiting from a fall. Inversely, the floating rate does not protect the borrower from a rise in rates, but does allow it to benefit from a fall. The current split of 60% floating rates and 40% fixed rates takes into account the current historically low levels of variable rates while maintaining a significant secure base in fixed rates. Risks related to Rating The rating of the Issuer and the Notes, if those are subject to a separate rating by Standard & Poor's Credit Market Services France SAS and Fitch France SAS is by nature limited, being only the expression of an opinion on the level of credit risks (default, arrears) associated with the Issuer and do not necessarily reflect all risks relating to the Issuer, nor those relating to the Notes. This rating is not and should in no way be construed as constituting, to the attention of investors and holders of Notes, an invitation, inducement or recommendation to perform any operations on the Notes including in this respect, to acquire, hold, maintain, pledge or sell Notes. The rating of the Issuer and the Notes may at any time be suspended, modified or withdrawn by Standard & Poor's Credit Market Services France SAS and Fitch France SAS. Risks associated with non-repayment of debts of the Issuer Besides, debt service (repayment of the capital and interest charges) is, in accordance with Article L of the Code general des collectivités territoriales (CGCT), a mandatory expenditure (dépense obligatoire). As a result, this expenditure must be included in the local authority's budget. If this is not complied with, the legislator has created a procedure (Article L CGCT) under which, after receiving the opinion of the regional Chambre des Comptes, the Prefect (to whom the matter is referred either by the State Representative in the Départment, the public accountant (le Payeur départemental) or any affected person) shall list the expenditure in the local authority's budget. In addition, if the Region does not pay any mandatory expenditure, the legislator has created a specific procedure pursuant to Article L of the CGCT authorizing the Prefect to procure payment of such expenditure of its own motion. The obligation to repay the debt (principal and interest) is a very protective legal aspect for lenders. Risks relating to derivative products Recourse to borrowings and to financial instruments (derivative products such as swaps, caps, tunnels ) is restricted by the interministerial circular, n NOR IOCB C of 25 June 2010 relating to financial products offered to local authorities and to their public entities. This circular specifies the risks associated with the management of debt by local authorities and repeats the state of the law regarding the recourse to financial products and financial risk hedging instruments. The provisions of the circular have been taken up in part by the law no of 26 July 2013 which sets out the recourse of the local authorities when it comes to loans and financial and asset-backed contracts 1. The Issuer strictly apply this legal framework and the use of swaps aims only to neutralize exchange risks whilst at the same time reducing cost. 1 The provisions of this law have set the following conditions: - 16-

17 Risk Factors relating to the Notes The trading market for debt securities may be volatile and may be adversely impacted by many events. The market for debt securities issued by issuers is influenced by economic and market conditions and, to varying degrees, interest rates, currency exchange rates and inflation rates in other European and other industrialised countries. There can be no assurance that events in France, Europe or elsewhere will not cause market volatility or that such volatility will not adversely affect the price of Notes or that economic and market conditions will not have any other adverse effect. An active trading market for the Notes may not develop. There can be no assurance that an active trading market for the Notes will develop, or, if one does develop, that it will be maintained. If an active trading market for the Notes does not develop or is not maintained, the market or trading price and liquidity of the Notes may be adversely affected. The Issuer is entitled to buy the Notes, as described in Condition 6(e), and the Issuer may issue further Notes, as described in Condition 14(a). Such transactions may favourably or adversely affect the price development of the Notes. If additional and competing products are introduced in the markets, this may adversely affect the value of the Notes. The Notes may be redeemed before maturity. If, on the occasion of a repayment of principal or a payment of interest the Issuer would be obliged to pay Additional Amounts, in accordance with Condition 8(b), the Issuer may redeem all outstanding Notes at the Early Redemption Amount together, unless otherwise specified in the relevant Final Terms, with interest accrued up to the date set for Redemption in accordance with the Terms and Conditions. Any early redemption at the option of the Issuer, if provided for in any Final Terms for a particular issue of Notes, could cause the yield received by Noteholders to be considerably less than anticipated. The Final Terms for a particular issue of Notes may provide for early redemption at the option of the Issuer. As a consequence, the yield received upon redemption may be lower than expected, and the redeemed amount of the Notes may be lower than the purchase price for the Notes paid by the Noteholder. As a consequence, part of the capital invested by the Noteholder may be lost, so that the Noteholder in such case would not receive the total amount of the capital invested. In addition, investors that choose to reinvest monies they receive through an early redemption may be able to do so only in securities with a lower yield than the redeemed Notes. Investors will not be able to calculate in advance their rate of return on Floating Rate Notes. A key difference between Floating Rate Notes and Fixed Rate Notes is that interest income on Floating Rate Notes cannot be anticipated. Due to varying interest income, investors are not able to determine a definite yield of Floating Rate Notes at the time they purchase them, so that their return on investment cannot be compared with that of investments having longer fixed interest periods. If the terms and conditions of the Notes provide for frequent interest payment dates, investors are exposed to the reinvestment risk if market interest rates decline. That is that if interest rates decline, investors will only be able to reinvest the interest income paid to them at the lower interest rates then prevailing. Exchange rate risks and exchange controls. The Issuer will pay principal and interest on the Notes in the currency specified in the relevant Final Terms (the Specified Currency ). This presents certain risks relating to currency conversions if an investor s financial activities are principally in a currency or currency unit (the "Investor s Currency") other than the Specified Currency. These include the risk that exchange rates may significantly change (including changes due to devaluation of the Specified Currency or revaluation of the Investor s Currency) and the risk that authorities with jurisdiction over the Investor s Currency may impose or modify exchange controls. An appreciation in the value of the Investor s Currency relative to the Specified Currency would decrease (1) the Investor s Currencyequivalent yield on the Notes, (2) the Investor s Currency-equivalent value of the principal payable on the Notes and (3) the Investor s Currency-equivalent market value of the Notes. Government and monetary authorities may impose (as some have done in the past) exchange controls that could adversely affect an applicable exchange rate. As a result, investors may receive less interest or principal than expected, or no interest or principal. Risks arising in relation with fixed rate Notes - the loan must be denominated in Euros or in a foreign currency (in the latter case, in order to provide complete cover regarding any risk of change, a euro swap contract must be entered into at the time of the taking out of the loan for the whole amount and for the duration of the loan; - the interest rate must be fixed or floating (in the latter case the indices and the variations of the indices authorized by the indexation clauses of the floating interest rates must conform to those established by decree of the Conseil d'etat, which is not currently the case); and - the indexation formula of the floating interest rates must satisfy certain criteria relating to simplicity or predictability of the financial costs of the local authorities, their groupings and the departmental fire and ambulance services

18 It cannot be set aside that the value of fixed rate Notes be affected by future variations on the interest rate markets. Modification of the Conditions The Noteholders will, in respect of all Tranches in any Series, be grouped automatically for the defence of their common interests in a Masse and a General Meeting can be held. The Terms and Conditions permit in certain cases, at a specific majority of Noteholders, to bind all Noteholders including Noteholders who did not attend and vote at the relevant General Meeting and Noteholders who voted in a manner contrary to the majority. The General Meeting may deliberate on any proposal relating to the modification of the Conditions including any proposal, whether for arbitration or settlement, relating to rights in controversy or which were the subjects of judicial decisions, as more fully described in Condition 11. Change of law The Terms and Conditions of the Notes and the provisions of the Guarantee are based on French law in effect as at the date of this Base Prospectus. No assurance can be given as to the impact of any possible judicial decision or change to French law or administrative practice after the date of this Base Prospectus, on the Notes and/or the Guarantee. Taxation Potential purchasers and sellers of the Notes should be aware that they may be required to pay taxes or other documentary charges or duties in accordance with the laws and practices of the country where the Notes are transferred or other jurisdictions. In some jurisdictions, no official statements of the tax authorities or court decisions may be available for innovative financial notes such as the Notes. Potential investors are advised not to rely upon the tax summary contained in this Base Prospectus and, if applicable, any supplement related thereto, but to ask for their own tax adviser's advice on their individual taxation with respect to the acquisition, sale and redemption of the Notes. Only these advisors are in a position to duly consider the specific situation of the potential investor. This investment consideration has to be read in connection with the taxation section of this Base Prospectus and, if applicable, any supplement related thereto. EU Savings Directive The EU Savings Directive (the "Savings Directive") requires each Member State to provide to the tax authorities of another Member State details of payments of interest and other similar income within the meaning of the Savings Directive made by a paying agent within its jurisdiction to, or under circumstances to the immediate benefit of, a beneficial owner (within the meaning of the Savings Directive) resident in that other Member State. However, for a transitional period, Luxembourg and Austria will instead impose a withholding tax of 35% on any interest payment (within the meaning of the Savings Directive) unless the beneficiary of interest payment elects for the exchange of information (the end of this transitional period depends on the conclusion of certain other agreements relating to the exchange of information with certain other countries). Several countries and territories not members of the EU, including Switzerland, have adopted similar measures (a withholding system in the case of Switzerland applies unless the beneficiary of interest payment elects for the exchange of information). The Luxembourg Government has announced its intention to introduce the exchange of information with effect from 1st January The current level of withholding applicable to these payments is 35%. If a payment were to be made or collected through a Member State which has opted for a withholding system and an amount of, or in respect of tax were to be withheld from that payment, neither the Issuer nor any Paying Agent nor any other person would be obliged to pay additional amounts with respect to any Note as a result of the imposition of such withholding tax. On 24 March 2014, the Council of the European Union adopted a directive amending the Savings Directive (the "Amending Savings Directive") reinforcing the European rules on exchange of information regarding savings in order to allow Member States to combat fraud and tax evasion. The Amending Savings Directive should modify and broaden the scope of the obligations described above, and in particular, expand the range of payments covered by the Savings Directive to include certain additional types of income, and widen the range of recipients payments, to include certain other types of entity and legal arrangement. Member States are required to implement national legislation giving effect to these changes by 1st January Control of legality The Préfet du Département de l'essonne has a discretionary two (2) months from the date that a deliberation of the General Assembly of the Essonne is transferred to the prefecture or from when contracts are agreed to proceed to review the legality of said deliberations or said decision to execute a contract. If the Préfet judges it to be illegal, he can defer it to the relevant administrative tribunal and, if it is found to be illegal, suspend it. The relevant administrative tribunal can, if it judges the said deliberation and/or decision to execute a contract illegal, either suspend or cancel it, partially or in their entirety. Third party claims A third party with an interest in bringing proceedings can lodge an appeal for abuse of power with the administrative jurisdictions in the case of a deliberation of the General Assembly of the Essonne and/or a decision to execute contracts agreed by this body within - 18-

19 two (2) months from their publication or their notification and, if it is found to be an abuse, solicit their suspension. If the appeal for abuse of power is preceded by an administrative appeal or in certain other circumstances, the two (2) months window can be extended. If the deliberation or the decision to execute are not published in the appropriate manner, an appeal could be brought by any interested third party without any time limitation. Once the case has been heard, the relevant administrative judge could, if he considers that a legal right has been violated, cancel the deliberation and or the decision to execute, or, if he believes that it is a matter of urgency, suspend it. Moreover, if the administrative judge uncovers a particularly serious misdemeanor, the cancellation of the deliberation and or the decision to execute could lead to the cancellation of the contracts

20 DOCUMENTS INCORPORATED BY REFERENCE This Base Prospectus should be read and construed in conjunction with the following documents which have been previously filed with the AMF. These documents shall be incorporated in by reference, and form part of, this Base Prospectus: The chapter "Terms and Conditions" of the base prospectus dated 25 June 2009 (a visa has been granted by the AMF with n on 25 June 2009) (the "2009 Terms and Conditions "); The chapter "Terms and Conditions" of the base prospectus dated 23 June 2010 (a visa has been granted by the AMF with n on 23 June 2010) (the "2010 Terms and Conditions "); The chapter "Terms and Conditions" of the base prospectus dated 29 June 2011 (a visa has been granted by the AMF with n on 29 June 2011) (the "2011 Terms and Conditions "); The chapter "Terms and Conditions" of the base prospectus dated 27 July 2012 (a visa has been granted by the AMF with n on 27 July 2012) (the "2012 Terms and Conditions "); and The chapter "Terms and Conditions" of the base prospectus dated 23 July 2013 (a visa has been granted by the AMF with n on 26 July 2013) (the "2013 Terms and Conditions ") for the purpose of the issue of Notes to be assimilated with Notes issued pursuant to the 2009 Terms and Conditions, 2010 Terms and Conditions, 2011 Terms and Conditions, 2012 Terms and Conditions or the 2013 Terms and Conditions. For so long as Notes issued under the Programme are outstanding, any document incorporated by reference will published (a) on the websites of the Issuer ( (b) available for copy, without charges, during normal business days and hours, any business day of the week, at the registered office of the Issuer and at the specified offices of any Paying Agent set out at the end of this Base Prospectus. The information incorporated by reference shall be read in accordance with the cross-reference table below. Any information not listed in the cross-reference table below but included in the documents incorporated by reference is given for information purposes only Terms and Conditions 2010 Terms and Conditions 2011 Terms and Conditions 2012 Terms and Conditions 2013 Terms and Conditions Pages of the base prospectus dated 25 June of the base prospectus dated 23 June of the base prospectus dated 29 June of the base prospectus dated 27 July of the base prospectus dated 26 July

21 GENERAL DESCRIPTION OF THE PROGRAMME The following general description is qualified by the remainder of this Base Prospectus. The Notes will be issued on such terms of the Notes as set out on pages 32 to 53 as completed by the provisions of the relevant Final Term agreed between the Issuer and the relevant Dealer(s) in accordance with Prospectus Directive and European Regulation. Words and expressions defined in the Terms and Conditions of the Notes below shall have the same meaning in this general description of the Programme. Issuer: Description: Département de l'essonne Euro Medium Term Note (the Programme ). The Notes will constitute obligations under French law. Arranger: Dealers: HSBC France BNP Paribas Deutsche Bank AG, London Branch Goldman Sachs International HSBC France NATIXIS Société Générale UBS Limited The Issuer may from time to time terminate the appointment of any dealer under the Programme or appoint additional dealers either in respect of one or more Tranches or in respect of the whole Programme. References in this Base Prospectus to Permanent Dealers are to the persons listed above as Dealers and to such additional persons that are appointed as dealers in respect of the whole Programme (and whose appointment has not been terminated) and to Dealers are to all Permanent Dealers and all persons appointed as a dealer in respect of one or more Tranches. At the date of this Base Prospectus, only credit institutions and investment firms incorporated in a member state of the European Union ( EU ) and which are authorised by the relevant authority of such member home state to lead-manage bond issues in such member state may, act as Dealers or lead manager Programme Limit: Principal Paying Agent and Fiscal Agent: Method of Issue: Maturities: Up to Euro 1,000,000,000 (or the equivalent in other currencies at the date of issue) aggregate nominal amount of Notes outstanding at any one time. CACEIS Corporate Trust in respect of Dematerialised Notes. A specific principal paying agent will be appointed in respect of any Series of Materialised Notes. The Notes will be issued on a syndicated or non-syndicated basis. The Notes will be issued in series (each a Series ). Each Series may be issued in tranches (each a Tranche ) on the same or different issue dates. The specific terms of each Tranche will be set out in the final terms to this Base Prospectus (the Final Terms ). The Notes of each Tranche being fungible (assimilables) the terms of each Tranche will be identical to the terms of other Tranches of the same Series, save in respect of the issue date, the issue price and the first payment of interest. Subject to compliance with all relevant laws, regulations and directives, as specified in the relevant Final Terms. Currencies: Subject to compliance with all relevant laws, regulations and directives, Notes may be issued in euro, U.S. Dollars, Japanese yen, Swiss francs, Sterling and in any other - 21-

22 currency agreed between the Issuer and the relevant Dealer(s). Denomination(s): Notes shall be issued in the Specified Denomination(s) set out in the relevant Final Terms provided that: (i) where Notes are admitted to trading on a Regulated Market or offered to the public in circumstances which require the publication of a prospectus pursuant to Prospectus Directive, such Notes shall have a specified denomination of at least Euro 1,000 (or its equivalent in an other currencies at the Issue Date); and (ii) the minimum specified denomination of each Note shall comply with central bank requirements (or any other competent authority) and with all applicable legal and/or regulatory in respect of the specified currency. Unless otherwise permitted by then current laws and regulations, Notes (including Notes denominated in Sterling) having a maturity of less than one year from the date of issue and in respect of which the issue proceeds are to be accepted by the Issuer in the United Kingdom or whose issue otherwise constitutes a contravention of section 19 of the Financial Services and Markets Act 2000 (the FSMA ) will have a minimum denomination of 100,000 (or its equivalent in other currencies). Issue Price: Status of the Notes: Negative Pledge: Events of Default: Redemption Amount: Early Redemption: Notes may be issued at their nominal amount or at a discount or premium to their nominal amount. The Notes and, on maturity, the relevant Coupons will constitute direct, unconditional, unsubordinated and (subject to the provisions relating to negative pledge) unsecured obligations of the Issuer and will rank pari passu among themselves and (save for certain obligations required to be preferred by French law) equally with all other present or future unsecured and unsubordinated obligations of the Issuer from time to time outstanding. So long as any of the Notes or, if applicable, any Coupons relating to them, remains outstanding, the Issuer will not create or permit to subsist any mortgage, lien, charge, pledge or other form of security interest (sûrete réelle) upon any of its assets or revenues, present or future, to secure any present or future indebtedness for borrowed money in the form of, or represented by, bonds (obligations), notes or other securities with a maturity greater than one year and which are for the time being, or are capable of being, admitted to trading on a Regulated Market, unless the Issuer's obligations under the Notes and, if applicable, Coupons are equally and rateably secured therewith. The terms of the Notes will contain an events of default provision as further described in Terms and Conditions of the Notes - Events of Default. The relevant Final Terms will specify the basis for calculating the redemption amounts payable among the options described at Article 6 of the Terms "Redemption, Purchase and Options". Unless permitted by then current laws and regulations, Notes (including Notes denominated in Sterling) having a maturity of less than one year from the date of issue and in respect of which the issue proceeds are to be accepted by the Issuer in the United Kingdom or whose issue otherwise constitutes a contravention of section 19 of the FSMA must have a minimum redemption amount of 100,000 (or its equivalent in other currencies). The Final Terms issued in respect of each issue of Notes will state whether such Notes may be redeemed prior to their stated maturity. Notes will be redeemable at the option of the Issuer prior to maturity for tax reasons. See "Terms and Conditions of the Notes - Redemption, Purchase and Options". Make-whole: Unless otherwise provided in the relevant Final Terms, the Notes may be redeemed at the option of the Issuer in whole (but not in part), at any time prior to their maturity date, at their Make Whole Redemption Amount by the Issuer. See "Terms and Conditions of the Notes - Redemption, Purchase and Options"

23 Withholding tax: 1. All payments of principal and interest by or on behalf of the Issuer in respect of the Notes shall be made free and clear of, and without withholding or deduction for, any taxes, duties, assessments or governmental charges of whatever nature imposed, levied, collected, withheld or assessed by or within France or any authority therein or thereof having power to tax, unless such withholding or deduction is required by law. 2. Notes (except Notes which are to be assimilated (assimilées) with Notes issued before 1 March 2010 having the benefit of Article 131 quater of the French Code général des impôts fall under the French withholding tax regime pursuant to the French loi de finances rectificative pour 2009 no.3 (no dated 30 December 2009), (the Corrective Finance Law for 2009 ). Payments of interest and other revenues made by the Issuer on such Notes will not be subject to the withholding tax set out under Article 125 A III of the French Code général des impôts unless such payments are made outside France in a non-cooperative State or territory (Etat ou territoire non coopératif) within the meaning of Article A of the French Code général des impôts (a Non-Cooperative State ). If such payments under the Notes are made in a Non-Cooperative State, a 75% withholding tax will be applicable (subject to certain exceptions described below and the more favourable provisions of any applicable double tax treaty) by virtue of Article 125 A III of the French Code général des impôts. Furthermore, interest and other revenues on such Notes will not be deductible from the Issuer's taxable income, if they are paid or accrued to persons established in a Non-Cooperative State or paid in such a Non-Cooperative State. Under certain conditions, any such non-deductible interest and other revenues may be recharacterised as constructive dividends pursuant to Article 109 of the French Code général des impôts, in which case such non-deductible interest and other revenues may be subject to the withholding tax set out under Article 119 bis of the French Code général des impôts, at a rate of 30% or 75%. Notwithstanding the foregoing, the Corrective Finance Law for 2009 provides that neither the 75% withholding tax nor the non-deductibility will apply in respect of a particular issue of Notes if the Issuer can prove that the principal purpose and effect of such issue of Notes was not that of allowing the payments of interest or other revenues to be made in a Non-Cooperative State (the Exception). Pursuant to the Bulletin Officiel des Finances Publiques-Impôts BOI-ANNX and BOI- ANNX published on 12 September 2012, an issue of Notes will benefit from the Exception without the Issuer having to provide any proof of the purpose and effect of such issue of Notes, if such Notes are: (i) offered by means of a public offer within the meaning of Article L of the French Code monétaire et financier or pursuant to an equivalent offer in a State other than a Non-Cooperative State. For this purpose, an "equivalent offer" means any offer requiring the registration or submission of an offer document by or with a foreign securities market authority; or (ii) admitted to trading on a regulated market or on a French or foreign multilateral securities trading system provided that such market or system is not located in a Non- Cooperative State, and the operation of such market is carried out by a market operator or an investment services provider, or by such other similar foreign entity, provided further that such market operator, investment services provider or entity is not located in a Non-Cooperative State; or (iii) admitted, at the time of their issue, to the operations of a central depositary or of a securities clearing and delivery and payments systems operator within the meaning of Article L of the French Code monétaire et financier, or of one or more similar foreign depositaries or operators provided that such depositary or operator is not located in a Non-Cooperative State. 3. Interest and other revenues on Notes issued (or deemed issued) outside France as provided under Article 131 quater of the French Code général des impôts which are to be assimilated (assimilées) with Notes issued before 1 March 2010 will continue to be exempt from the withholding tax set out under Article 125 A III of the French Code général des impôts

24 In addition, interest and other revenues paid by the Issuer on Notes which are to be assimilated (assimilées) with Notes issued before 1 March 2010 will not be subject to the withholding tax set out in Article 119 bis of the French Code général des impôts solely on account of their being paid in a Non-Cooperative State or accrued or paid to persons established or domiciled in a Non-Cooperative State. Pursuant to Articles 125 A and 125 D of the Code général des impôts in the publication from the finance laws 2013 (Law No of 29 December 2012), and subject to certain exceptions, interest and other similar income received from 1 January, 2013 by French residents are subject to a flat rate of 24%, which is deductible from the income tax due for the year of payment of such income. Social contributions (CSG, CRDS and other related contributions) are also levied by withholding tax at an effective rate of 15.5% on interest and other similar income paid to French resident Fixed Rate Notes: Floating Rate Notes: Fixed interest will be payable in arrears on the date or dates in each year specified in the relevant Final Terms. Floating Rate Notes will bear interest determined separately for each Series as follows and as indicated in the relevant Final Terms: (i) (ii) on the same basis as the floating rate under a notional interest rate swap transaction in the relevant Specified Currency pursuant to the Master Agreement of the Fédération Bancaire Française ("FBF") of 2013 relating to transactions on forward financial instruments (the FBF Master Agreement ) as supplemented by the Technical Schedules published by the Association Française des Banques or the FBF as amended, if applicable. by reference to LIBOR, LIBID, LIMEAN, CMS or EURIBOR (or such other benchmark as may be specified in the relevant Final Terms) in each case as adjusted for any applicable margin. Interest periods will be specified in the relevant Final Terms. Interest Periods and Interest Rates: Redenomination: Consolidation: Form of Notes: The length of the interest periods for the Notes and the applicable interest rate or its method of calculation may differ from time to time or be constant for any Series. Notes may have a maximum interest rate, a minimum interest rate, or both. The use of interest accrual periods permits the Notes to bear interest at different rates in the same interest period. All such information will be set out in the relevant Final Terms. Notes issued in the currency of any Member State of the EU which will participate in the single currency of the European Economic and Monetary Union may be redenominated into euro, all as more fully provided in the relevant Final Terms, pursuant to the Terms and Conditions of the Notes - Form, Denomination, Title and Redenomination. Notes of one Series may be consolidated with Notes of another Series as more fully provided in Terms and Conditions of the Notes - Further Issues and Consolidation. Notes may be issued in either dematerialised form ( Dematerialised Notes ) or in materialised form ( Materialised Notes ). Dematerialised Notes may, at the option of the Issuer, be issued in bearer dematerialised form (au porteur) or in registered dematerialised form (au nominatif) and, in such latter case, at the option of the relevant Noteholder, in either au nominatif pur or au nominatif administré form. No physical documents of title will be issued in respect of Dematerialised Notes. See Terms and Conditions of the Notes - Form, Denomination, Title and Redenomination. Materialised Notes will be in bearer form only. A Temporary Global Certificate will be issued initially in respect of each Tranche of Materialised Notes. Materialised Notes may only be issued outside France. Governing Law and relevant jurisdiction: French. All claims against the Issuer relating to the Notes, Coupons or Talons and to the Agency Agreement should be brought before the relevant tribunal in Paris (subject to the application of the laws governing the jurisdiction of the French courts)

25 However, the assets and properties of the Issuer are not subject to legal process under private law or attachment in France. Clearing Systems: Euroclear France as central depositary in relation to Dematerialised Notes and, in relation to Materialised Notes, Clearstream, Luxembourg and Euroclear or any other clearing system that may be agreed between the Issuer, the Fiscal Agent and the relevant Dealer. Notes which are admitted to trading on Euronext Paris will be cleared through Euroclear France. Initial Delivery of Dematerialised Notes: Initial Delivery of Materialised Notes: Admission to trading: Rating: Selling Restrictions: One Paris business day before the issue date of each Tranche of Dematerialised Notes, the lettre comptable relating to such Tranche shall be deposited with Euroclear France as central depositary. On or before the issue date of each Tranche of Materialise Notes, the Temporary Global Certificate issued in respect of Such Tranche shall be deposited with a common depositary for Euroclear and Clearstream, Luxembourg or with any other clearing system or may be delivered outside any clearing system provided that the method of such delivery has been agreed in advance by the Issuer, the Fiscal Agent and the relevant Dealer. On Euronext Paris and/or any other Regulated Market in the European Economic Area and/or another unregulated market as specified in the relevant Final Terms. The relevant Final Terms may specify that a Series of Notes will not be admitted to trading. The Programme has been rated AA by Standard & Poor's Credit Market Services France S.A.S. and AA by Fitch Ratings France S.A.S. Each of such credit rating agencies is established in the European Union and is registered under Regulation (EC) N 1060/2009 of the European Parliament and of the Council of 16 September 2009 on credit rating agencies as amended (the "CRA Regulation") and is included in the list of credit rating agencies published by the European Securities and Market Authority on its website ( in accordance with the CRA Regulation. Notes issued under the Programme may be rated or unrated. When an issue of Notes is rated, such rating will not necessarily be the same as the rating assigned under the Programme. The rating of Notes, if any, will be disclosed in the Final Terms. A rating is not a recommendation to buy, sell or hold securities and may be subject to suspension, change or withdrawal at any time by the assigning rating agency. There are restrictions on the sale of Notes and the distribution of offering material in various jurisdictions. See Subscription and Sale. In connection with the offering and sale of a particular Tranche, additional selling restrictions may be imposed which will be set out in the relevant Final Terms. The Issuer is Category 1 for the purposes of Regulation S under the United States Securities Act of 1933, as amended. Materialised Notes will be issued in compliance with U.S. Treas. Reg (c)(2)(i)(D) (the D Rules ) unless (i) the relevant Final Terms states that such Materialised Notes are issued in compliance with U.S. Treas. Reg (c)(2)(i)(C) (the C Rules ) or (ii) such Materialised Notes are issued other than in compliance with the D Rules or the C Rules but in circumstances in which the Notes will not constitute registration required obligations under the United States Tax Equity and Fiscal Responsibility Act of 1982 ( TEFRA ), which circumstances will be referred to in the relevant Final Terms as a transaction to which TEFRA is not applicable. The TEFRA rules do not apply to Dematerialised Notes

26 TERMS AND CONDITIONS OF THE NOTES The following is the text of the terms and conditions that, as supplemented in accordance with the provisions of the relevant Final Terms. In the case of any Tranche of Notes which are being (a) offered to the public in a Member State (other than pursuant to one or more of the exemptions set out in Article 3.2 of the Prospectus Directive) or (b) admitted to trading on a regulated market in a Member State, the relevant Final Terms shall not amend or replace any information in this Base Prospectus. In the case of Dematerialised Notes, the text of the terms and conditions will not be endorsed on physical documents of title but will be constituted by the following text as supplemented by the relevant Final Terms. In the case of Materialised Notes, either (i) the full text of these terms and conditions together with the relevant provisions of the Final Terms (and subject to simplification by the deletion of non-applicable provisions), or (ii) these terms and conditions as so supplemented, shall be endorsed on Definitive Materialised Notes. All capitalised terms that are not defined in these Conditions will have the meanings given to them in the relevant Final Terms. References in the Conditions to Notes are to the Notes of one Series only, not to all Notes that may be issued under the Programme. The Notes will constitute obligations under French law. The Notes are issued by Département de l'essonne (the Issuer or Département de l'essonne ) with the benefit of an amended agency agreement in the French language and translated into English for information purposes only (contrat de service financier modifié et consolidé) dated 4 July 2014 (the Agency Agreement ) between the Issuer, CACEIS Corporate Trust as, inter alia, fiscal agent in respect of Dematerialised Notes (as defined below) and the other agents named in it. The fiscal agent, the paying agents, the redenomination agent, the consolidation agent and the calculation agent(s) for the time being (if any) are referred to below, respectively, as the Fiscal Agent, the Paying Agents (which expression shall include the Fiscal Agent), the Redenomination Agent, the Consolidation Agent and the Calculation Agent(s). A Specific Fiscal Agent (acting also as Principal Paying Agent, Paying Agent, Redenomination Agent and Consolidation Agent) will be, as the case may be, appointed by the Issuer in respect of any series of Materialised Notes (as defined below). References below to Conditions are, unless the context requires otherwise, to the numbered paragraphs below. Certain defined terms contained in the 2013 FBF Master Agreement relating to transactions on forward financial instruments as supplemented by the Technical Schedules published by the Association Française des Banques or the Fédération Bancaire Française ( FBF ) (together the FBF Master Agreement ) as amended ifappropriate, have either been used or reproduced in Condition 5 below. Copies of the Agency Agreement, together with an English translation thereof, and of the FBF Master Agreement are available for copy at the specified offices of each of the Paying Agents. 1 FORM, DENOMINATION(S), TITLE AND REDENOMINATION (a) Form Notes may be issued either in dematerialised form ( Dematerialised Notes ) or in materialised form ( Materialised Notes ). (i) Title to Dematerialised Notes will be evidenced in accordance with Article L of the French Code monétaire et financier by book entries (inscriptions en compte). No physical document of title (including certificats représentatifs pursuant to Article R of the French Code monétaire et financier) will be issued in respect of the Dematerialised Notes. Dematerialised Notes (within the meaning of Article L of the French Code monétaire et financier) are issued, at the option of the Issuer, in either bearer form (au porteur), which will be inscribed in the books of Euroclear France ( Euroclear France ) (acting as central depositary) which shall credit the accounts of Account Holders, or in registered form (au nominatif) and, in such latter case, at the option of the relevant Noteholder in either administered registered form (au nominatif administré) inscribed in the books of an Account Holder or in fully registered form (au nominatif pur) inscribed in an account maintained by the Issuer or a registration agent (designated in the relevant Final Terms) acting on behalf of the Issuer (the Registration Agent ). For the purpose of these Conditions, Account Holder means any authorised financial intermediary institution entitled to hold accounts, directly or indirectly, with Euroclear France, and includes Euroclear Bank S.A./N.V. ( Euroclear ) and the depositary bank for Clearstream Banking, société anonyme Clearstream, Luxembourg )

27 (ii) Materialised Notes are issued in bearer form only. Materialised Notes in definitive form ( Definitive Materialised Notes ) are serially numbered and are issued with interest coupons ( Coupons ) (and, where appropriate, talons for further interest coupons ( Talons ) attached. In accordance with Article L of the French Code monétaire et financier, Materialised Notes (when they constitute titres financiers) must be issued outside the French territory. (b) Denomination(s) Notes shall be issued in the specified denomination(s) as set out in the relevant Final Terms (the Specified Denomination(s) ). Dematerialised Notes shall be issued in one Specified Denomination only. (c) Title (i) (ii) (iii) (iv) Title to Dematerialised Notes in bearer dematerialised form (au porteur) and in administered registered form (au nominatif administré) shall pass upon, and transfer of such Notes may only be effected through, registration of the transfer in the accounts of Account Holders. Title to Dematerialised Notes in fully registered form (au nominatif pur) shall pass upon, and transfer of such Notes may only be effected through, registration of the transfer in the accounts of the Issuer or the Registration Agent. Title to Definitive Materialised Notes having, where appropriate, Coupons and/or a Talon attached thereto on issue, shall pass by delivery. Except as ordered by a court of competent jurisdiction or as required by law, the holder (as defined below) of any Note, Coupon or Talon shall be deemed to be and may be treated as its absolute owner for all purposes, whether or not it is overdue and regardless of any notice of ownership, or an interest in it, any writing on it or its theft or loss and no person shall be liable for so treating the holder. In these Conditions, Noteholder or, as the case may be, holder of any Note means (i) in the case of Dematerialised Notes, the person whose name appears in the account of the relevant Account Holder or the Issuer or the Registration Agent (as the case may be) as being entitled to such Notes and (ii) in the case of Materialised Notes, the bearer of any Definitive Materialised Note and the Coupons or Talon relating to it. Capitalised terms have the meanings given to them in the relevant Final Terms. (d) Redenomination The Issuer may (if so specified in the relevant Final Terms) without the consent of the holder of any Note, Coupon or Talon, by giving at least 30 days' notice in accordance with Condition 15, redenominate into euro all, but not some only, of the Notes of any Series on or after the date on which the European Member State in whose national currency the Notes are denominated has become a participating Member State in the European Economic and Monetary Union (as provided in the Treaty establishing the European Community (the EC ), as amended from time to time (the Treaty )), all as more fully provided in the relevant Final Terms. 2 CONVERSION AND EXCHANGES OF NOTES (a) Dematerialised Notes (i) (ii) (iii) Dematerialised Notes issued in bearer dematerialised form (au porteur) may not be converted into Dematerialised Notes in registered dematerialised form, whether in fully registered form (au nominatif pur) or in administered registered form (au nominatif administré). Dematerialised Notes issued in registered dematerialised form (au nominatif) may not be converted into Dematerialised Notes in bearer dematerialised form (au porteur). Dematerialised Notes issued in fully registered form (au nominatif pur) may, at the option of the Noteholder, be converted into Notes in administered registered form (au nominatif administré), and vice versa. The exercise of any such option by such Noteholder shall be made in accordance with Article R of the French Code monétaire et financier. Any such conversion shall be effected at the cost of such Noteholder. (b) Materialised Notes - 27-

28 Materialised Notes of one Specified Denomination may not be exchanged for Materialised Notes of another Specified Denomination. 3 STATUS The Notes and Coupons relating to them constitute direct, unconditional, unsubordinated and (without prejudice to the provisions of Condition 4) unsecured obligations of the Issuer and rank and will rank pari passu and without any preference among themselves and (subject to such exceptions as are from time to time mandatory under French law) equally and rateably with all other present or future unsecured and unsubordinated obligations of the Issuer. 4 NEGATIVE PLEDGE So long as any of the Notes or, if applicable, any Coupons relating to them, remains outstanding (as defined herein-after), the Issuer will not create or permit to subsist any mortgage, lien, charge, pledge or other form of security interest (sûrete réelle) upon any of its assets or revenues, present or future, to secure any present or future indebtedness for borrowed money in the form of, or represented by, bonds (obligations), notes or other securities with a maturity greater than one year and which are for the time being, or are capable of being, admitted to trading on a Regulated Market, unless the Issuer's obligations under the Notes and, if applicable, Coupons are equally and rateably secured therewith. For the purposes of this Condition: outstanding means, in relation to the Notes of any Series, all the Notes issued other than (a) those that have been redeemed in accordance with the Conditions, (b) those in respect of which the date for redemption has occurred and the redemption moneys (including all interest accrued on such Notes to the date for such redemption and any interest payable after such date) have been duly paid (i) in the case of Dematerialised Notes in bearer form (au porteur) and in administered registered form (au nominatif administré), to the relevant Account Holders on behalf of the Noteholder as provided in Condition 7(a), (ii) in the case of Dematerialised Notes in fully registered form (au nominatif pur), to the account of the Noteholder as provided in Condition 7(a) and (iii) in the case of Materialised Notes, to the Fiscal Agent as provided in this Agreement and remain available for payment against presentation and surrender of Materialised Notes, and/or Coupons, as the case may be, (c) those which have become void or in respect of which claims have become prescribed, (d) those which have been purchased and cancelled as provided in the Conditions, (e) in the case of Materialised Notes (i) those mutilised or defaced Materialised Notes that have been surrendered in exchange for replacement Materialised Notes, (ii) (for the purpose only of determining how many such Materialised Notes are outstanding and without prejudice to their status for any other purpose) those Materialised Notes alleged to have been lost, stolen or destroyed and in respect of which replacement Materialised Notes have been issued and (iii) any Temporary Global Certificate to the extent that it shall have been exchanged for one or more Definitive Materialised Notes, pursuant to its provisions. 5 INTEREST AND OTHER CALCULATIONS (a) Definitions In these Conditions, unless the context otherwise requires, the following defined terms shall have the meanings set out below: Benchmark means the reference rate as set out in the relevant Final Terms; Business Day means: (i) (ii) (iii) in the case of euro, a day on which the TARGET2 (Trans European Automated Real Time Gross Settlement Express Transfer, which uses a unique shared platform and which was laucnhed on 19 November 2007 (or any successor) ("TARGET2")) is operating (a TARGET Business Day ); and/or in the case of a Specified Currency other than euro, a day (other than a Saturday or Sunday) on which commercial banks and foreign exchange markets settle payments in the principal financial centre for that currency; and/or in the case of a Specified Currency and/or one or more business centre(s) specified in the relevant Final Terms (the Business Centre(s) ), a day (other than a Saturday or a Sunday) on which commercial banks and foreign exchange markets settle payments in such currency in the Business Centre(s) or, if no currency is indicated, generally in each of the Business Centres so specified; Day Count Fraction means, in respect of the calculation of an amount of interest on any Note for any period of time (from and including the first day of such period to but excluding the last) (whether or not constituting an Interest Period, the Calculation Period ): - 28-

29 (i) (ii) if Actual /365, Actual /365-FBF or Actual /Actual-ISDA is specified in the relevant Final Terms, the actual number of days in the Calculation Period divided by 365 (or, if any portion of that Calculation Period falls in a leap year, the sum of (A) the actual number of days in that portion of the Calculation Period falling in a leap year divided by 366 and (B) the actual number of days in that portion of the Calculation Period falling in a non-leap year divided by 365); if Actual /Actual-ICMA is specified in the relevant Final Terms: (A) (B) if the Calculation Period is equal to or shorter than the Determination Period during which it falls, the number of days in the Calculation Period divided by the product of (x) the number of days in such Determination Period and (y) the number of Determination Periods normally ending in any year; and if the Calculation Period is longer than one Determination Period, the sum of: (x) the number of days in such Calculation Period falling in the Determination Period in which it begins divided by the product of (1) the number of days in such Determination Period and (2) the number of Determination Periods normally ending in any year; and (y) the number of days in such Calculation Period falling in the next Determination Period divided by the product of (1) the number of days in such Determination Period and (2) the number of Determination Periods normally ending in any year in each case where Determination Period means the period from and including a Determination Date in any year to but excluding the next Determination Date; and Determination Date means the date specified in the relevant Final Terms or, if none is so specified, the Interest Payment Date; (iii) if Actual /Actual-FBF is specified in the relevant Final Terms, the fraction whose numerator is the actual number of days elapsed during such period and whose denominator is 365 (or 366 if 29 February falls within the Calculation Period). If the Calculation Period is of a duration of more than one year, the basis shall be calculated as follows: (x) the number of complete years shall be counted back from the last day of the Calculation Period; (y) this number shall be increased by the fraction for the relevant period calculated as set out in the first paragraph of this definition. For example, for a Calculation Period from to the following two periods shall be taken into consideration: to = 3 years to = 138/365 (iv) (v) (vi) (vii) if Actual /365 (Fixed) is specified in the relevant Final Terms, the actual number of days in the Calculation Period divided by 365; if Actual /360 is specified in the relevant Final Terms, the actual number of days in the Calculation Period divided by 360; if 30 /360, 360 /360 or Bond Basis is specified in the relevant Final Terms the number of days in the Calculation Period divided by 360 (the number of days to be calculated on the basis of a year of 360 days with day months (unless (a) the last day of the Calculation Period is the 31st day of a month but the first day of the Calculation Period is a day other than the 30th or 31st day of a month, in which case the month that includes that last day shall not be considered to be shortened to a 30-day month, or (b) the last day of the Calculation Period is the last day of the month of February, in which case the month of February shall not be considered to be lengthened to a 30-day month)); if 30/360-FBF or Actual 30A/360 (American Bond Basis) is specified in the relevant Final Terms, in respect of each Calculation Period, the fraction whose denominator is 360 and whose numerator is the number of days calculated as for 30E/360-FBF, subject to the following exception: - 29-

30 where the last day of the Calculation Period is the 31st and the first day is neither the 30 th or the 31st, the last month of the Calculation Period shall be deemed to be a month of 31 days. Where: D1 (dd1, mm1, yy1) is the date of the beginning of the period D2 (dd2, mm2, yy2) is the date of the end of the period If dd 2 = 31 et dd 1 (30, 31) then: x [(yy 2 - yy 1 ) x (mm 2 - mm 1 ) x 30 + (dd 2 - dd 1 )] or: x [yy 2 - yy 1 ) x (mm 2 ± mm 1 ) 6x 30 + Min dd 2, 30) - Min (dd 1, 30)]; (viii) (ix) if 30E/360 or Eurobond Basis is specified in the relevant Final Terms, the number of days in the Calculation Period divided by 360 (the number of days to be calculated on the basis of a year of 360 days with day months, without regard to the date of the first day or last day of the Calculation Period unless, in the case of a Calculation Period ending on the Maturity Date, the Maturity Date is the last day of the month of February, in which case the month of February shall not be considered to be lengthened to a 30-day month); and if 30E/360-FBF is specified in the relevant Final Terms, in respect of each Calculation Period, the fraction whose denominator is 360 and whose numerator is the number of days elapsed during such period, calculated on the basis of a year comprising 12 months of 30 days, subject to the following the exception: if the last day of the Calculation Period is the last day of the month of February, the number of days elapsed during such month shall be the actual number of days. Using the same abbreviations as for 30/360-FBF the fraction is: 1//360 x [(yy 2 -yy 1 ) x (mm 2 - mm 1 ) x 30 + Min (dd 2, 30) - Min (dd 1, 30);] Effective Date means, with respect to any Floating Rate to be determined on an Interest Determination Date, the date specified as such in the relevant Final Terms or, if none is so specified, the first day of the Interest Accrual Period to which such Interest Determination Date relates; Euroclear France means the central depository of French securities located 66, rue de la Victoire, Paris; Euro-zone means the region comprised of member states of the European Union that adopt the single currency in accordance with the Treaty establishing the European Community (signed in Rome on 25 March 1957), as amended by the Treaty on European Union; FBF Definitions means the definitions set out in the FBF Master Agreement or the Technical Schedules, which are available on the FBF internet website ( Banking issues chapter, agreements & conventions page, as amended, if appropriate; Interest Accrual Period means the period beginning on (and including) the Interest Commencement Date and ending on (but excluding) the first Interest Period Date and each successive period beginning on (and including) an Interest Period Date and ending on (but excluding) the next succeeding Interest Period Date ; Interest Amount means the amount of interest payable, and in the case of Fixed Rate Notes, means the Fixed Coupon Amount or Broken Amount as specified in the relevant Final Terms, as the case may be; Interest Commencement Date means the Issue Date or such other date as may be specified in the relevant Final Terms; Interest Determination Date means, with respect to a Rate of Interest and Interest Accrual Period, the date specified as such in the relevant Final Terms or, if none is so specified, (i) the day falling two TARGET Business Days prior to the first day of such Interest Accrual Period if the Specified Currency is euro or (ii) the - 30-

31 (b) first day of such Interest Accrual Period if the Specified Currency is Sterling or (iii) the day falling two Business Days in the city specified in the Final Terms for the Specified Currency prior to the first day of such Interest Accrual Period if the Specified Currency is neither Sterling nor euro; Interest Payment Date means the date(s) specified in the relevant Final Terms; Interest Period means the period beginning on (and including) the Interest Commencement Date and ending on (but excluding) the first Interest Payment Date and each successive period beginning on (and including) an Interest Payment Date and ending on (but excluding) the next succeeding Interest Payment Date; Interest Period Date means each Interest Payment Date or any other dates specified in the relevant Final Terms; Option means any option exercisable by the Issuer, as may be provided in the relevant Final Terms Page means such page, section, caption, column or other part of a particular information service (including, but not limited to, Reuters) as may be specified for the purpose of providing a Relevant Rate, or such other page, section, caption, column or other part as may replace it on that information service or on such other information service, in each case as may be nominated by the person or organization providing or sponsoring the information appearing there for the purpose of displaying rates or prices comparable to that Relevant Rate; Rate of Interest means the rate of interest payable from time to time in respect of the Notes and that is either specified or calculated in accordance with the provisions in the relevant Final Terms; Reference Banks means the institutions specified as such in the relevant Final Terms or, if none, four major banks selected by the Calculation Agent in the interbank market (or, if appropriate, money, swap or over-thecounter index options market) that is most closely connected with the Benchmark (which, if EURIBOR is the relevant Benchmark, shall be the Euro-zone); Relevant Financial Centre means, with respect to any Floating Rate to be determined in accordance with a Screen Rate Determination on an Interest Determination Date, the financial centre as may be specified as such in the relevant Final Terms or, if none is so specified, the financial centre with which the relevant Benchmark is most closely connected (which, in the case of EURIBOR, shall be the Euro- zone) or, if none is so connected, Paris; Relevant Date means, in respect of any Note or Coupon, the date on which payment in respect of it first became due or (if any amount of the money payable is improperly withheld or refused) the date on which payment in full of the amount outstanding is made or (in the case of Materialised Notes if earlier) the date seven days after that on which notice is duly given to the holders of such Materialised Notes that, upon further presentation of the Materialised Note or Coupon being made in accordance with the Conditions, such payment will be made, provided that payment is in fact made upon such presentation ; Relevant Rate means the Benchmark for a Representative Amount of the Specified Currency for a period (if applicable or appropriate to the Benchmark) equal to the Specified Duration commencing on the Effective Date ; Relevant Time means, with respect to any Interest Determination Date, the local time in the Relevant Financial Centre specified in the relevant Final Terms or, if no time is specified, the local time in the Relevant Financial Centre at which it is customary to determine bid and offered rates in respect of deposits in the Specified Currency in the interbank market in the Relevant Financial Centre and for this purpose local time means, with respect to Europe and the Euro-zone as a Relevant Financial Centre, a.m. Brussels time; Representative Amount means, with respect to any Floating Rate to be determined in accordance with a Screen Rate Determination on an Interest Determination Date, the amount specified as such in the relevant Final Terms or, if none is specified, an amount that is representative for a single transaction in the relevant market at the time; Specified Currency means the currency specified as such in the relevant Final Terms or, if none is specified, the currency in which the Notes are denominated; and Specified Duration means, with respect to any Floating Rate to be determined in accordance with a Screen Rate Determination on an Interest Determination Date, the duration specified in the relevant Final Terms or, if none is specified, a period of time equal to the relative Interest Accrual Period, ignoring any adjustment pursuant to Condition 5(c)(ii). Interest on Fixed Rate Notes - 31-

32 Each Fixed Rate Note bears interest on its outstanding nominal amount from the Interest Commencement Date at the rate per annum (expressed as a percentage) equal to the Rate of Interest, such interest being payable in arrear on each Interest Payment Date except as otherwise provided in the relevant Final Terms. If a Fixed Coupon Amount or a Broken Amount is specified in the relevant Final Terms, the amount of interest payable on each Interest Payment Date will amount to the Fixed Coupon Amount or, if applicable, the Broken Amount so specified and in the case of the Broken Amount will be payable on the particular Interest Payment Date(s) specified in the relevant Final Terms. (c) Interest on Floating Rate Notes (i) Interest Payment Dates: Each Floating Rate Note bears interest on its outstanding nominal amount from the Interest Commencement Date at the rate per annum (expressed as a percentage) equal to the Rate of Interest, such interest being payable in arrear (except as otherwise provided in the relevant Final Terms) on each Interest Payment Date. Such Interest Payment Date(s) is/are either shown in the relevant Final Terms as Specified Interest Payment Dates or, if no Specified Interest Payment Date(s) is/are shown in the relevant Final Terms, Interest Payment Date shall mean each date which falls the number of months or other period shown in the relevant Final Terms as the Specified Period after the preceding Interest Payment Date or, in the case of the first Interest Payment Date, after the Interest Commencement Date. (ii) (iii) Business Day Convention: If any date referred to in these Conditions that is specified to be subject to adjustment in accordance with a Business Day Convention would otherwise fall on a day that is not a Business Day, then, if the Business Day Convention specified is (A) the Floating Rate Business Day Convention, such date shall be postponed to the next day that is a Business Day unless it would thereby fall into the next calendar month, in which event (x) such date shall be brought forward to the immediately preceding Business Day and (y) each subsequent such date shall be the last Business Day of the month in which such date would have fallen had it not been subject to adjustment, (B) the Following Business Day Convention, such date shall be postponed to the next day that is a Business Day, (C) the Modified Following Business Day Convention, such date shall be postponed to the next day that is a Business Day unless it would thereby fall into the next calendar month, in which event such date shall be brought forward to the immediately preceding Business Day or (D) the Preceding Business Day Convention, such date shall be brought forward to the immediately preceding Business Day. Rate of Interest for Floating Rate Notes: The Rate of Interest in respect of Floating Rate Notes for each Interest Accrual Period shall be determined in the manner specified in the relevant Final Terms and the provisions below relating to either FBF Determination or Screen Rate Determination shall apply, depending upon which is specified in the relevant Final Terms. (A) FBF Determination for Floating Rate Notes Where FBF Determination is specified in the relevant Final Terms as the manner in which the Rate of Interest is to be determined, the Rate of Interest for each Interest Accrual Period shall be determined by the Agent as a rate equal to the relevant FBF Rate plus or minus (as indicated in the relevant Final Terms) the Margin (if any). For the purposes of this sub-paragraph (A), FBF Rate for an Interest Accrual Period means a rate equal to the Floating Rate that would be determined by the Agent under a Transaction under the terms of an agreement incorporating the FBF Definitions and under which: 1) the Floating Rate is as specified in the relevant Final Terms and 2) the relevant Floating Rate Determination Date ( Date de Determination du Taux Variable ) is the first day of that Interest Accrual Period or any other date specified in the relevant Final Terms For the purposes of this sub-paragraph (A), Floating Rate, Agent, Floating Rate Determination Date (Date de Détermination du Taux Variable) and Transaction have the meanings given to those terms in the FBF Definitions. (B) Screen Rate Determination for Floating Rate Notes Where Screen Rate Determination is specified in the relevant Final Terms as the manner in which the Rate of Interest is to be determined, the Rate of Interest for each Interest Accrual Period shall - 32-

33 be determined by the Calculation Agent at or about the Relevant Time on the Interest Determination Date in respect of such Interest Accrual Period in accordance with the following: 1) if the Primary Source for Floating Rate is a Page, subject as provided below, the Rate of Interest shall be: (i) (ii) the Relevant Rate (where such Relevant Rate on such Page is a composite quotation or is customarily supplied by one entity) or the arithmetic mean of the Relevant Rates of the persons whose Relevant Rates appear on that Page, in each case appearing on such Page at the Relevant Time on the Interest Determination Date, subject as otherwise specified in the relevant Final Terms 2) if the Primary Source for the Floating Rate is Reference Banks or if sub-paragraph (a)(i) applies and no Relevant Rate appears on the Page at the Relevant Time on the Interest Determination Date or if sub-paragraph (a)(ii) applies and fewer than two Relevant Rates appear on the Page at the Relevant Time on the Interest Determination Date, subject as provided below, the Rate of Interest shall be the arithmetic mean of the Relevant Rates that each of the Reference Banks is quoting to leading banks in the Relevant Financial Centre at the Relevant Time on the Interest Determination Date, as determined by the Calculation Agent and 3) if paragraph (b) above applies and the Calculation Agent determines that fewer than two Reference Banks are so quoting Relevant Rates, subject as provided below, the Rate of Interest shall be the arithmetic mean of the rates per annum (expressed as a percentage) that the Calculation Agent determines to be the rates (being the nearest equivalent to the Benchmark) in respect of a Representative Amount of the Specified Currency that at least two out of five leading banks selected by the Calculation Agent in the principal financial centre of the country of the Specified Currency or, if the Specified Currency is euro, in the euro-zone as selected by the Calculation Agent (the Principal Financial Centre ) are quoting at or about the Relevant Time on the date on which such banks would customarily quote such rates for a period commencing on the Effective Date for a period equivalent to the Specified Duration (I) to leading banks carrying on business in Europe, or (if the Calculation Agent determines that fewer than two of such banks are so quoting to leading banks in Europe) (II) to leading banks carrying on business in the Principal Financial Centre; except that, if fewer than two of such banks are so quoting to leading banks in the Principal Financial Centre, the Rate of Interest shall be the Rate of Interest determined on the previous Interest Determination Date (after readjustment for any difference between any Margin, Rate Multiplier or Maximum or Minimum Rate of Interest applicable to the preceding Interest Accrual Period and to the relevant Interest Accrual Period). (d) Accrual of Interest Interest shall cease to accrue on each Note on the due date for redemption unless (i) in the case of Dematerialised Notes, on such due date or (ii) in the case of Materialised Notes, upon due presentation, payment is improperly withheld or refused, in which event interest shall continue to accrue (as well after as before judgment) at the Rate of Interest in the manner provided in this Condition 5 to the Relevant Date. (e) Margin, Maximum/Minimum Rates of Interest, and Redemption Amounts, Rate Multipliers and Rounding (i) (ii) If any Margin or Rate Multiplier is specified in the relevant Final Terms (either (x) generally, or (y) in relation to one or more Interest Accrual Periods), an adjustment shall be made to all Rates of Interest, in the case of (x), or the Rates of Interest for the specified Interest Accrual Periods, in the case of (y), calculated in accordance with (c) above by adding (if a positive number) or subtracting the absolute value (if a negative number) of such Margin or multiplying by such Rate Multiplier, subject always to the next paragraph; If any Maximum or Minimum Rate of Interest, or Redemption Amount is specified in the relevant Final Terms, then any Rate of Interest, or Redemption Amount shall be subject to such maximum or minimum, as the case may be; and - 33-

34 (iii) For the purposes of any calculations required pursuant to these Conditions (unless otherwise specified), (w) if FBF Determination is specified in the relevant Final Terms, all percentages resulting from such calculations shall be rounded, if necessary, to the nearest ten-thousandth of a percentage point (with halves being rounded up), (x) all percentages resulting from such calculations shall be rounded, if necessary, to the nearest one hundred-thousandth of a percentage point (with halves being rounded up), (y) all figures shall be rounded to seven significant figures (with halves being rounded up) and (z) all currency amounts that fall due and payable shall be rounded to the nearest unit of such currency (with halves being rounded up), save in the case of yen, which shall be rounded down to the nearest yen. For these purposes unit means the lowest amount of such currency that is available as legal tender in the country(ies) of such currency. (f) Calculations The amount of interest payable in respect of any Note for any period shall be calculated by multiplying the product of the Rate of Interest and the outstanding nominal amount of such Note by the Day Count Fraction, unless an Interest Amount (or a formula for its calculation) is specified in respect of such period, in which case the amount of interest payable in respect of such Note for such period shall equal such Interest Amount (or be calculated in accordance with such formula). Where any Interest Period comprises two or more Interest Accrual Periods, the amount of interest payable in respect of such Interest Period shall be the sum of the amounts of interest payable in respect of each of those Interest Accrual Periods. (g) Determination and Publication of Rates of Interest, Interest Amounts, Final Redemption Amounts, Optional Redemption Amounts and Early Redemption Amounts As soon as practicable after the relevant time on such date as the Calculation Agent may be required to calculate any rate or amount, obtain any quotation or make any determination or calculation, it shall determine such rate and calculate the Interest Amounts in respect of each Specified Denomination of the Notes for the relevant Interest Accrual Period, calculate the Final Redemption Amount, Optional Redemption Amount, Early Redemption Amount, or Make-Whole Redemption Amount obtain such quotation or make such determination or calculation, as the case may be, and cause the Rate of Interest and the Interest Amounts for each Interest Period and the relevant Interest Payment Date and, if required to be calculated, the Final Redemption Amount, Optional Redemption Amount, Early Redemption Amount or Make-Whole Redemption Amount to be notified to the Fiscal Agent, the Issuer, each of the Paying Agents, the Noteholders, any other Calculation Agent appointed in respect of the Notes that is to make a further calculation upon receipt of such information and, if the Notes are admitted to trading on a Regulated Market and the applicable rules of such market so require, it shall communicate such informations also to such market as soon as possible after their determination but in no event later than (i) the commencement of the relevant Interest Period, if determined prior to such time, in the case of notification to such market of a Rate of Interest and Interest Amount, or (ii) in all other cases, the fourth Business Day after such determination. Where any Interest Payment Date or Interest Period Date is subject to adjustment pursuant to Condition 5(c)(ii), the Interest Amounts and the Interest Payment Date so published may subsequently be amended (or appropriate alternative arrangements made by way of adjustment) without notice in the event of an extension or shortening of the Interest Period. The determination of any rate or amount, the obtaining of each quotation and the making of each determination or calculation by the Calculation Agent(s) shall (in the absence of manifest error) be final and binding upon all parties. (h) Calculation Agent and Reference Banks The Issuer shall procure that there shall at all times be four Reference Banks (or such other number as may be required by the Conditions) with offices in the Relevant Financial Centre and one or more Calculation Agents if provision is made for them in the relevant Final Terms and for so long as any Note is outstanding (as defined in Article 4). If any Reference Bank (acting through its relevant office) is unable or unwilling to continue to act as a Reference Bank, then the Issuer shall appoint another Reference Bank with an office in the Relevant Financial Centre to act as such in its place. Where more than one Calculation Agent is appointed in respect of the Notes, references in these Conditions to the Calculation Agent shall be construed as each Calculation Agent performing its respective duties under the Conditions. If the Calculation Agent is unable or unwilling to act as such or if the Calculation Agent fails duly to establish the Rate of Interest for an Interest Period or Interest Accrual Period or to calculate any Interest Amount, Final Redemption Amount, Early Redemption Amount, Optional Redemption Amount or Make-Whole Redemption Amount, as the case may be, or to comply with any other requirement, the Issuer shall appoint a leading bank or investment banking firm engaged in the interbank market (or, if appropriate, money, swap or over-the-counter index options market) that is most closely connected with the calculation or determination to be made by the Calculation Agent (acting through its principal Paris or Luxembourg, as appropriate, office or any other office actively involved in such market) to act as such in its place. The Calculation Agent may not resign its duties without a successor having been appointed as aforesaid

35 6 REDEMPTION, PURCHASE AND OPTIONS (a) Final Redemption Unless previously redeemed, purchased and cancelled as provided below or its maturity is extended pursuant to any option provided by the relevant Final Terms, including an Option of the Issuer in accordance with Condition6 (b), each Note shall be finally redeemed on the Maturity Date specified in the relevant Final Terms at its Final Redemption Amount provided in the relevant Final Terms (which, unless otherwise provided, is its nominal amount). (b) Redemption at the Option of the Issuer, Exercise of Issuer's Options and Partial Redemption If a Call Option is specified in the relevant Final Terms, the Issuer may subject to compliance by the Issuer by of all the relevant laws, regulations and directives and on giving not less than 15 nor more than 30 days' irrevocable notice in accordance with Condition 15 to the Noteholders (or such other notice period as may be specified in the relevant Final Terms) redeem, or exercise any Issuer's option (as may be described) in relation to, all or, if so provided, some, of the Notes on any Optional Redemption Date or Option Exercise Date, as the case may be. Any such redemption of Notes or exercise of Option shall be at their Optional Redemption Amount together with interest accrued to the date fixed for redemption, if any. Any such redemption must relate to Notes of a nominal amount at least equal to the minimum nominal amount to be redeemed specified in the relevant Final Terms and no greater than the maximum nominal amount to be redeemed specified in the relevant Final Terms. All Notes in respect of which any such notice is given shall be redeemed, or the Issuer's option shall be exercised, on the date specified in such notice in accordance with this Condition. In the case of a partial redemption or a partial exercise of an Issuer's option in respect of Materialised Notes, the notice to holders of such Materialised Notes shall also contain the number of the Definitive Materialised Notes to be redeemed or in respect of which such option has been exercised, which shall have been drawn in such place and in such manner as may be fair and reasonable in the circumstances, taking account of prevailing market practices, subject to compliance with any applicable laws and stock exchange requirements. In the case of a partial redemption of or a partial exercise of an Issuer's option in respect of Dematerialised Notes of any Series, the redemption may be effected, at the option of the Issuer, either (i) by reducing the nominal amount of all such Dematerialised Notes in proportion to the aggregate nominal amount redeemed or (ii) by redeeming in full some only of such Dematerialised Notes and, in such latter case, the choice between those Dematerialised Notes that will be fully redeemed and those Dematerialised Notes that will not be redeemed shall be made in accordance with Article R of the French Code monétaire et financier and the provisions of the relevant Final Terms, subject to compliance with any other applicable laws and stock exchange requirements. (c) Early Redemption The Early Redemption Amount payable in respect of any Note, upon redemption of such Note pursuant to Condition 6(d), or upon it becoming due and payable as provided in Condition 9 shall be the Final Redemption Amount together with interest accrued to the date fixed for redemption unless otherwise specified in the relevant Final Terms. (d) Redemption for Taxation Reasons (i) (ii) If, by reason of any change in French law, or any change in the official application or interpretation of such law, becoming effective after the Issue Date, the Issuer would on the occasion of the next payment of principal or interest due in respect of the Notes, not be able to make such payment without having to pay additional amounts as specified under Condition 8(b) below, the Issuer may, at its option, on any Interest Payment Date (if the relevant Notes are Floating Rate Notes), or at any time, (if the relevant Notes are not Floating Rate Notes) subject to having given not more than forty-five (45) nor less than thirty (30) days' notice to the Noteholders (which notice shall be irrevocable), in accordance with Condition 15, redeem all, but not some only, of the Notes at their Early Redemption Amount together with, any interest accrued to the date set for redemption provided that the due date for redemption of which notice hereunder may be given shall be no earlier than the latest practicable date on which the Issuer could make payment of principal and interest without withholding for French taxes. If the Issuer would, on the next payment of principal or interest in respect of the Notes, be prevented by French law from making payment to the Noteholders or, if applicable, holders of Coupons - 35-

36 ( Couponholders ) of the full amounts then due and payable, notwithstanding the undertaking to pay additional amounts contained in Condition 8(b) below, then the Issuer shall forthwith give notice of such fact to the Fiscal Agent and the Issuer shall upon giving not less than seven (7) days' prior notice to the Noteholders in accordance with Condition 15, redeem all, but not some only, of the Notes then outstanding at their Early Redemption Amount together with, unless otherwise specified in the Final Terms, any interest accrued to the date set for redemption (A) on the latest practicable Interest Payment Date on which the Issuer could make payment of the full amount then due and payable in respect of the Notes, provided that if such notice would expire after such Interest Payment Date the date for redemption pursuant to such notice of Noteholders shall be the later of (i) the latest practicable date on which the Issuer could make payment of the full amount then due and payable in respect of the Notes and (ii) fourteen (14) days after giving notice to the Fiscal Agent as aforesaid or (B) if so specified in the relevant Final Terms, at any time, provided that the due date for redemption of which notice hereunder shall be given shall be the latest practicable date at which the Issuer could make payment of the full amount payable in respect of the Notes, or, if applicable, Coupons or, if that date is passed, as soon as practicable thereafter. (e) Make-whole Redemption by the Issuer (i) Unless otherwise specified in the relevant Final Terms, the Issuer may, having given: (A) (B) not less than 15 nor more than 30 days' notice to the Noteholders in accordance with Condition 15 (Notices); and not less than 15 days before the giving of the notice referred to in (A) above, notice to the Fiscal Agent, the Calculation Agent and such other parties as may be specified in the Final Terms, (which notices shall be irrevocable and shall specify the date fixed for redemption (each such date, a Make-whole Redemption Date )) redeem all (but not some only) of the Notes then outstanding at any time prior to their Maturity Date at their relevant Make-whole Redemption Amount. On or not later than the Business Day immediately following the Calculation Date, the Calculation Agent shall notify the Issuer, the Fiscal Agent and such other parties as may be specified in the Final Terms of the Make-whole Redemption Amount. All Notes in respect of which any such notice referred to in sub-paragraph (B) above is given shall be redeemed on the relevant Make-whole Redemption Date in accordance with this Condition. (ii) For the purposes of this Condition 6 paragraph (e), unless the context otherwise requires, the following defined terms shall have the meanings set out below: Calculation Date means the third Business Day (as defined in Condition 5(a)) prior to the Makewhole Redemption Date. Make-whole Redemption Amount means in respect of any Notes to be redeemed an amount in the Specified Currency of the relevant Notes, calculated by the Calculation Agent and equal to the greater of (x) the Final Redemption Amount of the Notes so redeemed (as defined in Condition 6(a)) and (y) the sum of the then present values of the remaining scheduled payments of principal and interest on such Notes (excluding any interest accrued on the Notes to, but excluding, the relevant Make-whole Redemption Date) discounted to the relevant Make-whole Redemption Date on an annual basis at the Make-whole Redemption Rate plus a Make-whole Redemption Margin, plus in each case, any interest accrued on the Notes to, but excluding, the Make-whole Redemption Date. Make-whole Redemption Margin means the margin specified as such in the relevant Final Terms. Make-whole Redemption Rate means (i) the average of the four quotations given by the Reference Dealers of the mid-market annual yield to maturity of the Reference Security on the fourth Business Day preceding the Make-whole Redemption Date at 11:00 a.m. (Central European Time (CET)) (the "Reference Dealer Quotation") or (ii) the Reference Screen Rate, as specified in the relevant Final Terms. Reference Dealers means each of the four banks selected by the Calculation Agent which are primary European government security dealers, and their respective successors, or market makers in pricing corporate bond issues, or such other banks or method of selection of such banks as specified in the relevant Final Terms. Reference Screen Rate means the screen rate specified as such in the relevant Final Terms

37 Reference Security means the security specified as such in the relevant Final Terms. If the Reference Security is no longer outstanding, a Similar Security will be chosen by the Calculation Agent at 11:00 a.m. (CET) on the third Business Day preceding the Make-whole Redemption Date, quoted in writing by the Calculation Agent to the Issuer and published in accordance with Condition 15. Similar Security means a reference bond or reference bonds issued by the same issuer as the Reference Security having an actual or interpolated maturity comparable with the remaining term of the Notes that would be utilised, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of comparable maturity to the remaining term of the Notes. (f) Purchases The Issuer shall have the right at all times to purchase Notes (provided that, in the case of Materialised Notes, all unmatured Coupons and unexchanged Talons relating thereto are attached thereto or surrendered therewith) in the open market or by tender offer or otherwise at any price in accordance with any applicable laws and stock exchanges regulations. (g) Cancellation 7 PAYMENTS AND TALONS All Notes redeemed or purchased for cancellation by or on behalf of the Issuer will be cancelled, in the case of Dematerialised Notes, as well as all rights relating to payment of interest and other amounts relating to such Dematerialised Notes, by transfer to an account in accordance with the rules and procedures of Euroclear France and, in the case of Materialised Notes, together with all unmatured Coupons and all unexchanged Talons attached to such Notes, by surrendering the Temporary Global Certificate to the Fiscal Agent and the Definitive Materialised Notes in question together with all unmatured Coupons and unexchanged Talons. Any Notes so cancelled or, where applicable, transferred or surrendered for cancellation may not be reissued or resold and the obligations of the Issuer in respect of any such Notes shall be discharged. Since the Notes are listed and admitted to trading on Euronext Paris, the Issuer will inform Euronext about such cancellation. (a) Dematerialised Notes Payments of principal and interest in respect of Dematerialised Notes shall be made (i) (in the case of Dematerialised Notes in bearer dematerialised form or administered registered form) by transfer to the account denominated in the relevant currency of the relevant Account Holder(s) for the benefit of the relevant Noteholder and (ii) (in the case of Dematerialised Notes in fully registered form) to an account denominated in the relevant currency with a Bank (as defined below) designated by the relevant Noteholder. All payments validly made to such Account Holders will constitute an effective discharge of the Issuer in respect of such payments. (b) Materialised Notes Payments of principal and interest in respect of Materialised Notes shall, subject as mentioned below, be made against presentation and surrender of the relevant Materialised Notes ( in the case of interest, as specified in Condition 7(f)(v)) or Coupons (in the case of interest, save as specified in Condition 7(f)(v)), as the case may be, at the specified office of any Paying Agent outside the United States by a cheque payable in the relevant currency drawn on, or, at the option of the Noteholder, by transfer to an account denominated in such currency with, a Bank. Bank means a bank in the principal financial centre for such currency or, in the case of euro, in a city in which banks have access to the TARGET System. (c) Payments in the United States Notwithstanding the foregoing, if any Materialised Notes are denominated in U.S. Dollars, payments in respect thereof may be made at the specified office of any Paying Agent in New York City in the same manner as aforesaid if (i) the Issuer shall have appointed Paying Agents with specified offices outside the United States with the reasonable expectation that such Paying Agents would be able to make payment of the amounts on the Notes in the manner provided above when due, (ii) payment in full of such amounts at all such offices is illegal or effectively precluded by exchange controls or other similar restrictions on payment or receipt of such amounts and (iii) such payment is then permitted by United States law, without involving, in the opinion of the Issuer, any adverse tax consequence to the Issuer

38 (d) Payments Subject to Fiscal Laws All payments are subject in all cases to any applicable fiscal or other laws, regulations and directives in the place of payment but without prejudice to the provisions of Condition 8. No commission or expenses shall be charged to the Noteholders or Couponholders in respect of such payments. (e) Appointment of Agents The Fiscal Agent, the Paying Agents, the Calculation Agent, the Redenomination Agent and the Consolidation Agent initially appointed by the Issuer in respect of Dematerialised Notes and their respective specified offices are listed at the end of this Base Prospectus. A Specific Fiscal Agent (acting also as Paying Agent affiliated to Euroclear France, Redenomination Agent and Consolidation Agent) will be, as the case may be, appointed by the Issuer in respect of any series of Materialised Notes.The Fiscal Agent, the Paying Agents, the Redenomination Agent, the Consolidation Agent and the Registration Agent act solely as agents of the Issuer and the Calculation Agent(s) act(s) as independent experts(s) and, in each case such, do not assume any obligation or relationship of agency for any Noteholder or Couponholder. The Issuer reserves the right at any time to vary or terminate the appointment of the Fiscal Agent, any other Paying Agent, the Redenomination Agent, the Consolidation Agent and the Registration Agent or the Calculation Agent(s) and to appoint additional or other Paying Agents, provided that the Issuer shall at all times maintain (i) a Fiscal Agent, (ii) one or more Calculation Agent(s) where the Conditions so require, (iii) a Redenomination Agent and a Consolidation Agent where the Conditions so require, (iv) a Paying Agent affiliated to Euroclear France so long as the Notes are admitted to trading on Euronext Paris and, in either case, so long as the rules applicable to the relevant market so require, (v) in the case of Materialised Notes, a Paying Agent with a specified office in a European Union member state that will not be obliged to withhold or deduct tax pursuant to the European Council Directive 2003/48/EC on the taxation of savings income or any law implementing and complying with, or introduced in order to conform to, such Directive (which may be any of the Paying Agents referred to in (iv) above), (vi) in the case of Dematerialised Notes in fully registered form, a Registration Agent and (vii) such other agents as may be required by the rules of the Regulated Market on which the Notes may be admitted to trading. In addition, the Issuer shall forthwith appoint a Paying Agent in New York City in respect of any Materialised Notes denominated in U.S. Dollars in the circumstances described in paragraph (c) above. On a redenomination of the Notes of any Series pursuant to Condition 1(d) with a view to consolidating such Notes with one or more other Series of Notes, in accordance with Condition 14, the Issuer shall ensure that the same entity shall be appointed as both Redenomination Agent and Consolidation Agent in respect of both such Notes and such other Series of Notes to be so consolidated with such Notes. Notice of any such change or any change of any specified office shall promptly be given to the Noteholders in accordance with Condition 15. (f) Unmatured Coupons and unexchanged Talons (i) (ii) (iii) (iv) Unless Materialised Notes provide that the relative Coupons are to become void upon the due date for redemption of those Notes, Materialised Notes should be surrendered for payment together with all unmatured Coupons (if any) relating thereto, failing which an amount equal to the face value of each missing unmatured Coupon (or, in the case of payment not being made in full, that proportion of the amount of such missing unmatured Coupon that the sum of principal so paid bears to the total principal due) shall be deducted from the Final Redemption Amount, Early Redemption Amount or Optional Redemption Amount, as the case may be, due for payment. Any amount so deducted shall be paid in the manner mentioned above against surrender of such missing Coupon prior to 1 January of the fourth year following the date on which such amount fell due If Materialised Notes so provide, upon the due date for redemption of any such Materialised Note, unmatured Coupons relating to such Note (whether or not attached) shall become void and no payment shall be made in respect of them. Upon the due date for redemption of any Materialised Note, any unexchanged Talon relating to such Note (whether or not attached) shall become void and no Coupon shall be delivered in respect of such Talon. Where any Materialised Note that provides that the relative unmatured Coupons are to become void upon the due date for redemption of those Notes is presented for redemption without all unmatured Coupons, and where any Materialised Note is presented for redemption without any unexchanged - 38-

39 Talon relating to it, redemption shall be made only against the provision of such indemnity as the Issuer may require. (v) If the due date for redemption of any Materialised Note is not a due date for payment of interest, interest accrued from the preceding due date for payment of interest or the Interest Commencement Date, as the case may be, shall only be payable against presentation (and surrender if appropriate) of the relevant Definitive Materialised Note. Interest accrued on a Materialised Note that only bears interest after its Maturity Date shall be payable on redemption of such Note against presentation of the relevant Materialised Notes. (g) Talons On or after the Interest Payment Date for the final Coupon forming part of a Coupon sheet issued in respect of any Materialised Note, the Talon forming part of such Coupon sheet may be surrendered at the specified office of the Fiscal Agent in exchange for a further Coupon sheet (and if necessary another Talon for a further Coupon sheet) (but excluding any Coupons that may have become void pursuant to Condition 10). (h) Non-Business Days 8 TAXATION If any date for payment in respect of any Note or Coupon is not a business day, the Noteholder shall not be entitled to payment until the next following business day nor to any interest or other sum in respect of such postponed payment. In this paragraph, business day means a day (other than a Saturday or a Sunday) (A) (i) in the case of Dematerialised Notes, on which Euroclear France is open for business or (ii) in the case of Materialised Notes, on which banks and foreign exchange markets are open for business in the relevant place of presentation, (B) on which banks and foreign exchange markets are open for business in such jurisdictions as shall be specified as Additional Financial Centres in the relevant Final Terms and (C) (i) (in the case of a payment in a currency other than euro), where payment is to be made by transfer to an account maintained with a bank in the relevant currency, on which foreign exchange transactions may be carried on in the relevant currency in the principal financial centre of the country of such currency or (ii) (in the case of a payment in euro) which is a TARGET Business Day. (a) Tax withholding All payments of principal, interest and other revenue by or on behalf of the Issuer in respect of the Notes shall be made free and clear of, and without withholding or deduction for, any taxes, duties, assessments or governmental charges of whatever nature imposed, levied, collected, withheld or assessed by or within France or any authority therein or thereof having power to tax, unless such withholding or deduction is required by law. (b) Additional Amounts If French law should require that payments of principal or interest in respect of any Note, or Coupon be subject to deduction or withholding in respect of any present or future taxes or duties whatsoever, the Issuer will, to the fullest extent then permitted by law, pay such additional amounts as shall result in receipt by the Noteholders or, if applicable, the Couponholders, as the case may be, of such amounts as would have been received by them had no such withholding or deduction been required, except that no such additional amounts shall be payable with respect to any Note, or Coupon, as the case may be: (i) (ii) Other connection: to, or to a third party on behalf of, a Noteholder or Couponholder who is liable to such taxes or duties, whatsoever in respect of such Note or Coupon by reason of his having some connection with the Republic of France other than the mere holding of the Note, or Coupon; or Presentation more than thirty (30) calendar days after the Relevant Date: in the case of Materialised Notes, more than thirty (30) calendar days after the Relevant Date except to the extent that the Noteholder or Couponholder would have been entitled to such additional amounts on presenting it for payment on the thirtieth calendar day (iii) Payment to individuals or entity conforming to the European Council Directive 2003/48/EC: where such withholding or deduction is imposed on a payment to an individual or an entity conforming to the European Council Directive 2003/48/EC (as amended by the Amended European Council Directive 2014/48/UE dated 24 March 2014) and is required to be made pursuant to the Directive on the taxation of savings income implementing any law or complying with, or introduced in a Member State of the European Union or in a third party State in order to conform to, such Directive; or - 39-

40 (iv) (v) Payment by another Paying Agent: in the case of Materialised Notes, presented for payment by or on behalf of a holder who would have been able to avoid such withholding or deduction by presenting the relevant Note or Coupon to another Paying Agent in a Member State of the EU; or Payment in non-cooperative State or territory: In the case where the Notes would not benefit from an exemption prescribed by the Bulletin Officiel des Finances Publiques-Impôts published on 11 February 2014 (BOI-INT-DG ) paragraph n 990, and a withholding tax would be due because of payment of interests and other related revenues (x) on any account located in a noncooperative State or territory as defined by Article A of the French Code Général des Impôts or (y) to residents of such non cooperative State or territory in accordance with Article 125 A III, 119 bis and 238 A. 9 EVENTS OF DEFAULT References in these Conditions to (i) principal shall be deemed to include any premium payable in respect of the Notes, all Final Redemption Amounts, Early Redemption Amounts, Optional Redemption Amounts and all other amounts in the nature of principal payable pursuant to Condition 6, (ii) interest shall be deemed to include all Interest Amounts and all other amounts payable pursuant to Condition 5 and (iii) principal and/or interests shall be deemed to include any additional amounts that may be payable under this Condition. The Representative (as defined in Condition 11) acting on behalf of the Masse may, upon written notice by registered mail with recorded delivery (with copy to the Fiscal Agent), given on behalf of the Masse before any default has been cured, cause the Notes to become due and payable, whereupon the Notes shall become immediately due and payable, or if Noteholders were not grouped in a masse, all Notes held by such Noteholder having given written notice thereto, at their Early Redemption Amount together with any accrued interest if any of the following events (each an "Event of Default ) shall occur: (a) (b) (c) the Issuer is in default for more than thirty (30) days on the payment of principal of, or interest on, or any other amount in respect of, any Note (including the payment of any additional amounts in accordance with Condition 8), from the date on which such amounts shall become due and payable; the Issuer is in default in the due performance of any other provision of the Notes and such default shall not have been cured within sixty (60) days after receipt by the Fiscal Agent of written notice of default given by the Representative; (i) any bank or bond indebtedness of the Issuer in excess individually or in aggregate of Euro 70 million (or its equivalent in any other currency) in principal is (are) not paid by the Issuer at its (their) stated maturity or as a result of a default thereunder after the expiry of any applicable grace period or (ii) any guarantee(s) given by the Issuer for bank or bond indebtedness of others in excess individually or in aggregate of Euro 70 million (or its equivalent in any other currency) is (are) not honoured when due and called upon; unless in any such event, the Issuer has disputed in good faith that such indebtedness is due and payable or that such guarantees are due and callable and such dispute has been submitted to a competent court, in which case default in payment shall not constitute an event of default hereunder so long as the dispute shall not have been finally adjudicated; Provided that any event contemplated in (a), (b) or (c) above shall not constitute an Event of Default and the periods, if any, referred to above shall be suspended, in the event that the Issuer notifies the Fiscal Agent before the expiry of the relevant period, if any, of the need, in order to cure such defaults, to adopt a budgetary decision for the payment of unforeseen or additional budget expenses in relation to debt service, until (and including) the date on which such budgetary decision is effective. The Issuer shall notify the Fiscal Agent of the date on which such budgetary decision is effective. The Fiscal Agent shall notify the Noteholders of any notification received from the Issuer under this Condition in accordance with Condition PRESCRIPTION All claims against the Issuer in respect of any amounts due under the Notes and Coupons (which for this purpose shall not include Talons) shall be prescribed from 1 January of the fourth year following the date on which such amount fell due

41 11 REPRESENTATION OF NOTEHOLDERS Except as otherwise provided by the relevant Final Terms, Noteholders will, in respect of all Tranches in any Series, be grouped automatically for the defence of their common interests in a masse (in each case, the Masse ). The Masse will be governed by the provisions of the French Code of commerce with the exception of Article L , Article L (paragraph 1), Article L , Article R and Article R and subject to the following provisions: (a) Legal Personality The Masse will be a separate legal entity and will act in part through a representative (the Representative ) and in part through a general meeting of the Noteholders (the General Meeting ). The Masse alone, to the exclusion of all individual Noteholders, shall exercise the common rights, actions and benefits which now or in the future may accrue respectively with respect to the Notes. (b) Representative The office of Representative may be conferred on a person of any nationality. However, the following persons may not be chosen as Representatives: (i) (ii) the Issuer, the members of its Conseil Général or its employees as well as their ascendants, descendants and spouse; or companies guaranteeing all or part of the obligations of the Issuer, their respective managers (gérants), general managers (directeurs généraux), members of their Board of Directors (Conseil d'administration), Executive Board (Directoire), or Supervisory Board (Conseil de Surveillance), their statutory auditors, or employees as well as their ascendants, descendants and spouse; or (iii) persons to whom the practice of banker is forbidden or who have been deprived of the right of directing, administering or managing an enterprise in whatever capacity. The names and addresses of the initial Representative of the Masse and its alternate will be set out in the relevant Final Terms. The Representative appointed in respect of the first Tranche of any Series of Notes will be the Representative of the single Masse of all Tranches in such Series. The Representative will be entitled to such remuneration in connection with its functions or duties, payable on such date(s), as set out in the relevant Final Terms. In the event of death, retirement or revocation of appointment of the Representative, such Representative will be replaced by the alternate Representative. In the event of the death, retirement or revocation of appointment of the alternate Representative, an alternate will be elected by the General Meeting. All interested parties will at all times have the right to obtain the names and addresses of the Representative and the alternate Representative at the head office of the Issuer and the specified offices of any of the Paying Agents. (c) Powers of the Representative The Representative shall (in the absence of any decision to the contrary of the General Meeting) have the power to take all acts of management necessary in order to defend the common interests of the Noteholders. All legal proceedings against the Noteholders or initiated by them, must be brought by or against the Representative. The Representative may not interfere in the management of the affairs of the Issuer. (d) General Meeting A General Meeting may be held at any time, on convocation either by the Issuer or by the Representative. One or more Noteholders, holding together at least one-thirtieth of the principal amount of the Notes outstanding, may address to the Issuer and the Representative a demand for convocation of the General Meeting. If such General Meeting has not been convened within two months after such demand, the Noteholders may commission one of their members to petition a competent court in Paris to appoint an agent (mandataire) who will call the General Meeting

42 Notice of the date, time, place and agenda of any General Meeting will be published as provided under Condition 15. Each Noteholder has the right to participate in a General Meeting in person, by proxy or by correspondance. Each Note carries the right to one vote or, in the case of Notes issued with more than one Specified Denomination, one vote in respect of each multiple of the lowest Specified Denomination comprised in the principal amount of the Specified Denomination of such Note. (e) Powers of the General Meetings The General Meeting is empowered to deliberate on the dismissal and replacement of the Representative and the alternate Representative and also may act with respect to any other matter that relates to the common rights, actions and benefits which now or in the future may accrue with respect to the Notes, including authorising the Representative to act at law as plaintiff or defendant. The General Meeting may further deliberate on any proposal relating to the modification of the Conditions including any proposal, whether for arbitration or settlement, relating to rights in controversy or which were the subject of judicial decisions, it being specified, however, that the General Meeting may not increase amounts payable by Noteholders, nor establish any unequal treatment between the Noteholders. General Meetings may deliberate validly on first convocation only if Noteholders present or represented hold at least a fifth of the principal amount of the Notes then outstanding. On second convocation, no quorum shall be required. Decisions at meetings shall be taken by a two-third majority of votes cast by Noteholders attending such General Meetings or represented thereat. Decisions of General Meetings must be published in accordance with the provisions set forth in Condition 15. (f) Information to Noteholders Each Noteholder or Representative thereof will have the right, during the 15-day period preceding the holding of each General Meeting, to make a copy of the text of the resolutions which will be proposed and of the reports which will be presented at the General Meeting, all of which will be available for inspection by the relevant Noteholders at the registered office of the Issuer, at the specified offices of any of the Paying Agents and at any other place specified in the notice of the General Meeting. (g) Expenses The Issuer will pay all expenses relating to the operation of the Masse, including expenses relating to the calling and holding of General Meetings and, more generally, all administrative expenses resolved upon by the General Meeting, it being expressly stipulated that no expenses may be imputed against interest payable under the Notes. (h) Single Masse 12 MODIFICATIONS The Noteholders of Notes of the same Series, and the holders of Notes of any other Series which have been assimilated with the Notes of such first-mentioned Series in accordance with Condition 14, shall, for the defence of their respective common interests, be grouped in a single Masse. The Representative appointed in respect of the first Tranche of any Series of Notes will be the Representative of the single Masse of all such Series. In this Condition 11, the expression "outstanding" (as defined in Condition 4) does not include the Notes subscribed or purchased by the Issuer in accordance with Article L A of the French Code monétaire et financier which are held by the Issuer and not cancelled. The Issuer may, without the consent of the holder of any Note or Coupon make any changes or additions to any provisions of the Final Terms related to a particular Series, to correct a manifest error contained in such Final Terms in so far as according to its reasonable opinion, it believes such changes are not prejudicial to the interests of the relevant Noteholders or Couponholders. The Agency Agreement will be capable of amendment or waiver by the parties thereto, without the consent of Noteholders or Couponholders, for the purpose of curing any ambiguity or of curing, correcting or supplementing any defective provision contained therein or in any manner which the parties to the Agency Agreement mutually deem necessary or desirable and which does not, in the reasonable opinion of such parties, adversely affect the interests of the Noteholders or Couponholders

43 13 REPLACEMENT OF DEFINITIVE MATERIALISED NOTES, COUPONS AND TALONS If, in the case of any Materialised Notes, a Definitive Materialised Note, Coupon or Talon is lost, stolen, mutilated, defaced or destroyed, it may be replaced, subject to applicable laws, regulations and stock exchange regulations, at the specified office of the Fiscal Agent or such other Paying Agent as may from time to time be designated by the Issuer for the purpose and notice of whose designation is given to Noteholders, in each case on payment by the claimant of the fees and costs incurred in connection therewith and on such terms as to evidence, security and indemnity (which may provide, inter alia, that if the allegedly lost, stolen or destroyed Definitive Materialised Bearer Note, Coupon or Talon is subsequently presented for payment or, as the case may be, for exchange for further Coupons, there shall be paid to the Issuer on demand the amount payable by the Issuer in respect of such Definitive Materialised Notes, Coupons or further Coupons) and otherwise as the Issuer may require. Mutilated or defaced Materialised Notes, Coupons or Talons must be surrendered before replacements will be issued. 14 FURTHER ISSUES AND CONSOLIDATION (a) Further Issues The Issuer may from time to time without the consent of the Noteholders, or Couponholders create and issue further notes to be assimilated (assimilées) with existing Notes and form a single Series provided such Notes and the further notes carry rights identical in all respects (or in all respects save for the issue date, the issue price and the first payment of interest specified in the relevant Final Terms) and that the terms of such further notes provide for such assimilation and references in these Conditions to Notes shall be construed accordingly. (b) Consolidation 15 NOTICES The Issuer may, with the prior approval of the Redenomination and Consolidation Agent, from time to time on any Interest Payment Date occurring on or after the date specified for a redenomination of the Notes pursuant to Condition 1 (d) on giving not less than 30 days' prior notice to the Noteholders in accordance with Condition 15, without the consent of the Noteholders or Couponholders, consolidate the Notes of one Series with the Notes of one or more other Series issued by it, whether or not originally issued in one of the European national currencies or in euro, provided such other Notes have been redenominated in euro (if not originally denominated in euro) and which otherwise have, in respect of all periods subsequent to such consolidation, the same terms and conditions as the Notes. (a) (b) (c) Notices to the holders of Dematerialised Notes in registered form (au nominatif) shall be valid if either, (i) they are mailed to them at their respective addresses, in which case they will be deemed to have been given on the fourth (4 th ) Business Day after the mailing, or, (ii) at the option of the Issuer, they are published in a leading economic and financial daily newspaper of general circulation in Europe (which is expected to be the Financial Times); provided that, so long as such Notes are admitted to trading on any Regulated Market and the rules of such market so require, notices shall be valid if published in a leading economic and financial daily newspaper with general circulation in the city/ies where the regulated market on which such Notes is/are admitted to trading which in the case of Euronext Paris is expected to be les Echos, and it any other manner required, as the case may be, by the rules applicable to such market. Notices to the holders of Materialised Notes and Dematerialised Notes in bearer form (au porteur) shall be valid if published in a leading economic and financial daily newspaper of general circulation in Europe (which is expected to be the Financial Times) and so long as such Notes are admitted to trading on any market (regulated or not), and so long as the rules applicable to the relevant market so require, in a leading economic and financial daily newspaper with general circulation in the city/ies where the regulated market on which such Notes is/are admitted to trading which in the case of Euronext Paris, is expected to be Les Echos, and it any other manner required, as the case may be, by the rules applicable to such market If any such publication is not practicable, notice shall be validly given if published in a leading economic and financial daily English language newspaper with general circulation in Europe, and for the avoidance of doubt, insofar as the Notes remain admitted to trading on any Regulated Market, notices should be published in any other manner as may be required by the rules applicable to such Regulated Market. Any such notice shall be deemed to have been given on the date of such publication or, if published more than once or on different dates, on the date of the first publication as provided above. Couponholders shall be deemed for all purposes to have notice of the contents of any notice given to the holders of Materialised Notes in accordance with this Condition

44 (d) Notices required to be given to the holders of Dematerialised Notes (whether in registered or in bearer form) (au porteur or au nominatif) pursuant to these Conditions may be given by delivery of the relevant notice to the Euroclear France, Euroclear, Clearstream, Luxembourg and any other clearing system through which the Notes are for the time being cleared in substitution for the mailing and publication as required by Conditions 15 (a), (b), (c), above; except that (i) so long as such Notes are admitted to trading on any Regulated Market and the applicable rules of that market so require, notices shall also be published in a leading economic and financial daily newspaper with general circulation in the city/ies where the market on which such Notes is/are admitted to trading which in the case of Euronext Paris is expected to be Les Echos, and it any other manner required, as the case may be, by the rules applicable to such market and (ii) notices relating to the convocation and decision(s) of the General Meetings pursuant to Condition 11 shall also be published in a leading economic and financial newspaper of general circulation in Europe. 16 GOVERNING LAW, LANGUAGE AND JURISDICTION (a) Governing Law The Notes (and, where applicable, the Coupons and the Talons) and the Agency Agreement are governed by, and shall be construed in accordance with, French law. (b) Language This Base Prospectus has been prepared in English and in French but only the French version approved by the AMF shall be regarded as binding. (c) Jurisdiction Any claim against the Issuer in connection with any Notes, Coupons or Talons and the Agency Agreement may be brought before any competent court in Paris (subject to the application of the laws governing the jurisdiction of the French courts). Nevertheless the Issuer is not subject to enforcement proceedings and its assets are exempt from seizure - 44-

45 TEMPORARY GLOBAL CERTIFICATES ISSUED IN RESPECT OF MATERIALISED NOTES Temporary Global Certificates A Temporary Global Certificate, without interest Coupons, will initially be issued in connection with Materialised Notes. Upon the initial deposit of such Temporary Global Certificate with a common depositary for Euroclear and Clearstream, Luxembourg (the Common Depositary ), Euroclear or Clearstream, Luxembourg will credit the account of each subscriber with a nominal amount of Notes equal to the nominal amount thereof for which it has subscribed and paid. The Common Depositary may also credit with a nominal amount of Notes the accounts of subscribers with (if indicated in the relevant Final Terms) other clearing systems through direct or indirect accounts with Euroclear and Clearstream, Luxembourg held by such other clearing systems. Conversely, a nominal amount of Notes that is initially deposited with any other clearing system may similarly be credited to the accounts of subscribers with Euroclear, Clearstream, Luxembourg or other clearing systems. Exchange Each Temporary Global Certificate issued in respect of Materialised Notes will be exchangeable, free of charge to the holder, on or after its Exchange Date (as defined below), in whole, but not in part, for the Definitive Materialised Notes, upon (unless the relevant Final Terms indicates that such Temporary Global Certificate is issued in compliance with the C Rules or in a transaction to which TEFRA is not applicable (as to which, see Summary of the Programme - Selling Restrictions )) certification as to non-u.s. beneficial ownership in the form set out in the Agency Agreement. Delivery of Definitive Materialised Notes On or after its Exchange Date, the holder of a Temporary Global Certificate may surrender such Temporary Global Certificate to or to the order of the Fiscal Agent. In exchange for any Temporary Global Certificate, the Issuer will deliver, or procure the delivery of, an equal aggregate nominal amount of duly executed and authenticated Definitive Materialised Notes. In this Base Prospectus, Definitive Materialised Notes means, in relation to any Temporary Global Certificate, the Definitive Materialised Notes for which such Temporary Global Certificate may be exchanged (if appropriate, having attached to them all Coupons and that have not already been paid on the Temporary Global Certificate and a Talon). Definitive Materialised Notes will be security printed in accordance with any applicable legal and stock exchange requirements in or substantially in the form set out in the Schedules to the Agency Agreement. Exchange Date Exchange Date means, in relation to a Temporary Global Certificate, the day falling after the expiry of forty (40) calendar days after its issue date, provided that, in the event any further Materialised Notes are issued prior to such day pursuant to Condition 14(a), the Exchange Date shall be postponed to the day falling after the expiry of forty (40) calendar days after the issue of such further Materialised Notes

46 USE OF PROCEEDS The net proceeds of the issue of the Notes will be used to finance the Issuer's investments unless otherwise specified in the relevant Final Terms

47 DESCRIPTION OF DEPARTEMENT DE L'ESSONNE I - PERSONS RESPONSIBLE FOR THE INFORMATION IN THE BASE PROSPECTUS 54 Page II - GENERAL INFORMATION ABOUT THE ISSUER 54 A) INSTITUTIONAL AND POLITICAL ORGANISATION OF THE ISSUER A LOCAL GOVERNMENT AUTHORITY RESULTING FROM DECENTRALISATION A SPECIFIC INSTITUTIONAL ORGANISATION AND WAY OF WORKING 55 a) The deliberative assembly: the General Council 55 b) The executive power: the President of the General Council, Vice Presidents, Delegate Presidents and delegated councillors 3. SCOPE OF COMPETENCE LOCAL GOVERNMENT RELATIONS WITH CENTRAL GOVERNMENT 59 a) Legality control 59 b) Financial control 60 c) Financial relations with central government 60 d) The procedure for ex officio entry and ordering of payment by the Prefect DEPARTMENTAL POLICIES 61 B) ECONOMIC ASPECTS ESSONNE, A DYNAMIC DEPARTMENT PARTICIPATING IN THE METROPOLITAN ROLE OF ILE-DE- 65 FRANCE a) A department with over a million inhabitants 65 b) Full participation in the metropolitan role of Ile-de-France 66 c) A dynamic economy dominated by the service and knowledge sectors 66 d) An essential link in the south Ile-de-France Innovation Cone A LONG-TERM GOAL: ESSONNE C) FINANCIAL RESOURCES FOR THE DEPARTMENT S ACTIONS STABLE INCOME LEVERAGE OF LOCAL SEMI-PUBLIC COMPANIES 75 a) SEMARDEL 75 b) SEM GÉNOPOLE 75 c) SEM VIDÉOCABLE 91 (TÉLESSONNE) 76 d) ESSONNE AMÉNAGEMENT THE DEPARTMENT S FINANCIAL RATING 77 III FINANCIAL INFORMATION 77 A) CONSOLIDATED FINANCIAL ANALYSIS ADMINISTRATIVE ACCOUNTS CHANGES IN THE OPERATING SECTION 81 a) Operating revenues up 81 b) Ordinary running expenses CHANGES IN THE INVESTMENT SECTION 84 a) Investment revenues 84 b) Investment expenses B) THE LOCAL AUTHORITY S 2013 BUDGET APPROPRIATION THE DEPARTMENT, UNDERPINNING SOLIDARITY 87 a) Social action policies 87 b) Social inclusion policies 88 c) Education policies 89 d) Spacial planning policies 90 e) Transportation policy

48 2. THE DEPARTMENT, AT THE HEART OF A BETTER SOCIETY 91 a) Environment policy 91 b) Cultural policy 91 c) Sports, leisure and voluntary sector policy 91 d) Public safety policy REVENUES CONSTRAINED BUT NO RESORT TO ADDITIONAL TAXATION 92 C) DEBT AND CASH MANAGEMENT BUILT ON ZERO CASH PRINCIPLES 93 a) Banking instruments used for cash management in b) A commercial paper programme with an average of 6.74 million outstanding in 2013 (versus 39.5 million in 2012) DEBT POSITION AT 31 DECEMBER a) Breakdown of and changes in outstanding debt 99 b) Interest rate risk management : a major aspect of the financial strategy 99 c) Arbitrage between fixed rates and floating rates as well as between the various 99 indexes d) Hedging interest rate risk (swaps) DYNAMIC BREAKDOWN OF OUTSTANDING DEBT INTO FIXED RATES AND FLOATING RATES CHANGE IN OUTSTANDING DEBT FROM 200 TO DEBT REPAYMENT PROFILE 106 D) DEPARTMENTAL LOAN GUARANTEES 108 E) DISPUTES 109 F) RECENT EVENTS

49 I. PERSONS RESPONSIBLE FOR THE INFORMATION IN THE BASE PROSPECTUS Issuer: The Issuer is the Essonne Department, a local government authority (collectivité territoriale). Address of the Issuer's seat of government: The Issuer's seat of government is located at Hôtel du Département, Boulevard de France, Evry Cedex, France. The Issuer's telephone number is +33 (0) Persons Responsible: Bastien Sayen Director of Finance and Public Procurement Tel. +33 (0) By deliberation no A-2 of 31 March 2011, the Essonne General Council delegated authority to its President for the purpose of securing departmental loans, throughout the term of his office and within the limit of the amounts entered and authorised each year in the budget, pursuant to Article L of the General Local Authorities Code (Code général des collectivités territoriales). By decisions no ARR-SG-0859 of 20 November 2012 and no ARR-SG-0862 of 20 November 2012, the President of the General Council delegated respective powers to Fabien Tastet, Director General of Departmental Services, and Laurent Combaud, Deputy Director General of Administration and Interim Resources, to sign all contracts, instruments, decisions and correspondence regarding the setting up of the Essonne Department's EMTN programme and its follow-up, as well as issuing bonds or carrying out private investments as decided by deliberation no A-2 of 31 March By decision no ARR-SG-0352 of 27 May 2013 updating decision no ARR-SG-0030 of 23 January 2013, the President of the General Council delegated powers to Bastien Sayen, Director of Finance and Public Procurement, to sign all contracts, instruments, decisions and correspondence regarding the setting up of the Essonne Department's EMTN programme, as well as issuing bonds or carrying out private investments consequent thereto. Declaration by Persons Responsible: We hereby certify, having taking all reasonable measures to such effect, that the information contained in this Base Prospectus is, to our knowledge, accurate and contains no omission of such a nature as to change its scope. The accounts of the Essonne Department are not subject to any statutory or regulatory obligation to be certified by an auditor. They are approved each year by the General Council before 30 June, in the administrative account tracing actual income and expenditure for each financial year. This account must be consistent with the management account drawn up by the public accounting officer responsible for settling the Issuer's expenses and collecting all its income. The administrative account of the Essonne Department for 2013 was approved by the General Council at a public meeting on 30 June II. GENERAL INFORMATION ABOUT THE ISSUER A - INSTITUTIONAL AND POLITICAL ORGANISATION OF THE ISSUER 1. A local government authority resulting from decentralisation The institutional history of the Essonne Department is closely linked to decentralisation, i.e. the transfer of responsibility from central government to separate institutions administered by officials elected by the population at local level. The Essonne Department was created by an Act dated 10 July 1964 and, like all French Departments until the Decentralisation Acts of 1982, was not a local government authority in its own right. In fact, the role of local government was split so that the Prefect executed decisions taken by the local assembly of general councillors elected by direct universal suffrage. He/she was assisted in this by central government departments. The President of the General Council had only an honorary and representational role. The sweeping Decentralisation Acts of 1982, now codified in the General Local Authorities Code, raised the status of the Essonne Department to that of a local government authority in its own right, by making two changes: - 49-

50 - Firstly, the Act of 2 March 1982 transferred executive power to the President of the General Council. Consequently, since then the Prefect's role has been limited to representing central government and its various services in the Department. - Secondly, the Act of 2 March 1982 removed administrative tutelage: decisions taken by the General Council and its President now become executory on the sole condition of having been published and forwarded to the Prefect. Then, the Acts of 7 January and 22 July 1982 concerning the division of responsibilities between municipalities, departments, regions and central government transferred a number of responsibilities to the Essonne General Council, including the management of mandatory social benefits and the construction, maintenance and renovation of junior high schools (collèges). Today, the status of the General Council is determined both by the relevant provisions in the Constitution (e.g. Article 72 of the Constitution of 4 October 1958 establishing the principle of the self-governance of local government authorities), and by the legislative and regulatory provisions laid down in the General Local Authorities Code. The shift towards decentralisation moved another step forward with the adoption of the Constitutional Act of 28 March 2003 on the decentralised organisation of the Republic and that of 13 August 2004 on local freedoms and responsibilities, which implemented the transfer of further responsibilities to the General Council, such as the management of technical staff in junior high schools and the maintenance of some national roads. These successive reforms were supplemented by the Act of 17 May 2013 abolishing the "territorial councillor" established by the Act of 16 December 2010, dividing the number of administrative districts (cantons) in two and replacing the general councillors with departmental councillors, elected from 2015 in two-person teams of one man and one woman, by means of a two-round, first past the post system. 2. A specific institutional organisation and way of working a. The deliberative assembly: the General Councill The Essonne General Council is composed of 42 members elected by direct universal suffrage, half of whom were elected for a sixyear term at the 2008 renewal and the other half for a three-year term at the last vote in 2011, pursuant to Act no of 16 December 2010 on the reform of local government. However, pursuant to Act of 17 May 2013 and by way of derogation from the provisions of the Electoral Code, the terms of office of general councillors elected in March 2008 and in March 2011 will expire in March It should be noted that pursuant to Act no of 17 May 2013, departmental councillors will replace general councillors from March 2015 onwards and that the General Council will, from then on, become the Departmental Council. General Council: 42 members Departmental majority: 26 members Socialist, Ecologist and Republican Group President: Patrice Sac 22 members Left Front Group President: Marjolaine Rauze 4 members Opposition: 16 members Union for a Popular Movement and Partners (UMPA) Group President: Jean-Pierre Delaunay 12 members Union for Essonne Group President: Thomas Joly 4 members The General Council is the Department's deliberative assembly. It meets at least once a quarter and votes on the most important decisions (e.g. the budget, master plans, etc.). In order to ensure continuity of the Department's actions between each plenary session of the General Council, the Standing Committee, a collegial body composed of all members of the General Council since the March 2008 renewal, meets on average every two weeks. Four technical committees examine and issue opinions on the reports submitted by the President one week before their presentation to the General Council and Standing Committee. Each committee deals with its own sectors. - 1 st Committee: Departmental resources - 2 nd Committee: Solidarity, social innovation and the fight against discrimination - 3 nd Committee: Education and citizenship - 4 nd Committee: Sustainable planning and development - 50-

51 b. The executive power: the President of the General Council, Vice Presidents, Delegate Presidents and delegated councillors The President of the General Council acts on behalf of the Department. He/she disposes of his/her own powers and powers delegated to him/her by the General Council. He/she is elected by the General Council for a three-year term at each three-yearly renewal and is the executive branch of the Department. The President leads the work of the assembly, prepares decisions and oversees their execution. He/she is supported in this respect by the departmental services, which he/she heads. The President of the General Council is Jérôme Guedj (Socialist Party). He is assisted by 12 Vice Presidents and four Delegated Presidents, who have had responsibilities delegated to them, each in a specific field of departmental action. Since the March 2011 renewal, the Vice Presidents of the Essonne General Council are: Francis Chouat Marjolaine Rauze Carlos Da Silva Claire Robillard Guy Bonneau Jérôme Cauet Romain Colas 1 st Vice President, in charge of employment, the economy and spatial planning. 2 nd Vice President, in charge of solidarity and health 3 rd Vice President, in charge of finance and departmental public services 4 th Vice President, in charge of sustainable and socially inclusive development, the environment and agriculture 5 th Vice President, in charge of integration, the social and socially supportive economy and new jobs 6 th Vice President, in charge of families, child protection and social action 7 th Vice President, in charge of social and urban cohesion and decentralised cooperation Gérard Funes David Ros Pascal Fournier 8 th Vice President, in charge of partnerships with other local authorities 9 th Vice President, in charge of innovation, research, higher education and international relations 10 rd Vice President, in charge of transport and public infrastructure Frédéric Petitta 11 th Vice President, in charge of housing and accommodation Bruno Pirou The Delegated Presidents are, in alphabetical order: 12 th Vice President, in charge of young people and citizenship Patrice Sac Edouard Fournier Gérald Hérault Didier Hoeltgen Delegated President, in charge of education and junior high schools Delegated President, in charge of new technologies and local democracy Delegated President, in charge of the evaluation of public policies Delegated President, in charge of the voluntary sector The General Councillors with specifically delegated responsibilities are, in alphabetical order: Claire Lise Campion General Councillor delegated to the 1 st Vice President, in charge of Mission Sud-Essonne Clothilde Buffone General Councillor delegated to the 6 th Vice President, in charge of adoption and young children Fatoumata Koïta Delegated General Councillor in charge of academic achievement - 51-

52 Maud Oliver Michel Pouzol Delegated General Councillor in charge of the fight against discrimination and the promotion of equal rights Delegated General Councillor in charge of sport Paul Da Silva Delegated General Councillor in charge of tourism and war veterans Stéphane Raffali Delegated General Councillor in charge of culture 3. Scope of competence Article L of the General Local Authorities Code (Code général des collectivités territoriales) provides that the general council deliberates and rules on matters concerning the department. It makes decisions regarding all subjects which the statutes and regulations require it to deliberate on and, in general, regarding all subjects of departmental interest brought before it. The Council can, therefore, without acting outside its remit, take action in any field of departmental interest, even if no specific text recognises its authority to deal with the subject in question. Further, the third paragraph of Article L of the General Local Authorities Code lays down the principle according to which municipalities, departments and regions finance first and foremost those projects falling within those areas of authority devolved to them by statute (...). The General Council's responsibilities thus stem from the following: - Decentralisation Acts: o o Act of 7 January and 22 July 1983 on the transfer of powers, Act of 13 August 2004 on local freedoms and responsibilities, - Sectoral Acts: o o o Act of 20 July 2001 on the personal care allowance (allocation personnalisé pour l'autonomie), Act of 18 December 2003 generalising the management of the minimum income allowance / minimum working income (RMI/RMA) by departments, Act of 3 December 2008 transferring the management of the earned income supplement (RSA) to General Councils as of 1 st July 2009 Since the 1982 Decentralisation Acts, the General Council has had primary authority with regard to solidarity (social assistance and action), the construction and maintenance of junior high schools and departmental roads. The Act of 13 August 2004 confirmed this status with three provisions: - Article 49, which recognises the General Council as the leading player in social action. It defines, coordinates and implements social action policy in the department, taking into account those areas of authority entrusted by statute to central government, to other local authorities and to the social security bodies. - The gradual transfer to departments of personnel in charge of reception, catering, accommodation and general and technical maintenance in junior high schools (1,079 personnel integrated as at 31 December 2008); - The transfer to departments of part of the national road network of predominantly local interest (240 km), with central government retaining only the national, backbone network. Financial compensation: - a portion of the proceeds of the domestic tax on oil products (TIPP), officially renamed the domestic consumption tax on energy products (TICPE) in 2011, within the framework of the transfer of the management of the RMI; - the special tax on insurance contracts (TSCA). The table on p. 6 entitled "Departmental Policies" summarises all the areas in which the General Council intervenes, indicating the main objectives and the systems set up in each case

53 4. Departmental government As of 31 December 2013, the Essonne Department employed 4,416 people (excluding IDEF) 1 across its various units. They are coordinated by the Directorate General for Services, which oversees the operational implementation of the Department's policies. The transfer of powers provided for in the Act of 13 August 2004 has led to an increase in departmental personnel, through the integration or secondment of personnel from the national educational system (1,079 staff) and from the Ministry for Infrastructure (135 staff). The various services are responsible for preparing and executing decisions taken by councillors at Plenary or Standing Committee meetings. The departmental services were reorganised in 2001 and are now organised into six main areas of responsibility, each headed up by a Deputy Director General: - Deputy Director General for Administration and Resources - Deputy Director General for Solidarity - Deputy Director General for Citizenship and Quality of Life - Deputy Director General for Infrastructure and the Environment - Deputy Director General for Regional Planning and Development The 20 operational divisions are served by six cross-functional divisions. The departmental services' actions are presented in the activity report, which is available on the General Council's website: Essonne.fr 1 Permanent and temporary staff and family assistants as of 31 December 2013 (source 2013 Social Audit). (IDEF Departmental Children & Family Institute: 194 staff as of 31 December 2013) - 53-

54 *ORGANISATIONAL STRUCTURE OF THE DEPARTMENTAL SERVICES PRESIDENT OF THE GENERAL COUNCIL Office of the President General secretariat DIRECTORATE GENERAL FOR SERVICES Department for Communication and Information Deputy Director General for Solidarity Department for social development and preventive healthcare Department for mother and child protection Department for childhood protection and early intervention Department for integration, combating exclusion and employment Department for the elderly and people with disabilities Department for preventive healthcare, resources hub Deputy Director General for Citizenship and Quality of Life Department for education and junior high schools Department for urban affairs, accommodation and citizenship Housing solidarity fund Department for culture Department for sport, youth affairs and the voluntary sector Department for archives and movable heritage Commission for sustainable and socially inclusive development Deputy Director General for Infrastructure and the Environment Department for construction and buildings Department for transportation Department for the environment Deputy Director General for Spatial Planning and Regional Development Department for spatial planning and development Department for economic development and research Department for local authority relations 5. RELATIONS WITH CENTRAL GOVERNMENT Although decentralisation has increased the powers and responsibilities devolved to the Essonne General Council, the fact that local authorities are subject to certain controls shows the unified nature of the French State. a. Legality control The Act of 2 March 1982 substitutes approval or cancellation by the Prefect by a posteriori legality control. This legality control no longer concerns the desirability of local measures. This control is partly judicial, insofar as the Administrative Court is henceforth solely competent to set aside local government decisions

55 The Act of 22 July 1982 distinguishes between two categories of decisions subject to legality control: - decisions that must be forwarded to the Prefect, considered to be the most important (e.g. General Council deliberations, public works and other departmental contracts, loans, etc.), the complete list of which is fixed by legislation; these become executory after they have been published or notified and forwarded to the Prefect; - decisions that do not have to be forwarded to the Prefect (e.g. jobs created in response to occasional or seasonal needs); these become executory automatically once they have been published or notified. Thus, if the Prefect considers that a decision does not comply with the law and regulations in force, he may, within two months from the date on which he received the decision, refer it to the Administrative Court of Versailles. b. Financial control The Department's budgetary decisions are also subject to threefold budgetary control by the Ile-de-France Regional Chamber of Accounts (CRC) and the departmental Paymaster. It should be noted that the Department's accounts are not subject to any legal or regulatory obligation to be certified by an auditor. Firstly, the CRC oversees the budget and puts forward to the Prefect solutions to implement in the event that: - the budget is not adopted by the statutory deadline (31 March at the latest); - the budget adopted is not balanced; - the administrative account shows a deficit; - the Department has failed to include one or several obligatory expenses in its budget (e.g. payment of interest on loans). The CRC also carries out a judicial type of control to ensure that operations carried out by the departmental Paymaster (or public accounting officer) have been conducted properly. The departmental Paymaster is a Treasury official and is the General Council's accounting officer. He/she is responsible for collecting income and settling expenses after verification. He/she fulfils the role of financial controller for the members of the Council. A second accounting and financial services agreement is currently in preparation, the aim of which is to modernise relations between the Paymaster services and those of the General Council. It is due to be signed in the second half of The CRC gives discharge to the public accounting officer if the accounts are in order. Finally, the CRC carries out a management control, with the aim verifying the quality and proper conduct of the Department's management and use of resources and the effectiveness of its actions. c. Financial relations with central government The national tax authorities determine the local tax base in Essonne (by calculating, in particular, the rental value of taxable premises). Using this tax base and the rates adopted by the General Council, they then inform the latter of how much income it will receive. In particular, central government guarantees that the General Council will receive the full amount of its tax income as notified, whatever the amount actually collected. In this respect, each month it advances one twelfth of the amount of tax adopted. In return for the foregoing, the Loi Organique relative aux Lois de Finances (LOLF, constitution bylaw on Budget Acts) requires that the Department, like all other French local government authorities, place its available funds in a non-remunerated Treasury demand deposit account. The Constitutional Act of 28 March 2003 on the decentralised organisation of the Republic, added Article 72-2 to the Constitution, stipulating: "Whenever powers are transferred between central government and local government, revenue equivalent to that given over to the exercise of those powers shall also be transferred. Whenever the effect of newly created or extended powers is to increase the expenditure to be borne by local government, revenue as determined by statute shall be allocated to said communities. ". Thus, part of the cost of the transfer of powers borne by the departments as a result of the Act of 13 August 2004 was covered by the sharing of a portion of the domestic tax on oil products (TIPP), officially renamed the domestic consumption tax on energy products (TICPE) in 2011, and the special tax on insurance contracts (TSCA). d. The procedure for ex officio entry and ordering of payment by the Prefect The Department's creditors benefit from the system created by Article 1 - II of Act no of 16 July 1980 on administrative penalties and the execution of rulings by public authorities. Under the terms of this Act (codified in part in Articles L and L of the General Local Authorities Code), when a court's res judicata ruling orders a local authority to pay a sum of money the amount of which is fixed in the ruling itself, said sum must be paid by money order within two months from the date of notification of the court ruling. If the order to pay is not issued - 55-

56 within this time limit, the Prefect issues an order for payment ex officio. Furthermore, in the event of insufficient funds, the Prefect sends the local authority formal notice to create the necessary resources; if the local authority's deliberative body fails to find or create such resources within the time limit stipulated in the formal notice, the Prefect enters the sums owed ex officio, by obtaining the necessary funds: - either by reducing the funds allocated to other expenses and still available; - or by increasing the income of the local authority in question; - or by a combination of the above. The obligatory nature of the repayment of the debt thus constitutes strong legal protection for lenders, further reinforced by the possibility for creditors to render the State liable for gross negligence in the event the Prefect fails to implement the ex officio payment procedure (Cf. Council of State, 18 November 2005, Société Fermière Campoloro, no ). This implicit guarantee system is justified by the principle that the assets of French public authorities cannot be attached. By virtue of this principle, as the Issuer is a local authority, it cannot be subject to methods of execution under ordinary law, such as the attachment of its assets. In effect, Article L of the General Public Property Code stipulates that: "the assets of the public authorities indicated in Article L. 1 may not be attached". Finally, the Council of State (in the aforementioned Compoloro ruling) considers that under the Act of 16 July 1980, the legislator also wished to give the prefect the power to force the sale of assets constituting a local authority's private property in order to enable execution of a court ruling and satisfy said local authority's creditors. 6. DEPARTMENTAL POLICIES SCOPE OF COMPETENCE POLICIES GUIDELINE DOCUMENTS MAIN OBJECTIVES KEY MEASURES Children and families Departmental plan for children and families ( ) Parental support, prevention, improvement of child protection, quality of types of childcare facilities Child welfare (Aide Sociale à l'enfance, or ASE), family social workers, mother and child protection (Protection Maternelle et Infantile, or PMI), increase in the number of nursery places. SOCIAL ACTION People with disabilities Departmental plan for people with disabilities ( ) approved on 23 March 2013 Encourage social integration, tailor the offer of services to the individual's background and the nature of their disability Increase in the number of places in medicalised homes, Disability Benefit (Prestation de Compensation du Handicap, or PCH), steering of the Maison Départementale des Personnes Handicappées de l'essonne public interest group Elderly people Departmental plan for the elderly ( ) Enabling elderly people to carry on living at home, financial assistance for accommodating elderly people in nursing homes Personal care allowance (Allocation Personnalisée d'autonomie, or APA), funding of Local Information and Coordination Centres (CLIC), increase in number of places available in establishments - 56-

57 SCOPE OF COMPETENCE POLICIES GUIDELINE DOCUMENTS MAIN OBJECTIVES KEY MEASURES Integration / employment / solidarity Departmental plan for integration, the fight against exclusion and for employment ( ) Encourage the professional integration of groups of people excluded from the job market, fight against all forms of exclusion Minimum income allowance (RMI), minimum working income (RSA), funding of subsidised employment contracts (emplois tremplins and contrats d'avenir), housing solidarity fund (Fonds de Solidarité pour le Logement) SOCIAL INTEGRATION Young people Encourage young people to be autonomous and responsible Departmental youth assistance fund, Carte Jeune 91, support for local schemes Youth innovation fund (Fonds Innovation Jeunesse) Urban policy Encourage social diversity and access to housing for all Support for the creation of social housing, contribution to the renovation of sites under the national urban renovation agency (Agence Nationale de Rénovation Urbaine, or ANRU) Support for projects to improve the quality of life in neighbourhoods EDUCATION / JUNIOR HIGH SCHOOLS EDUCATION / JUNIOR HIGH SCHOOLS Multi-year programme for the restructuring of school meals and junior high schools ( ) Improve conditions in junior high schools, and help their students to achieve fulfilment Educational initiatives, management of technical staff in junior high schools, construction / improvement / extension / renovation of buildings, school operating subsidies Development of digital work spaces and use of ICT in junior high schools - 57-

58 SCOPE OF COMPETENCE POLICIES GUIDELINE DOCUMENTS MAIN OBJECTIVES KEY MEASURES New partnerships with the municipalities and EPCIs - Implementation of intervention funds SPATIAL PLANNING / ECONOMIC DEVELOPMENT Spatial Planning and Development New partnership with the municipalities and EPCIs (inter-municipal cooperation agencies) Essonne 2020, a guideline document for balanced planning and sustainable development Contribution to the SDRIF regional planning and development document for Ile-de-France State-Regional Project Contract Specific Regional- Departmental Contract Agricultural policy Strengthen the balance between localities, the development and attractiveness of localities and structure industries in order to encourage research / enterprise partnerships Partnership with the Audéso, the Council for Architecture, Town Planning and the Environment (CAUE), the Ile-de-France public land operator (EPFIF) and the regional national parks (PNR) Reference diagrams RN7 and RN20 Local contract GP3 agreements development Mission Sud Essonne and Pacte Sud Essonne Partnerships with higher education and research establishments Conventions on objectives with the farming community - calls for projects - environmental vegetation plan - integration protection) - introduction of organic food into junior high schools Master plan for digital development in the Department (Schéma directeur territorial d'aménagement numérique, or SDTAN) Enhance the development and attractiveness of the Department - promote greater equality between localities, by improving access to high and very high speed services Essonne Department digital development Departmental plan for tourism and leisure development Make tourism an innovative business, creating jobs and added value - Encourage access to tourism and leisure for all - Position Essonne at the heart of the Paris - Ile-de-France tourist destination Promote the Department's rich heritage, cultural, economic and scientific offering - Structure the business tourism sector - Reinforce accessibility for all - Promote and market an image of Essonne as standing out from other departments. TRANSPORT / GETTING AROUND Transport Roads 2020 transportation master plan Master plan for departmental roads 2015 Make the public transport offer more attractive, improve accessibility for people with reduced mobility Ensure the quality and safety of the departmental road network Organisation of school transport outside of the urban zone, contribution to the budget of the Ile-de- France transport workers' union (STIF) mobility assistance service / PAM 91 Maintenance / - 58-

59 SCOPE OF COMPETENCE POLICIES GUIDELINE DOCUMENTS MAIN OBJECTIVES KEY MEASURES conservation / development of the network of departmental roads and of the network of transferred national roads Water Departmental plan for drinking water supply Departmental water policy Technical and financial support for localities in order to preserve water resources and encourage better public control of public water and water treatment services. Bringing water treatment facilities, drinking water plants and supporting networks up to standard, protection of rivers Sensitive natural areas Departmental plan for sensitive natural areas Protect and promote natural areas Technical and financial support for local authorities Acquisition, planning, management and opening to the public of natural areas Development of footpaths ENVIRONMENT Waste Waste policy programme Make the General Council exemplary in terms of waste prevention and management, Encourage waste prevention in Essonne, Develop departmental campaigns and raise awareness on waste prevention. Action plans for GC services and junior high schools Aid for reuse facilities and collective composting and support for prevention and awareness campaigns Noise pollution Environmental noise prevention plan Reduce noise pollution in the Department near departmental roads Protect the general public, junior high school pupils and departmental employees Follow through planned actions to reduce noise pollution Preserve areas of peace and quiet in the Department CULTURE New directions for cultural policy Encourage greater access to the cultural offer for Essonne residents, ensure a cultural balance between different areas in the Department, preserve and promote Essonne's historical and artistic heritage Support departmental facilities Méréville and Chamarande departmental cultural domains, operating subsidies for the arts, support for festivals and cultural events and for projects undertaken by departmental libraries and music schools SPORTS / COOPERATION Essonne; Land of Sport Promote responsible, educational and civic-minded sport, support the practice of sport in clubs, encourage the development of a network of sports clubs and societies, support and drive the Essonne international cooperation network Development contracts with departmental sports committees, support for international cooperation projects, financial support for the renovation or construction of sports facilities, subsidies for clubs and societies, decentralised cooperation protocols - 59-

60 SCOPE OF COMPETENCE POLICIES GUIDELINE DOCUMENTS MAIN OBJECTIVES KEY MEASURES PUBLIC SAFETY Prevent and fight against fire, distribute emergency services resources equitably throughout the Department Financing and participation in the executive board of the Essonne fire and rescue service (SDIS 91) B. ECONOMIC ASPECTS 1. Essonne, a dynamic department participating in the metropolitan role of Ile-de-France a. A department with over a million inhabitants With 1,225,191 inhabitants, i.e. 10% of the population of Ile-de-France, Essonne is the 14 th most populated department in France and the 8 th most populated in the Ile-de-France region 1. It is a relatively young department, created in 1964 from the former Seine-et-Oise department, and extends over 1,804 km², between Val-de-Marne to the north, Seine-et-Marne to the east, Loiret and Eure-et-Loir to the south and Yvelines and Hauts-de-Seine to the west. It covers 196 municipalities and 21 public intermunicipal cooperation establishments (communities of municipalities and communities of urban agglomerations), three of which extend over several departments. The Department is structured around two zones: - The urban north (1/3 of the Department), concentrating economic activity around the main thoroughfares. The three largest towns in the Department are all in the north: Evry (population 52,184), Corbeil-Essonnes (population 44,223) and Massy (population 43,006) These have the highest population density: 6,264 inhab. / km² in Evry, 4,575 inhab. / km² in Massy, 4,020 inhab. / km² in Corbeil-Essonnes, compared with 679 inhab. / km² at departmental level and 988 inhab. / km² at regional level. 2 - The more rural south, forming a green belt between the forests of Rambouillet to the west and Fontainebleau to the east and covering most of the 42,500 hectares of sensitive natural areas, 5,637 of which are wetlands and 34,407 hectares of which are woodland, which, added to the farmland, represents 79% of Essonne. WEST / EAST Inner ring Shared Innovation Cone South Ile-de-France Green Belt Outer ring Illustrations taken from the Essonne 2020 project presentation document 1 Current municipal population in 2014 according to the INSEE 2 Current municipal population in 2014 according to the INSEE - 60-

61 The population grew significantly, by 12.4 %, between 1990 and 2010, compared to 10.6% in Ile-de-France and 10.9 % on average nationwide. Furthermore, the population of Essonne is young: in fact, 27% of the population is under 20, compared to 26% in metropolitan France and 25% in the other Ile-de-France departments and those with over a million inhabitants. On the other hand, the proportion of people over the age of 60 is lower in Essonne (19 %) than in the rest of France (24 %). This is explained by the fact that new arrivals are mainly young, active people just starting their career and company managers, while those who leave are retired people, public sector workers, people working in the intermediate occupations and single-salary households. Essonne is no longer a mass destination for Ile-de-France inhabitants no longer able to afford to live in Paris and its immediate suburbs, as was the case when the Department was first created in the 1960s. As in Ile-de-France as a whole, inhabitants firmly anchored in the Department now live alongside more mobile populations. It is a department in which people both live and work. Finally, Essonne's population is qualified: almost half of its working inhabitants have an intermediate or higher managerial or professional occupation. Employees, the intermediate occupations, managers and the higher intellectual professions represent 78 % of the Department's active population. This concentration of young, qualified people is one reason for Essonne's dynamism. b. Full participation in the metropolitan role of Ile-de-France Although it forms part of the "Outer Ring" of Paris (i.e. one of the four departments situated on the outer periphery of Ile-de- France), the Essonne Department has an important metropolitan role in the development of the Ile-de-France region. Firstly, Essonne offers excellent access to the south Paris region thanks to high quality road, rail and air networks. With three motorways (the A6, the A10 and the "Francilienne"), Orly international airport, Massy TGV station, three RER lines (B, C and D) and a dense network of departmental roads, Essonne constitutes a major transit zone for goods and persons at regional, national, European and international level. The Seine, an important aspect in spatial planning in the Department, plays a key role in the development of port and freight activity. Secondly, the Department occupies an important place in its own right in one of the most powerful economic regions in the world. In terms of purchasing power parity, the gross domestic product (GDP) per inhabitant of the Ile-de-France region is the highest in Europe, higher than in London or Milan. Large national and multinational, French, European and global enterprises have head offices and / or R&D units in Essonne. Regional gross domestic product (GDP) Ile-de-France Metropolitan France France /2011 variation %) (in /2011 variation %) (in /2011 variation (in %) GDP in million 612, ,995, ,032, GDP per inhabitant in 51, , , GDP per job in 101, , , Provisional data. Source: Insee, regional accounts (2005 basis). c. A dynamic economy dominated by the service and knowledge sectors. The economic fabric is closely tied to that of the Ile-de-France region. There is a high level of commuting. The Essonne economy accounts for 437,218 employees (as at 31/12/2011), i.e. 8% of salaried employees in Ile-de-France. It includes 39,000 enterprises, composed of very large national and multinational groups as well as a network of innovative small and medium-sized enterprises (SME). Essonne is very versatile economically, partly thanks to its workforce, which is generally more qualified than at the regional level. Salaried workforce in the private sector by business sector as at 31/12/

62 Employees Sector share / total employees in France (%) Variation in employees 2011/10 (%) Agriculture & fishing 6 Not significant Not significant Manufacturing 43, Construction 31, Retail 67, Services 196, Total 338, * Source: 2013 data from the Essonne Chamber of Commerce and Industry (CCIE) The employment situation in Essonne is relatively good with an unemployment rate of 7.4 %, compared to 8.6 % in Ile-de-France as a whole and 9.8 % in France (4 th quarter 2013). Q Q Q Q Q Essonne (%) Ile-de-France (%) France (%) * Source INSEE Variation in unemployment rate between 2009 and % 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% Q Q Q Q Q Essonne Ile-de-France France *source Essonne General Council (based on the above table drawn from INSEE data) Economic activity is dominated by the tertiary sector. Hence, the main employers are found in the following sectors: - research / innovation, - business services, - education / health / social action, - personal services, - transport

63 Salaried employment by department and by business sector in Ile-de-France in Q Salaried employment Q (in thousands) Manufacturing Construction Tertiary market services Of retail which Of interim which Paris 1, , Seine-et-Marne Yvelines Essonne Hauts-de-Seine Seine-Saint-Denis Val-de-Marne Val-d'Oise Ile-de-France 4, , * Source INSEE (salaried employment at the end of the 4 th quarter 2013 excluding agriculture, essentially non-market sectors and employees of private individuals; data adjusted for seasonal variation) In the 4 th quarter 2013, more than four million employees were working in the Ile-de-France region in market sectors excluding agriculture, i.e. around one quarter of the national workforce. Year on year employment in Ile-de-France rose slightly (+0.3%), while employment in the provinces recorded a slight fall (-0.4%) for the same period. The slight increase in employment in Ile-de- France is primarily linked to the relative buoyancy of the service sector (223,000 employment units in Essonne compared to 3,345,000 in Ile-de-France). More than half the working population of Essonne are employed in the tertiary sector, which constitutes the main growth engine. Of those 223,000 employment units in Essonne, 65,800 employment units are linked to the retail sector while 8,700 employment units are in temping. d. An essential link in the South Ile-de-France Innovation Cone The Department concentrates 64% of public and private research (higher education establishments, public and hospital research centres, large industrial and research institutions) of the South Ile-de-France "Innovation Cone". Three Essonne hubs play a leading role in this geographical area, which is located to the south of Paris, concentrating research, higher education and hi-tech activities: - Orly / North Essonne, - Evry / Corbeil / Centre Essonne Seine Orge, - Massy / Plateau de Saclay / Courtaboeuf

64 Illustration taken from the Essonne 2020 project presentation document This activity relies on a number of major public and private facilities. Essonne has the second largest concentration of public research and higher education institutions after Paris (Orsay / Plateau de Saclay / Evry - Génopole) and attracts leading public research bodies both at regional and national level (National Centre for Scientific Research (CNRS), Atomic Energy Commission (CEA), National Computer Science and Technology Research Institute (INRIA) and National Health and Medical Science Institute (INSERM)) and, in addition to two universities, boasts prestigious grandes écoles (selective higher education institutions), including the École Polytechnique in Palaiseau, the École Supérieure for Electric Energy and Information Sciences (Supélec) in Gif-sur-Yvette, the National Telecommunications Institute (INT) in Evry, the École Supérieure for Optics in Orsay and the École Normale Supérieure for the Agricultural and Food Industries in Massy, as well as a wide range of training courses. Essonne is the leading department after Paris in terms of research and development (R&D). In 2011, Essonne filed 13 % Ile-de- France patents, mainly in the fields of chemistry and machinery - mechanics -transport. The public and private workforce in the research / innovation / development sector represents 18,108 jobs, i.e. 31% of the regional workforce. With its two major universities (Evry Val d'essonne and Paris Sud XI in Orsay), it also has strong potential thanks to its 43,683 students (universities and grandes écoles). This combined public and private sector drive for research has led to the creation of localised sector-specific hubs such as the Génopole (national biotechnology hub), Optics Valley (national advanced optics hub), Saclay Scientipôle and the two global competitive hubs of Ile-de-France Systém@tic (software and complex systems) and MédiTech Santé (medical innovation). Three more hubs also exist: ASTech (commercial aviation, space transport, aeronautical motorisation), Mov'eo (cars and safe collective transport for mankind and the environment) and Cap Digital (digital technology). A "national interest" project also exists, covering Massy, Palaiseau, Saclay and Saint-Quentin-en-Yvelines. Essonne is linked to a project to create a public establishment bringing together 49 municipalities (Yvelines and Essonne) with the aim of setting up a regional planning project combined with a scientific project. These advantages make Essonne a strategic department for the productive development of the Ile-de-France agglomeration and the creation of businesses and new jobs. The concentration of research and innovation in Essonne is a major contributing factor to the overall performance of Ile-de-France and its position in terms of global competition. 2. A long-term goal: Essonne 2020 The first point to note is the importance of the Outer Ring in the current and future development of the Ile-de-France region. In this context, two risks must be avoided: - firstly, concentrating development in Paris and the inner ring of suburbs (densely populated) to the detriment of the outer suburbs, - secondly, developing growth hubs while neighbouring areas are suffering

65 Accordingly, in September 2006, the General Council launched an ambitious departmental project entitled "Essonne 2020", which set forth three goals: - reverse social and territorial segregation trends in the region; - meet the challenge posed by international competition by capitalising on the potential for innovation and research, by promoting Essonne excellence in terms of training and research as a lever for the economic development of southern Ilede-France; - position Essonne as a pioneering "eco-department", by promoting agriculture, the environment, the potential for tourism, and diversity of life styles in Essonne. The Department intends to use two levers in order to achieve this: - structural projects at the regional level, included in the State-Region Planning Contract (CPER) (e.g. modernisation of RER lines C and D, development of clean public transport); - six "departmental interest" projects (PID), six areas in which it is essential to take a concerted approach over and above institutional limitations, through priority planning and development. Essonne is therefore central to regional initiatives both in terms of innovation and in terms of heritage and environmental resources. Illustration taken from the Essonne 2020 project presentation document C - FINANCIAL RESOURCES FOR THE DEPARTMENT'S ACTIONS Because the Department has financial autonomy, guaranteed by the Constitution, it is able to translate these powers into concrete actions and operations. It has also created a certain amount of leverage enabling it to carry out a number of its projects. The origin of its resources The law allows the Department to set the rates for the tax on buildings and indirect taxation (stamp duty, in particular). The law also provides various other financial resources such as compensation for the transfer of responsibilities or grants from the State. The Department also receives subsidies and contributions from the Ile-de-France Region and other bodies within the framework of certain investment operations. Strictly regulated finances The General Council adopts its budget annually by vote budget appropriations), to which it can make changes throughout the financial year (amending decision(s)). At the end of each financial year (31 December), the local authority's accounting entries for the previous year are shown as expenditure and income in the administrative accounts, adopted by the General Council before 30 June in the year following the closure of the budget year. The law stipulates that income may not be allocated to targeted expenditure, except as concerns Sensitive Natural Areas and Architecture and Urban Planning and Environment Councils. Furthermore, items of income and expenditure may not be summarised: each item must therefore appear in the budget for its full amount. The principle of budgetary unity should also be noted: all income and expenditure for the Department must appear in a single document. This principle is made more flexible by way of "annexed" budgets for certain specific activities. Thus, pursuant to the - 65-

66 Social Action and Families Code (Code de l'action sociale et des familles), the Departmental Institute for Children and Families is accounted for separately and its accounts consolidated with those of the General Council for the purposes of financial analysis. Each budget is structured in order to distinguish between operating income and expenditure in one section and investment income and expenses in another. Each section must show a balance between income and expenditure. This principle protects the stability of local finances. A corollary of this is that the General Council is not authorised to finance its current expenses through borrowing. In order to ensure its budget remains balanced, it must generate sufficient gross savings in its operational section (actual operating income - actual operating expenditure), to which may be added any final income from investments, excluding loans, in order to cover the annual and contractual repayment of the principal of its debt. The income of French local governments comprises taxation and allocations. Taxation includes both shared resources (taxes collected at national level that are redistributed to the local authorities such as the corporate value added tax (CVAE), the special tax on insurance contracts (TSCA) or the domestic consumption tax on energy products (TICPE)) and own income consisting of taxes with local tax bases (such as, for example, the property tax on developed property, stamp duty on conveyance for consideration and the electricity tax) where the rate can be adjusted locally. As a result, the Department was able to raise the stamp duty on conveyance for consideration (DMTO) under the 2014 Finance Act (from 3.80% to 4.50%) and can review the electricity tax tariff annually. Financial ratios Administrative accounts (AC) Gross savings (GS) in m , Loan repayments (LR) in m , Net savings (NS = GS LR) in m , Operating income in m , Gross savings rate as a % of actual operating income 10.13% 13.21% 13.51% 11.67% 11.17% Net savings rate as a % of actual operating income 4.54% 8.01% 6.13% 5.20% 3.86% - 66-

67 1. Stable income OPERATING SECTION EXPENSES INCOME COMMENTS Personnel DIRECT LOCAL TAXES 406.3m in 2014, i.e. 36% of actual operating income Earned income supplement (Revenu de Solidarité Active, or RSA) 1. The gross amount of the property tax on developed property was estimated at 239.3m versus 234.6m in the 2013 budget appropriation, i.e. +2% (for reference, the net amount is calculated by subtracting 17.1m for the stamp duty equalization fund, i.e. estimated net income of 222.2m) 2. The developed property management expense equalization fund, established under the 2014 Finance Act, in the amount of 6.9m 3. Mining royalty: 1.5m ( 1.4m in the 2013 budget appropriation): this tax is linked to the presence of oil extraction sites 4. Flat-rate tax on network businesses (IFER): 0.84m ( 0.74m in the 2013 budget appropriation): this tax supplements the tax system introduced by the reform of the business tax Since 1 January 2011, following the reform of the business tax, the Department's direct taxation now has only one direct tax, the tax on developed property (foncier bâti), instead of four prior to the reform (the tax on developed property, the council tax, land tax and business tax). This change was compensated by means of indirect taxes and an allocation. Essonne cannot create new taxes to support its budget. It does, however, have the freedom (regulated by law) to: - set the developed property tax rate; - introduce exemptions from this tax. - change the rate of the stamp duty on conveyance for consideration (DMTO) and the regional development tax (TA); - index annually the tariffs of the electricity tax on consumers (TFCE). 5. The corporate value added tax (CVAE) is 157.8m for 2014 ( 148.7m in the 2013 budget appropriation, i.e. +6%): this tax supplements the tax system introduced by the reform of the business tax INDIRECT TAXATION Personal care allowance (Allocation Personnalisée d'autonomie, or APA) 400m in 2014, i.e. 35% of actual operating income 1. Stamp duty on conveyance for consideration (DMTO): 166.4m (versus 150m in the 2013 budget appropriation, i.e. +11%) 2. Domestic consumption tax on energy products (TICPE): 83.3m ( 83m in the 2013 budget appropriation) The Department elected to exercise the option introduced in the 2014 Finance Act, raising the main rate to 4.5% from 1 March The income included in the budget appropriation is based on the sums collected in 2013, adjusted to take account of the higher rate over 10 months. Allocation of a portion of the TIPP (renamed the TICPE) compensates for the transfer of the RMI in An administrative decision sets the percentage of the portion of the national TICPE allocated to each department. This income, ¾ of which is guaranteed by the State (right to compensation), varies according to fuel consumption and the annual fuel prices - 67-

68 Disability Benefit (Prestation de Compensation du Handicap, or PCH) Current supplies 3. Special tax on insurance contracts (TSCA): 127m ( 130m in the 2013 budget appropriation, -2.4%, but the fact that proceeds to end-june 2014 were 20% up on the same period of 2013 points to the 2014 budget forecast being exceeded and for 2014 year-end proceeds exceeding those in Electricity tax: 11.14m ( 11.4m in the 2013 budget appropriation) 5. Regional development tax (TA): 11.4m ( 12.6m in the 2013 budget appropriation, i.e. -10% to reflect collection delays associated with the new accounting circuit introduced for this tax, which replaces previous urban planning taxes) updated each year by Parliament. Allocation by the State of a portion of the TSCA compensates for the elimination of the tax disc and finances certain transfers of responsibilities implemented in As from 2011 and given its new tax basket, the Department receives an additional portion of the TSCA. The tax is no longer based on the price of the electricity invoiced by the distributor but on the volume distributed, to which a tariff is applied that can be increased annually by means of the approval by the departmental assembly of an indexation coefficient. The regional development tax replaces two urban planning taxes previously collected by the department under similar conditions but from a slightly larger tax base. It concerns new build. ALLOCATIONS, SUBSIDIES, COMPENSATIONS AND CONTRIBUTIONS 252.6m in 2014, i.e. 22% of actual operating income Interest on debt Allocations determined by the State and for free use by the local authority 1. Overall operating allocation: 157.9m ( 167.8m in the 2013 budget appropriation, i.e. -6%) 2. Compensation allocations linked to reductions in direct taxation decided by the State or to the transfer of responsibilities. 5.6m ( 7.2m in 2013, i.e. -22%) This year-on-year reduction of 10m was due to a stability pact agreed in order to make local authorities share in the reduction of the national budget deficit The link between this compensation and the corresponding taxes has weakened over the years. They are now used as an adjustment variable to limit increases in the allocations paid by the State 3. Subsidies and contributions, including the departmental job support fund (fonds de mobilisation départemental pour l'insertion) created in 2005 and contributing to compensate the RMI: 4.1m (unchanged on 2013) 4 Overall operating allocation: 3.23m (unchanged on 2013) 5 National solidarity fund for the independence of the elderly and people with disabilities (CNSA): 21.77m ( 19.9m in the 2013 budget appropriation, i.e. +9%). 6 Compensation for the reform of the business tax (DCRTP) 33.8m and national resource guarantee fund Social welfare allocations such as the personal care allowance (APA) and the earned income supplement (RSA) The compensation for the reform of the business tax and the national resource guarantee fund are two mechanisms implemented in the framework of the reform of the business tax to compensate for the loss of income from the removal of the business tax

69 (FNGIR) 26.2m OTHER INCOME 85m in 2014, i.e. 7.43% of actual operating income 1. In particular with regard to social assistance - contribution by elderly and disabled persons towards their accommodation - income of social security bodies 2. Price-related resources (sports and cultural facilities, etc.) 3. Recovery of unjustified payments (RMI, APA, etc.) 4 Reversals of provisions 5 Income linked to school transport Internal financing generated by the local authority and paid into the investment section. Note: Borrowing in order to finance the operating section is prohibited. This section must generate a profit enabling it to repay at least the principal on the debt. INVESTMENT SECTION EXPENSES INCOME COMMENTS Repayment of the principal on the debt Operating profit 90m in 2014 Gross savings are higher than loan repayments for the year ( 82.75m) Internal financing generated by the Department's operational section in order to finance the investment section. Acquisitions INVESTMENT ALLOCATIONS AND SUBSIDIES, OTHER INCOME 40.4m in 2014 Works on property (in particular on junior high schools) and on roads 1. VAT compensation fund (Fonds de Compensation de la TVA, or FCTVA): 15m 2. Investment subsidies from the State and other partners: 24.8m The FCTVA is paid each year based on the amount of expenditure recorded the previous year and is the method of recuperating VAT specific to local governmental authorities. Other expenditure enhancing the Department's heritage 3. Other investment income: 0.57m BORROWINGS: m - 69-

70 2. Leverage of local semi-public companies Local semi-public companies (sociétés d'économie mixte locales, or SEMLs) are governed by Article L et seq. of the General Local Authorities Code. SEMLs take the form of limited companies (sociétés anonymes). They are created specifically in order to carry out spatial planning or construction projects, to operate industrial or commercial public services or for any other activity qualified as in the public interest. SEML share ownership is composed of a majority of public shareholders, with private shareholders owning at least 15%. SEMLs have two main advantages: first, the structure of their share ownership and, second, knowledge of the geographical area in which they are set up. The shareholder mix ensures the predominance of local authorities in the decision-making and supervisory bodies of SEMLs, while allowing private shareholders to contribute their know-how with regard to the management of said companies. Their knowledge of the local area enables them to prioritise the use of local resources in order to carry out their responsibilities in the public interest. The Essonne Department owns shares in four SEMLs: a. SEMARDEL The Essonne Department has been a shareholder in SEMARDEL since SEMARDEL is an SEML involved in waste processing. Since 1 January 2002, it has been at the head of a holding company comprising three main subsidiaries: SEMAER (formerly SAER, in charge of waste collection), SEMARIV (formerly PSE, specialising in waste recycling) and SEMAVERT (formerly CEL, responsible for waste storage). In 2008, the SEMARDEL group became the first waste collection, processing and recycling group in France to obtain the Quality Security Environment label for all its activities as a whole. Its aim is to become a benchmark for local authorities in France with regards to waste processing at the environmental, economic and human level. SEMARDEL has implemented a development plan based on highly innovative investment projects, focusing primarily on the recycling of materials and energy (alliance between SEMARDEL and the German public company MVV Umwelt (Mannheim) specialised in energy generation from waste with a view to establishing a joint venture primarily involving the operation of incinerators and biomass plants in France). In 2013, SEMARDEL increased its capital by the incorporation of reserves without issuing new shares, raising its share capital from 17,746,166 in 2012 to 22,842,000 at end Shareholders Share capital in * Net turnover * Average workforce* Siredom Fleury-Mérogis municipality Grigny municipality Juvisy/Orge municipality Morigny-Champigny municipality Sainte Geneviève municipality Essonne Department (1.06%) Vallée de Chevreuse intermunicipal syndicat Val d'essonne community of municipalities Epinay/Orge municipality SEMARIV Caisse de dépôts et consignations SEMAVERT (formerly CEL) Essonne Chamber of Commerce and Industry SOREC Total 4,319, ,166, ,699, ,510, , , , ,472, , ,472, , ,321, ,699, , ,510, ,746, *Data taken from the latest annual activity report of SEM GENOPOLE (31/12/2012) 31,688, employees - 70-

71 b. SEM GENOPOLE The Essonne Department has held shares in SEM GENOPOLE since SEM GENOPOLE produces and manages real property in the GENOPOLE biopark, a hub of research excellence in the field of genomics and biotechnologies. It is also responsible for developing the biopark's logistics services, by enhancing the quality of the real property offer and respect for the environment. As part of the financing of work to develop biotech laboratories, the SEM GENOPOLE's borrowings, which currently stand at 1,143, as at 31 December 2013, are guaranteed by the Essonne Department. Shareholders Share capital in * Net turnover * Average workforce* Ile-de-France Region Essonne Department (32%) Caisse de dépôts et consignations SEM Essonne Aménagement Société Générale Accor Group Essonne Chamber of Commerce and Industry Arbey Aménagement SCET Total 9,146,000 6,097,000 3,050, , ,000 30,000 9,000 1,000 1,000 19,051,000 5,069,312 4 employees *Data taken from the latest annual activity report of SEM GENOPOLE (31/12/2012) c. SEM VIDEOCABLE 91 (TELESSONNE) The Essonne Department has been a shareholder in TELESSONNE since TELESSONNE is a SEM responsible for local public service television, which broadcasts via cable and ADSL TV. In particular, it participated in the creation of the NRJ PARIS Ile-de-France channel in As part of its business development, it plans in the medium term to extend its coverage zone to include the entire Department by obtaining a digital terrestrial frequency (DTT). This goal required TELESSONNE to make investments in 2010 in terms of innovation in the composition of its schedule and in broadening the range of media devices on which the channel is broadcast. The Essonne Department is a solid investor in TELESSONNE's work, providing the necessary resources for implementing its social projects. As part of a multi-year agreement on objectives and resources, it granted TELESSONNE an annual operating subsidy of 900,000 for the 2013 financial year. Shareholders Share capital in * Net turnover * Average workforce* Essonne Department (55.30%) IDF Communication SAS SIVIC Essonne Chamber of Commerce and Industry Massy municipality Palaiseau municipality Ulis municipality Chilly-Mazarin municipality Igny municipality Bièvres municipality Total 216, , , , , , , , , , , , employees *Data taken from the latest annual activity report of SEM GENOPOLE (31/12/2012) d. ESSONNE AMENAGEMENT The Essonne Department has been a shareholder in SEM ESSONNE AMENAGEMENT since ESSONNE AMENAGEMENT's role is to carry out all manner of research and consulting or assistance in the fields of urban planning, spatial planning, the creation or operation of public or private facilities, spatial planning operations in the framework of development and - 71-

72 construction concessions, as agent (mandataire) or assistant project manager (maître d'ouvrage) for all buildings on behalf of any entity, particularly public entities. In 2007 its ISO 9001 certification was renewed for its agency work. ESSONNE AMENAGEMENT is currently responsible for carrying out nine operations as agent on behalf of the Department including, in particular, restructuring of the canteen of the Georges Pompidou junior high school in Montgeron and the extension and restructuring of the Les Gâtines junior high school in Savigny-sur-Orge. It is also responsible, alongside CITADIS (a spatial planning company for the Vaucluse Department and the Avignon agglomeration), for project managing the construction of nine new buildings and safety improvements to existing buildings on the site of the Croix Saint-Simon hospital in Paris, on behalf of the Diaconesses / Croix Saint-Simon hospital group. Shareholders Share capital in * Net turnover * Average workforce* Essonne Department (52.75%) Etampois community of municipalities Verrières-le-Buisson municipality Ulis municipality Evry-Centre-Essonne agglomeration community Plateau de Saclay agglomeration community Caisse de dépôts et consignations Opievoy Essonne Chamber of Commerce and Industry Essonne Agency for the Economy CESFO Essonne departmental tourism committee CEPME SIPARI (ISCO) Arbey Immobilier Franpart Total 1,488, , , ,280 87, , , ,760 54,240 4,320 9,984 4,320 4,320 4,320 5,760 8,688 2,821,184 *Data taken from the latest annual activity report of ESSONNE AMENAGEMENT (31/12/2012) 3 The Department's financial rating 8,853, employees The Essonne Department's finances have been analysed recently by two rating agencies: Fitch Ratings and Standard and Poor's. They gave respective ratings of AA stable outlook on 25 April 2014 and AA stable outlook on 14 March Both agencies underline the sound, positive socio-economic profile of the Essonne Department at international level. Its budgetary performance is also viewed positively. Standard and Poor s rates the debt management as "prudent and optimised" while Fitch Ratings notes that it is "actively managed with diversified borrowing, notably through its EMTN programme". Their analysis also highlights the absence of structured products. Both agencies commend the quality of the Essonne Department's management and governance. However, both agencies highlight the impact of the freezing of State allocations on the local authority's financial structure and the consequences for its savings going forward. III. FINANCIAL INFORMATION A. CONSOLIDATED FINANCIAL ANALYSIS Administrative costs A local authority s administrative accounts show actual expenses and revenues in a financial year, unlike budget appropriations and supplementary budgets which are forward-looking in nature. The data below only reflects actual movements during the financial year. Movements between the operating and investment sections ( non-cash movements ) are ignored. The analysis includes the figures in the subsidiary budget of the Departmental Children & Family Institute (IDEF). This budget is mainly funded by means of an annual grant from the Essonne Department ( 10.7m in 2013; 9.6m in 2012, 9.7m in 2011)

73 The administrative accounts for a given financial year are reviewed by the General Council by 30 June the following year at the latest and show actual expenses and revenues in the financial year. These accounts, which are prepared by the local authority, must match the management accounts prepared by the public accounting officer responsible for paying the local authority s expenses as well as collecting all its revenues. The 2013 administrative accounts will be presented for the approval of the meeting of the General Council on 30 June

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76 2 Changes in the operating section a. Operating revenues Operating revenues totalled 1,131 million in 2013 ( 1,126 million in 2012), a slight increase on the previous year (+0.4%). Stamp duty was down 5.5% on 2012 but the corporate value added tax (CVAE) was up 11.20% on The lower level of grants is due to the timing of those paid by STIF (Syndicat des Transports d'ile-de-france) to the Essonne Department for school transportation, responsibility for which was transferred in July A portion of the 2011 grants (circa 9 million) was paid in 2012, bringing the total to 34 million. The basis for comparison with 2013 is thus distorted. The difficulty is compounded by the fact that the school year, used as the basis for grant payment, does not coincide with the budget year 1,200m Change in actual operating revenues (AOR) 16% 1,000m 800m 600m 400m 200m 0m 12% 8% 4% 0% -4% AOR Change in AOR The direct taxation reforms introduced since 2011 mean that only one tax can now be freely set by the local authority: the property tax on developed property. This was merged with the regional rate and a portion of the recovery costs previously received by the State (the property tax on developed property amounted to 235 million in 2013 versus 169 million in 2010). Local taxes (from an accounting perspective) in 2013 ( million) Direct taxation 55% Indirect taxation 39% Grants 6% Local taxes, as defined in the M52 budgetary and accounting guidelines, totalled 427 million in 2013, and broke down into: 1. direct contributions (account 731 in the M52 guidelines encompassing the property tax on developed property, the corporate value added tax (CVAE) and the flat-rate tax on network businesses (IFER) of 401 million; 2. transferred taxation, solely consisting of the national resource guarantee fund (FNGIR), of 26 million; and 3. supplementary assessments of 0.7 million

77 The amount of local taxes was 5.4% up on 2012 as a result of the strength of the CVAE (+11.20%) and the increase in the amount of the property tax on developed property (+3%). A breakdown of the changes in each local tax component can be found in the table below. Local taxes CVAE 147,816, ,373,917 IFER 823, ,825 Developed property 228,747, ,992,793 Supplementary assessments 1,963, ,955 FNGIR 25,946,959 26,224, ,297, ,181,282 Following the reform of the business tax in 2011, the rate of property tax on developed property (which the Essonne Department is free to set) now includes the region s as well as the equivalent of a portion of the recovery costs previously received by the State ( 235 million in 2013 versus million in 2012 and 169 million in 2010). Accordingly, the 2013 proceeds from the property tax on developed property represented 43% of the old fiscal basket in This rate, calculated in 2010 values, has not been changed since 2011 in order to maintain an equivalent tax burden. The differential between the rate in the Essonne Department and national averages more than doubled, and is now 19.8% below average departmental rates (compared with 8.5% in 2010 prior to the reform of the business tax). 15.5% Tax rate on developed property (DP) Differential vis-à-vis national averages 15.0% 14.5% 14.0% 13.5% 13.0% 12.5% 12.0% 11.5% 11.0% DP 2011 DP 2012 DP 2013 Differential vis-à-vis national averages (points) Essonne b. Ordinary running expenses 1. The Essonne Department bolsters its social protection role The scope of the Department's expenses increased substantially following decentralisation and as a result of increased solidarity between local authorities operating expenses, adjusted for provisions and extraordinary expenses, amounted to circa 999 million, up a modest 1% on 2012, thanks in particular to rigorous control at year-end. For reference, in 2012, they amounted to circa 990 million within the same scope

78 Excluding accounting adjustments, actual operating expenses, combining the main budget and IDEF subsidiary budget 1, rose from circa 995 million in 2012 to 1,004.5 million, a year-on-year change of +0.96%. The Department's "Social Action" and "Social Inclusion" policies accounted for over 542 million, i.e. close to 54% of operating expenses 2 (versus circa 529 million and 53.2% in 2012). They rose 2.5% in absolute terms between 2012 and Within these two policies, social welfare payments (earned income supplement (RSA), personal care allowance (APA), and disability benefit (PCH)) rose sharply (+7.1% on 2012), and in absolute terms amounted to million for 2013, i.e. close to 19% of operating expenses, versus over 177 million and 17.8% in The year-on-year change in social welfare payments was +7.13%. Within the "Social action" policy, three main sectors can be identified: - the Children and Family sector, accounting for million in operating expenses, i.e. 42.5% of total expenditure on this policy (in 2012: million 2012/2013 change: +0.05%); - the people with disabilities sector, accounting for over 134 million in operating expenses in 2013, i.e. close to 34% of total expenditure on this policy (in 2012: over 131 million, with the same relative weighting within the policy); - the elderly sector, accounting for over 89 million in operating expenses in 2013, i.e. 22.6% of total expenditure on this policy (in 2012: over 91 million and a 23.1% weighting within the policy). The Departmental Children & Family Institute (IDEF), a medical and social structure managed under a subsidiary budget, had total expenses of 10.6 million in 2013 (circa 9.5 million in 2012, i.e %. The average stay is once again down, in line with the target goals. Caring for unaccompanied minors represents a major part of IDEF's work. In fact, the number of unaccompanied minors cared for totalled 57 in 2011, 198 in 2012 and 154 in The coordination unit (MAMIE 91) made it possible to limit such care. The accommodation expenses of the ASE (Aide Sociale à l'enfance - child welfare bureau) rose sharply: 70.3 million in 2012 and 77.8 million in 2013, an increase of 3.2%. Some optimisation of ASE income reflects the desire to achieve better cost control: 1.8 million in 2011 and close to 2.7 million in 2013, an average annual improvement over the period of over 21%. The number of care home places offered to people with disabilities totalled 1,996 as of 31 December Expenses for the care or accommodation in residences of people with disabilities amounted to 104 million in 2013 compared with 102 million in 2012 (+2.1%). 3,077 people with disabilities were in receipt of the disability benefit (prestation de compensation du handicap - PCH). As of 31 December 2013, 13,044 elderly people were in receipt of the personal care allowance (Allocation Personnalisée d'autonomie - APA), 7,475 of whom at home and 5,569 in residences. As of 31 December 2013, Essonne had 12,999 authorised places in residential facilities for elderly people. Expenses for the placement of elderly people in a family or in a residence were restricted to 37.7 million in 2013, compared with 39 million in The social inclusion policy accounted for 145 million in operating expenses in 2013, up 8.9% on 2012 (2012 amount: over 133 million). The "Solidarity" sector accounted for 89.5% of expenditure on this policy, with over 90% thereof involving allocations paid in respect of the earned income supplement (RSA). In December 2013, the number of earned income supplement (RSA) recipients totalled 23,779, up 10.3% on The Department is fully behind the emplois d avenir scheme: 51 young people hired by the General Council, 90 by the health & social establishments and services (ESMS) and 70 grants were provided to voluntary associations to encourage such hiring. The Department's public safety policy accounted for 9.4% of actual operating expenses in 2013 totalling 94 million (in 2012: 94.3 million, change: -0.34%). The Department provided the SDIS (Service Départemental d'incendie et de Secours the departmental fire and rescue service) with 93.8 million in financial support in 2013 (down 0.3% on amount: million), meeting a little over 97% of their planned expenditure in This contribution is still well above the average support provided by Departments nationally. Actually, "nationally, an average of 57% of financing is provided by the general councils and 43% by the municipalities and EPCIs (inter-municipal cooperation agencies)". 3 The slight decline in these operating expenses was offset by the General Council's participation in more one-off schemes such as the funding of basic first-aid training in operational junior high schools and an investment grant of some 500,000. Other sectors in which the Department is active include the transportation, education, spatial planning and environment, cultural and sports policies. 1 IDEF: Departmental Children & Family Institute, ancillary budget managed in accordance with the M22 accounting classification 2 Operating expenses, unadjusted and combining the main budget and IDEF ancillary budget 3 Source: Taken from the report of the Board of Directors of the SDIS dated 10/01/14-78-

79 With respect to transportation, excluding major investment, operating expenses amounted to over 65 million in 2013, sharply up on 2012 (+8.7% amount: over 60 million). The main line item, totalling 36 million (up 21.1% on 2012 (2012 amount: 29.7 million)), stems from the delegation of responsibilities from the STIF (Syndicat des Transports d Ile-de-France - the transport authority in the greater Paris region) to the Department with regard to school transportation on special routes and for the transportation of students with disabilities. Next comes assistance for the transportation of the elderly and people with disabilities, totalling 5.2 million in 2013 (up 8.4% on amount: 4.8 million) by means of travel passes (Améthyste rubis pass and taxi vouchers). Finally, ongoing road maintenance amounted to over 9.3 million in 2013 (2012 amount: 9.6 million, change: -3.1%). In addition, over 30.5 million was allocated to the running of the Education policy, 1.5% up on 2012 (2012 amount: 30 million). In 2013, 58.5% of these credits were allocated to state junior high schools, i.e. circa 17.8 million (2012 amount: 17.8 million, change: +0.3%). 9,626 students attended the 20 private junior high schools in the Essonne Department and junior high schools under contract accounted for 4.4 million in operating expenses (2012 amount: 3.9 million, change: 12.7%). With respect to the school meals support programme (accounting for 4.7 million in expenses in 2013, 2012 amount: 4.8 million, change: -1.9%), the introduction of fairer pricing, (9 level family benefit scale) helped improve lunch take-up rates across the 100 state junior high schools. It rose to circa 77% with 1,565 additional students staying for lunch compared with the previous year (i.e. 44,000 students stayed for lunch out of the 58,000 junior high school students). The Spatial Planning and Environment policies accounted for over 12.8 million in 2013 (2012 amount: 13.9 million, change: -8.1), and supported the agricultural sector, assisted spatial planning while also promoting economic development with grants to many General Council partners. The Institution's resources encompass the expenses relating to the effective operation of the Local Authority. These expenses support all the activities of the General Council, encompassing a very wide range of expenses: - expenses associated with human resources amounted to million in 2013 (up 2.76% on amount: million), including employment schemes totalling 1.37 million, - rent, charges, utilities, maintenance of departmental buildings (social and others) accounted for 11.4 million in 2013 (2012 amount: 11 million, change: 4%) - the strengthening of solidarity between local authorities pursued by the government, with the repayment in connection with the corporate added value tax (CVAE) cap of 1 million in 2013 ( 0 in 2012) and the repayment to the stamp duty equalization fund of 4.9 million in 2013 (2012 amount: 16.7 million, change: -70.7%), - provisions funded as part of prudent management ( 4.9 million in 2013, unchanged on 2012), including 4 million for the final allocation made in connection with the provisioning to alleviate the debt repayment peak following the arrangement of bond issues, 750,000 for unwarranted earned income supplements (RSA) and 200,000 for sundry disputes. - computerisation of services, in terms of operations, totalling 1.83 million in 2013 (2012 amount: 1.9 million, change: -5%). Finally, over 13.7 million (2012 amount: 15.9 million change: -13.5%) was paid in subsidies, contributions and grants (out of an actual total of 16.1 million 2012 amount: 18.4 million change: -12.4%) involving the Cultural, Sports, voluntary sector and decentralised cooperation policies. 2. Financial expenses Financial expenses, which excluding accrued interest expenses not yet due amounted to million in 2013 ( million in 2012, i.e % 2013/2012) and million (including accrued interest expenses not yet due) in 2013 ( million in 2012, i.e % between 2013 and 2012) broke down as follows: million in interest expenses on the medium-long term debt (versus million in 2012, a 0.01% increase on 2012); million in debt hedging expenses (swaps) (versus 3.2 million in 2012, up 31.50% on 2012); million in interest on bank facilities used for treasury management purposes (revolving facilities (versus million in 2012, down 89.57% on 2012)); million in expenses and fees (versus 0.17 million in 2012, up % on 2012); and million in respect of the recognition of accrued interest expenses not yet due (versus 0.39 million in 2012, i.e. up 9.14% on 2012). The swaps also give rise to income, reducing the above financial expenses. In 2013, income on interest rate hedging totalled 2.6 million (versus 1.85 million in 2012, i.e. up 28.18% on 2012). 3 CHANGES IN THE INVESTMENT SECTION a. Investment revenues Total investment proceeds, which break down into allocations and grants, totalled million in 2013, up 9.8% on The FCTVA was up 5.4% and grants up 23.4% on

80 Final investment proceeds Other proceeds 612, ,554 FCTVA 14,742,337 15,534,254 Other State allocations 8,361,904 8,092,277 Grants and transfers 12,130,845 14,967,686 35,847,175 39,342,771 b. Investment expenses Combining the main budget and the IDEF subsidiary budget, the investment expenses of the Essonne Department amounted to million from 2010 to Total 200,716, ,063, ,409, ,247, ,437,485 Local public investment is a key growth driver. The Department is thus pursuing its infrastructure spending with 195 million (2012 amount million change: -1.1%), thereby closing in on its target of one billion euros over 5 years (Target announced in the 2010 budget policy debate, reiterated in the 2011 version). Works spending, clearly preferred since the budget policy debate, accounted for 57.4% or 112 million in As the leading partner of Essonne municipalities and associations of municipalities, the General Council maintained and pursued its financial commitment to local development amounting to 42.6% and paid grants of over 83 million. Breakdown of investment Total expenses excluding debt Authorised Authorised Authorised Authorised Authorised Grants 112,876, ,206, ,577, ,098, ,758, Grants as a % 56.2% 50.3% 45.4% 42.6% 48.7% Works 87,840, ,857, ,832, ,148, ,678, Works as a % 43.8% 49.7% 54.6% 57.4% 51.3% Transportation work represents the leading investment line item, totalling 60.8 million or 31% of total infrastructure spending in 2013 (2012 amount: 56.4 million change: +7.9%). Aside from transportation ( 12.7 million; 2012 amount: 9.8 million change: 29.1%), road works accounted for the remaining 48.1 million (2012 amount: 46.5 million +3.4% change). Work on the national road network notably involved the elimination of level crossings, the creation of service roads, the development of roundabouts, the strengthening and restoration of roadways, bus station development, road junctions etc. Certain public transport projects were given investment support, including the T7 Villejuif/Athis-Mons tram, the Brétigny railway bridge and the TZEN4. 23% of investment expenses (i.e million; 2012 amount: 43 million change: +3.7%) involved spatial planning and economic development ( 30.4 million (2012 amount: 33.2 million change: -8.3%) including old contracts and major operators such as Genopole 2.5 million (2012 amount: 1.9 million change: +31%), and also the environment ( 10.4 million (2012 amount: 9.95 million change: +4.7%) on water treatment, the enhancement and acquisition of fragile natural areas) and the Department's new contractual policy with local authorities ( 3.9 million - No amount can be provided for the contractual policy in 2012 as this policy was introduced in connection with the 2012 credit amending decision (Meeting of 22 October). In 2012, only the programme approvals were recorded. Payment credits were proposed when approving the 2013 budget appropriation: starting point for this new policy). With respect to education, million (2012 amount: 40.2 million change: -8.7%) was allocated to fund major work in junior high schools ( 30.3 million, unchanged on 2012), purchase computer hardware and school furniture ( 4.36 million; 2012 amount: 4.9 million change: -10.2%), investment allocations for private junior high schools ( 825,000; 2012 amount: 457, change: +80.8%) and grants provided to help support higher education and research ( million; 2012 amount: 4.5 million change: -73.6%). Investment expenses on Social Action (combining the main budget and the IDEF ancillary budget) and Social Integration policies totalled 23.1 million in 2013 (2012 amount: 31.2 million change: -26%), followed by the Institution's Resources (excluding class 16 accounts) at 20.6 million in 2013 (2012 amount: 19.8 million change: +4.4%). The General Council made a major contribution to the national social housing drive: over 10.8 million (2012 amount: 16.4 million change: -34.1%) was paid to providers of social housing and community operators, thereby aiding the development and restoration of a large number of social housing units in the Essonne region

81 The social and urban cohesion sector mainly involves the Support Fund mechanisms ( 3.4 million; 2012 amount: 4.7 million change: -27.8%), the Departmental urban renewal fund ( 1.3 million; 2012 amount: 1.75 million change: %) and Ville Avenir ( 0.7 million; amount 0.6 million - change +16.5%). The first departmental public residential facility for dependent elderly people in Morangis opened, as promised, in May Work began on the departmental public residential facility for dependent elderly people in Courcouronnes in February During the year, other investment grants were paid to fund care centres for the elderly and people with disabilities, in particular in Etampes (Petit Saint Mars 0.83 million), Fontenay-les-Briis ( 0.75 million), Vert-le-Grand ( 0.45 million) and Athis-mons ( 0.37 million). The investment expenses in 2013 on the construction of social and other buildings primarily involved: Juvisy-sur-Orge (purchase for mother and child protection (PMI) 0.46 million), Brétigny-sur-Orge (off-plan purchase departmental solidarity service for 0.46 million and a social space costing 0.22 million), Palaiseau (construction of a social platform for 0.57 million), as well as Milly-la- Forêt (Maison du Parc Naturel du Gâtinais Français for 1.34 million), and finally Bondoufle (structure and waterproofing of Stade Bobin for 1.1 million)

82 B. THE LOCAL AUTHORITY S 2014 BUDGET APPROPRIATION 1) The Essonne Department, driver of regional solidarity The 2014 budget reflected renewed determination as regards the priorities of the Essonne Department. It will continue to fulfil its mission to provide basic social protection to the most vulnerable and will support investment and jobs. It will work hard to stay on track with the implementation of its plans. a) Social action policies - 82-

83 The social action policy encompasses all measures for children and families, the elderly, people with disabilities as well as public health. Operational expenses totalled million in the 2014 budget appropriation (including the Departmental Children & Family Institute IDEF), almost unchanged on the 2013 budget appropriation (2013 budget appropriation: million change: +0.12%). Investment expenses, for their part, amounted to 9.22 million in the 2014 budget appropriation, up 7% on the 2013 budget appropriation (amount 8.6 million). The budget for the children and family sector (Main budget and IDEF) amounted to million in terms of operating expenses in the 2014 budget appropriation (2013 budget appropriation: million change: +0.11%) including million for the IDEF budget. The Act of March 2007 reforming child protection reaffirmed the goals of this public policy: - to develop preventative actions in order to limit the number of problems, - to introduce measures to provide financial and educational support to families facing difficulties that are likely to seriously endanger the proper development of their children (home educational support, family and social inclusion specialist (TISF)); - to promote children s interests, meet the needs of minors in the care of the ASE (Aide sociale à l'enfance child welfare bureau), monitoring their development together with their parents. The General Council approved the 3rd departmental plan for children and families , reflecting the desire to focus on a comprehensive multidisciplinary approach to its child protection and prevention responsibilities, encompassing various departmental public policies relating to mother and child protection (protection maternelle et infantile, or PMI), adoption and specialised prevention. The operating expense budget for the people with disabilities sector totalled million (2013 budget appropriation: million change: -0.67%. This sector encompasses the credits allocated by the General council to deal with adults with disabilities in line with the mandatory responsibilities transferred to it under the Social Action and Family Code. Since 1998, over 1,000 places for adults with disabilities have been created and funded by the General Council. The 2013/2018 departmental plan for people with disabilities adopted on 25 March 2013, reaffirms the priority nature of this public policy, with the goal being to improve the service offering and meet the needs of people with disabilities in the Essonne Department. Operating expenses for the elderly sector amounted to 94 million in the 2014 budget appropriation (2013 budget appropriation: 92.7 million change: +1.42%). Estimated expenses in this sector are up 1.42%, reaffirming the priorities of the Essonne Department in particular through the preparation of the departmental plan for the elderly, which set out the following three priorities: - make a positive contribution to quality of life; - empower the elderly in urban areas; - partner up with local institutional players and optimise the efforts of professionals. This change is driven by an increase in the number of places being offered as well as an upward revision of accommodation expenses for the elderly in the care of the General Council in terms of social support, and an almost unchanged level of expenses being allocated to keeping the elderly in their homes. For 2014, the public health sector budget was set at 3.9 million (2013 budget appropriation: 3.9 million change: %). This budget makes it possible to pursue the General Council's work regarding preventative medical and social actions for prospective parents, pregnant women and children under six as well as supporting the departmental health policy to prevent TB, sexually transmitted diseases such as AIDS, and promote cancer screening. For 2014, the budget for the multidisciplinary social action sector amounted to million (2013 budget appropriation: 1.34 million change: -4.25%). This sector primarily involves the financing of various services such as the allowance paid to the hotel reservation centre, French sign language and foreign language interpretation expenses, the MASP (mesure d accompagnement social personnalisé personalised social support), the organisation of events for people with disabilities and the elderly. b) Social inclusion policies The "social inclusion" policy encompasses all measures taken to help vulnerable sections of society and includes the new jobs sector, measures for young people, social housing, social and urban cohesion, the solidarity sector with in particular the financing of the earned income supplement (revenu de solidarité active, or RSA) and, finally, preventing and combating discrimination million in operating expenses was thus included in the 2014 budget appropriation (2013 budget appropriation: million change: +9.25%) and million in payment credits for investment (66% of expenses for social housing) (2013 budget appropriation: 24.5 million change: -12.5%). We therefore need to highlight three policies that have the full backing of the Essonne Department: New jobs - 83-

84 A 0.55 million credit is included in 2014 to support the progressive phasing out of the subsidised employment scheme (130 positions funded). At its 17 December 2012 meeting, the General Council made a major commitment to the emplois d avenir scheme. At the meeting, the General Council approved the creation of 100 emplois d avenir positions internally as well as 200 emplois d avenir positions in the social and health & social establishments. In parallel, it undertook to co-finance 200 positions in the voluntary sector. This scheme is rolled out in Essonne thanks to close cooperation between the various public employment agencies: Pôle emploi, Missions locales, Cap emploi and the units of the General Council. A 0.35 million budget was established for 2014 to help with job creation by associations in Essonne, work-based integration programs (IAE), cooperatives and foundations. As regards the DLA (dispositif local d accompagnement - local support scheme), 53,000 was set aside in 2014, which was to be renewed at end-2013 (call for proposals by the State). Housing policy 2014 will be the first year of implementation of the General Council's new goals in the housing sector, approved by the Departmental assembly on 25 November 2013: to meet the housing challenge, outlined in an action plan. The main goal of this plan is to combine its efforts to build and restore housing (social or private) with support for housing players public and private, industry professionals and end-users in order to promote a more inclusive housing policy, more targeted on top-priority groups and fully aligned with the responsibilities of the General Council. The key actions of this new policy are as follows: - the signing of the energy efficiency renovation charter in February 2014 followed by the launch of an energy efficiency renovation platform in the autumn; - the launch of the regional and themed calls for proposals set out in the accommodation-housing action plan; - the application of the FSL's new rules of procedure to provide better support to families in difficulty. Furthermore, 2014 will see the inauguration of accommodation programmes funded by the General Council: home for young workers in Juvisy-sur-Orge; a facility for the elderly in Bruyères le Châtel; an inter-generational accommodation programme in Evry; transition home for people with mental disabilities with 21 accommodation units in Pussay (start of the year); residential facility for elderly people with 70 accommodation units in Sainte-Geneviève-des-Bois (Q3); residential facility for elderly people with 66 accommodation units in Bruyères-le-Châtel (Q4); residences for elderly people with 44 accommodation units in Savignysur-Orge (Q4); home for young workers with 91 accommodation units in Juvisy-sur-Orge (Q4); inter-generational programme with 104 accommodation units in Evry (Q4); residential facility for elderly people with 73 accommodation units in Brunoy (Q1 2015). Youth policy The total operating budget is 6.1 million (2013 budget appropriation: 7.8 million change: -22%) for 2014, with 800,000 in investment (2013 budget appropriation: 1.96 million - change: %). Support for youth autonomy and participation involves, amongst other things, the 2014 "Carte jeune" scheme, designed to raise the level of penetration by 3 per cent compared with 2012, i.e. 55% of the age group targeted by the carte jeune. Benefits of 3,638,393 (operating expenses 2013 budget appropriation: 4.4 million) will be provided under the "Carte jeune 91" along with 800,000 in investment credits for the purchase of digital equipment. Job search support for young people is funded in the amount of 1.6 million (2013 budget appropriation: 1.4 million change: +15.1%) and E2C (école de la deuxième chance - second chance school) 0.15 million (2013 budget appropriation: 0.14 million - change: +7.1%). E2C provides 190 young people in Essonne with courses built around basic retraining, career development and professional training. Solidarity policy This sector is heavily affected by social and economic realities and the effects thereof, which have a significant knock-on effect on the credits allocated to pay the earned income supplement (RSA). The credits proposed in the 2014 budget appropriation (funding allocations, subsidised contracts and related expenses) amounted to circa 138 million (2013 budget appropriation: million change: +12.1%). The expenses associated with the earned income supplement, subsidised contracts and related expenses are estimated at million (2013 budget appropriation: million change: +14.4%). The expenses associated with the integration of recipients of the earned income supplement ( 8.1 million (2013 budget appropriation: 8.3 million change: -1.9%) reflect the implementation of the departmental integration programme (PDI) adopted in March c) Education policy - 84-

85 With 32.1 million in operating expenses, the 2014 budget is 4.4% up on the 2013 budget (2013 budget appropriation: 30.7 million) to reflect all the sector's major challenges, and enable: - the implementation of a new school meals support system, approved in 2013, fairer for families and more attractive than the previous one and resulting in a marked increase in school meals take-up since the start of the new school year in autumn 2013; - the roll-out of digital work environments (ENT) in 44 additional junior high schools at the start of the new school year in autumn 2014, thereby ultimately providing all 100 junior high schools in the department with access to this collaborative platform, bringing together the whole educational community; - the roll-out of the "réussir sa 6ème" programme across half the junior high schools; - the development of the 3rd internship platform, with over 500 internships offered at end-2013; - the distribution of Numériclé to first year junior high school students; - basic first-aid training for second year junior high school students; - taking on board of mandatory requirements regarding the financing of private junior high schools under contract. (i). Construction, restoration and major repairs in the junior high schools sector In terms of operating expenses, the 630,000 budget allocated for 2014 (2013 budget appropriation: 760, change: %) will be focused on maintenance work, in order to ensure that buildings are kept in normal operating condition until the end of their expected lifespan. This work is not long-term in nature (painting, plumbing, etc.). In terms of investment expenses, the Department will allocate, in the 2014 budget appropriation, million in payment credits for work on junior high schools, (2013 budget appropriation: 39.4 million change: -1.8%), with 5.2 million being allocated to maintenance and major repair work. This work is on health and safety issues and the maintenance of heritage buildings. (ii). The operation and maintenance of junior high schools sector In terms of operating expenses, a 19.3 million budget will be allocated to this sector in 2014, representing a 3% change on the 2013 budget appropriation (2013 budget appropriation: 18.7 million). This budget includes: - grants to junior high schools (main grant, supplementary grants, extraordinary grants, catering contracts); - the launch of surveys in schools and the introduction of Organic food in partnership with Gab Ile de France; and - the rolling out of digital equipment in junior high schools ( 1.39 million). Operating grants for state junior high schools are set at million in the 2014 budget appropriation (2013 budget appropriation: 17.5 million change: +1.5%). In addition, 5 million was included in the 2014 budget appropriation for investment expenses. The budget was increased from 2013 (2013 budget appropriation: 3.98 million change: +26.9%), as a result of the roll-out of new devices such as tablets, the equipment of technical officials of junior high schools and the upgrading of computer networks in junior high schools. This thus involves the purchase of computer hardware and furniture and provides for the upgrading of a portion of the vehicle fleet of junior high schools. In addition, the school meals unit began an initiative to share vehicles for meal distribution. d) Spatial planning policy This policy will involve 10.2 million in operating expenses in the 2014 budget appropriation (2013 budget appropriation: 11.1 million change: -8.1%) and 32.5 million in investment expenses in the 2014 budget appropriation (2013 budget appropriation: 42.7 million change: -23.9%. This policy encompasses support for the agricultural sector and for spatial planning but also encourages economic development with grants to many Essonne Department partners. e) Transportation policy On the investment side, a total of million in programme funding was approved for "roads", an increase of 31.73% on the million approved in the 2013 budget appropriation. With respect to operating credits, there was an increase of 3.7% compared with the 2013 budget appropriation. They totalled million in the 2014 budget appropriation (2013 budget appropriation: 64.5 million). In the transportation sector, under operating expenses, 56.9 million in payment credits are provided for in the 2014 budget appropriation (i.e. an increase of 4.7% on the 2013 budget appropriation (2013 budget appropriation: 54.4 million)). The main expense line item, totalling 35.5 million (2013 budget appropriation: 33.2 million change: +6.9%), stems from the delegation of responsibilities from the STIF (syndicat des transports d Ile-de-France - the transport authority in the greater Paris region) to the Department with regard to school transportation on special routes and for the transportation of students with disabilities. A budget of 4.9 million (2013 budget appropriation: 5 million change: -1.8%) is also provided for the management of travel passes enjoyed by the elderly and people with disabilities (Améthyste rubis pass and taxi vouchers), carried out by the Transportation Department since

86 Furthermore, the Department's contribution to the STIF's budget represents a mandatory expense of million in the 2014 budget appropriation (2013 budget appropriation: 12.1 million change: +2%). The line item for the "maintenance and repair" of passenger shelters provided to the municipalities by the Department totals 0.42 million in the 2014 budget appropriation compared with 0.40 million in the 2013 budget appropriation. The cost of running the special transportation service for people with disabilities (PAM91) is estimated at 3.47 million in the 2014 budget appropriation, slightly up on the amount provided for in the 2013 budget appropriation ( 3.37 million). The "support for the improvement of transportation" programme will receive 120,000 primarily for the development of on-demand transportation in rural areas. Finally, 120,000 is allocated to maintaining the segregated lane public transport network (TCSP) between the RER station at Massy and the École Polytechnique de Palaiseau and its green areas. With respect to investment expenses, 42.5 million is provided in new programme funding, in particular for the Department's contribution to the development of the "Massy-Évry tram-train", the estimated cost of which is 436 million ex VAT under 2011 economic conditions. With respect to the departmental roads sector, some 9.87 million in payment credits have been set aside for operating expenses in the 2014 budget appropriation (2013 budget appropriation: 10.1 million change: -2.1%) for the maintenance of the departmental road network ( 5.87 million budget appropriation: 7.96 million change: -26.2%), the maintenance of transferred national roads of local interest ( 1.3 million budget appropriation: 1.5 million change: -16%) and winter maintenance ( 2.03 million - new programme in 2014). The Essonne Department is prioritising its capital strategy, cutting its operating expenses in order to be able to spur investment credits. A 2.76 million budget was also set aside in 2014 for repairs and major development of non-departmental roads (2013 budget appropriation: 3.35 million change: -20.1%). 2) The Essonne Department at the heart of a better society a) Environment policy In the 2014 budget appropriation, 2 million in payment credits was set aside for operations (2013 budget appropriation: 2.1 million change: -3.6%) and 12.4 million for investment (2013 budget appropriation: 15.6 million change: 15.6 million). The credits set aside for the environment policy were for the implementation of decisions made by the General Council with respect to water (water resource management, river management, water treatment and flood control), waste, environmental protection and sensitive natural areas. b) Cultural policy In the 2014 budget appropriation, the department set aside 8.75 million for operations (2013 budget appropriation: 8.6 million change: +1.6%) and 4 million for investment, (2013 budget appropriation: 4.8 million change: -16%) to fund its cultural policy, including: - support for cultural activities (visual arts, cinema and artistic studies in the Le Plan 2 hall); - conservation and upgrading of heritage properties (grants given in previous years for the restoration of historic buildings and cultural heritage); - funding of the Chamarande and Méréville domains and investment in particular on the departmental Domaine d Etiolles, the Essonne Department media library and regular library and the Foujita house and study; - supporting local areas and cultural operators (support for operators (equipment, networks, etc.)) associations and public bodies whose reach, resources or mission extend beyond the inter-municipal area in which they are located; - grants for those involved in art, culture and heritage, primarily voluntary associations, which represent the backbone of local cultural creation and heritage studies; - support for local projects designed to support any public or voluntary body operating in an area that generally doesn't extend beyond the geographical boundaries of its local EPCI (public establishments for cooperation between municipalities), and involving one or more projects covering one or more of the priorities set out in the new departmental cultural policy. c) Sports, leisure and voluntary sector policy In the 2014 budget appropriation, investment expenses totalled 3.77 million (2013 budget appropriation: 3 million change: +22.6%) and operating expenses 8 million (2013 budget appropriation: 8.1 million change: -0.2%). As part of this policy, the General Council supports decentralised cooperation, develops and implements the sports policy and assists the voluntary sector. In terms of decentralised cooperation, the credits make it possible to pursue the General Council's efforts with respect to the Essonne international cooperation network and provides support for various cooperation programs with Tunisia, Mali, Haiti and Quebec

87 In terms of the sports policy, a new sports policy was adopted by the General Council on 17 December The General Council encourages club membership, promoting sport that is responsible, educational and open to all, thereby increasing the appeal and sporting identity of our department, while endeavouring to support people with disabilities, both in terms of access to infrastructure and of participation in all sports. The third sector covered by this policy is the voluntary sector, which is supported and encouraged by the General Council. Voluntary associations in fact play a major role in local life and social cohesion, particularly during the current period of economic, financial and social crisis. d) Public safety policy The credits in the public safety policy are mainly for the payment of the contribution to the SDIS (Service Départemental d'incendie et de Secours the departmental fire and rescue service). The General Council's contribution to the SDIS amounted to million in the 2014 budget appropriation (2013 budget appropriation: 93.8 million change: -0.3%). This sum represents the implementation of the annual partnership agreement between the two entities. This contribution, made on the basis of the service being rigorously and responsibly managed, will allow the various challenges regarding risk coverage to be addressed. By mobilising all SDIS units it has been possible to optimise overheads, resulting in costs being cut over the 2008/2012 period, and to work on price negotiations and procurement terms and conditions. With respect to employee expenses, which account for circa 80% of actual operating expenses, they increased 1.9% over the period. The SDIS pays particular attention to this area, which is affected by various structural reforms. In fact, the reforms introduced seek to safeguard the working conditions of SDIS employees, against the background of a changing legislative landscape (revamping of sectors, compliance with the European working time directive, etc.). On top of the amount in the agreement, it is necessary to add the General Council's contribution to the funding of basic life-saving training for junior high school students ( 109,300) and the 83,000 budget set aside to help with the maintenance of the department's winter maintenance vehicles. At the same time, the Department has set aside a 500,000 investment subsidy (same as in 2013), which will help the SDIS to plan its expenses. 3) Revenues constrained but no resort to additional taxation More complete information on the revenues estimated in the 2014 budget appropriation can be found in the table in section C1 of the description of Issuer herein. Anticipated operating revenues were estimated at 1,144 million in the 2014 budget appropriation (versus 1,120 million in the 2013 budget appropriation). This represents an increase of +2.2%, 0.9 per cent above the inflation anticipated by the government in the Finance Act. "Local taxes" (for accounting purposes, namely those recorded in account 73, i.e. 431 million) were up 5% on the 2013 budget appropriation ( 410 million) but 1% on the 2013 administrative accounts ( 427 million). The difference was the result of the very sharp increase in the corporate value added tax (CVAE) (+11.20%) in In fact, in the absence of historic data (the first CVAE payment only dating to 2011) and the poor outlook, the amount in the 2013 budget appropriation was practically unchanged on its 2012 amount (+ 800,000). The very small change vis-à-vis the 2013 administrative accounts is due to the decline in the CVAE (- 6.7 million) which was nevertheless offset by the allocation of a portion of the developed property management expenses (+ 6.9 million), a new measure introduced by the 2014 Finance Act to improve the financing of the personal welfare supplements and allowances. The increase ( 4.5 million up on the 2014 budget appropriation) is thus solely due to the change in the developed property base (an increase of 1.8% representing a 0.9% flat-rate increase and a corresponding physical increase). It should be noted that this expectation was confirmed by actual receipts because the difference between actual income (2013 administrative accounts) and forecast income (2014 budget appropriation) is only 0.3% (i.e. 1.2 million above 431 million). Following the reform of the business tax in 2011, the property tax on developed property now includes the region s as well as the equivalent of a portion of the recovery costs previously received by the State. This rate, calculated in 2010 values, has not been changed since 2011 in order to maintain an equivalent tax burden. The difference between the rate in the Essonne Department and national averages more than doubled, since it is now 19.8% below average departmental rates (compared with 8.5% in 2010). The indirect taxes include the proceeds of the stamp duty on conveyance for consideration (DMTO) ( million in the 2014 budget appropriation) with Essonne, like most departments, taking advantage of the option available to it to increase the rate. This measure, along with the transfer of developed property management expenses, forms part of the improvements to the financing of personal welfare supplements and allowances. In the 2013 budget appropriation, the anticipated amount of stamp duty on consideration was 150 million

88 Anticipated revenues from the domestic consumption tax on oil products (TICPE) were unchanged on the income collected in 2013, as this tax isn't subject to much variation (i.e million in the 2014 budget appropriation). The special tax on insurance contracts (TSCA) rose 1.4% between administrative accounts but was conservatively included in the 2014 budget appropriation at an amount slightly under the income collected in 2013 ( 127 million, 800,000 down on the 2013 budget appropriation). Since 2011 (first year in which the business tax reform was applied), it has increased at an average annual rate of +4.4% with a spike in 2012 (8% increase). Urban planning taxes have to date risen in a relatively steady manner. The replacement of the two former departmental taxes (TDCAUE and TDENS) with the regional development tax (TA) from 1 March 2012 (but with collection theoretically beginning on 1 March 2013) disrupted this. The issue of receipts is now centralised by the departmental regional management department (DDT) but the implementation of this measure is seven months behind schedule. The proceeds of this tax, which had on average been 11 million, dropped to 9 million in should see a resurgence. The amount in the 2014 budget appropriation ( 11.4 million) is based on a very gradual return to normal but a more marked resurgence cannot be ruled out. The forecast amount in the 2014 budget appropriation for the electricity tax on consumers (TFCE) is also highly conservative ( 11.4 million), as it is 4% below the income collected in 2013 ( 11.9 million). Proceeds should exceed 12 million, particularly given that the Department decided to increase the flat-rate multiplier (+2%). Allocations (set at million in the 2014 budget appropriation) are expected to fall (-4% compared with the 2013 budget appropriation in which they had totalled million, -5% compared with the 2013 administrative accounts in which they came in at million) in accordance with the solidarity agreement between municipalities and the State to help reduce the public deficit. The overall operating allocation (DGF) will be cut by circa 10 million, falling 6% to million. Final investment proceeds (i.e. revenues before borrowing and excluding deductions from the operating section), consisting of allocations and grants, totalled 40.4 million in the 2014 budget appropriation, less than the amount included in the 2013 budget appropriation ( 43 million) but 2.7% up on the 2013 administrative accounts ( 39.3 million). The 2014 budget is balanced without any tax adjustment. C. DEBT AND CASH 1. Management built on zero cash principles The regulatory principle of the separation of the authorising officer (the President of the General Council) from the accountant (the Treasury and in this instance the departmental Paymaster) means that cash flow matters are managed by the departmental Paymaster. Unlike with a company s cash position, the General Council s cannot be negative and has to be lodged with the Treasury interest-free, except in certain specific circumstances 1. No cash investment has yet been made, the department having preferred to apply the zero cash principles, which offer greater financial benefits. In order to avoid paying unnecessary financial expenses while retaining a surplus cash position, the Essonne General Council has since 1991 had a policy of managing its cash in such a way as to reduce its end-of-day balance to zero. In fact, excess cash represents an opportunity cost that should be avoided. In this respect, the arrangement of a credit facility has meant that the local authority has, throughout this long period, been able to actively manage its cash by just covering all its expense commitments on a daily basis, either by means of drawdowns, in the event of revenue shortfalls, or by means of repayments, in the event of revenue surpluses, and in this way satisfies the obligation to never have a negative cash balance. Nevertheless, since the September 2008 financial crisis and the unfolding of the European sovereign debt crisis, there has been a change in the banking options available in this segment, primarily as a result of the liquidity crisis. Thus, a scarcity in bank financing has been noted since Autumn 2011, when financial institutions virtually stopped offering options such as committed lines 1 Local authorities are authorised to invest funds from: Donations (gifts and bequests) Asset sales Loans that can t be assigned to an investment for reasons beyond the control of the local authority Extraordinary income from: - Insurance indemnities - Litigation - Proceeds from public sales following events of force majeure (e.g.: sale of wood following the 1999 storm) - Contractual indemnities received In order to invest any such funds, as appropriate, the General Council passed a resolution on 15 December

89 of credit. As a result, the Department changed its management style to reflect the changing financing instruments, making more extensive use of revolving facilities in 2011, and in July 2011 arranging a short-term non-bank financing programme that will be used from January The crisis has had a fairly profound effect on the landscape of available products and indeed on product characteristics, in terms not only of rates but also as regards financial terms and conditions. Following a 2012 in which there was a significant tightening in bank credit, a number of credit institutions once again offered credit facilities in However, revolving facilities, which allow short and long-term financing to be combined, completely disappeared, leaving the Department with only a single flexible financing instrument, initially agreed in December 2005 for 60 million, this threshold being reduced by 6 million on 31 December every year from 2011 to In 2013, the General Council had only one remaining revolving facility. a) Banking instruments used for cash management in 2013 In December 2005, the General Council had entered into a 60 million loan agreement, repayable in equal instalments over a 10- year period from 2011, and which may be used on a revolving basis until expiry in This agreement, the maximum amount of which tapers between end-2011 and end-2020, offers financial terms (spread and non-use fees) that are exceptionally favourable (spread of EONIA plus 0.045%) in the current environment (at end-2013 the spreads offered on the same EONIA index were circa 1.60%, i.e. almost 40 times higher than in 2005), has been the first port of call since early 2008 for cash management purposes. For 2013, a 20 million credit facility was arranged in early January with Caisse d Epargne at EONIA plus a spread of 2.20% plus a commitment fee of 0.10% and a non-use fee of 0.25%. A second instrument for 30 million was arranged in July 2013, once again with Caisse d Epargne on the same EONIA index plus 1.60%. It was used as back-up (or guarantee) facility for the General Council's commercial paper issues up to 31 December A tender was launched in Autumn 2013 to renew the cash management instruments for one calendar year. Only three credit institutions bid, Caisse d Epargne Ile-de-France Paris, Banque Postale and Société Générale. In addition to a requirement for a 26 million credit facility, the tender also included a 40 million back up facility for the commercial paper programme. On the basis of the proposals submitted by the credit institutions, the most favourable bids were selected. Two 13 million credit facilities were arranged for 2014 with Caisse d Epargne at EONIA plus 1.50% and La Banque Postale at EONIA plus 1.58%. The back up facility was awarded to La Banque Postale on the basis of a commitment fee and a non-use fee of 0.10% each, representing an annual cost of circa 80,000. b) A commercial paper programme with an average of 6.74 million outstanding in 2013 (versus 39.5 million in 2012) The commercial paper programme arranged in July 2011 for a theoretical maximum of 160 million was used at an average monthly rate of 6.74 million and an annual cost of 6,270 in 2013 (versus 103,735 in 2012). The non-renewal in 2013 of the flexible revolving credit agreement under which the department had access to 150 million since 2010 forced the local authority to adopt a different policy to meet its cash requirements compared with the previous year in which cash peaks following receipt of a long-term loan could be used to temporarily pay down the revolving instrument. Accordingly, the cash profile showed a surplus at certain times of the year, automatically resulting in less use of commercial paper which was only used nine times in 2013 for an average of 6.7 million (versus twelve issues in 2012 for an average of million) financial expenses (interest expenses and commitment or non-use fees) amounted to 136,229 (versus 409,119 in 2012), including 59,265 for revolving instruments, 70,106 for credit facilities and 6,858 in commercial paper costs. This sharp fall in the financial expense of using cash management instruments was due to a more surplus cash profile in 2013 than in 2012, accordingly resulting in less use of cash management instruments

90 Departmental cash before and after short-term funding as of end of December solde du compte au trésor Encours des financements revolving,lignes de trésorerie et billets de trésorerie Trésorerie naturelle avant financement Encours Billets de trésorerie Cash profile in , , , , , , ,00 0, , , , , , , , , ,00 0,00 Off line cash-in Total outstanding amount (right scale) Off line cash-out - 90-

91 Cash profile in janvier février mars avril mai juin juillet août septembre octobre novembre décembre Cash-in off cash lines, commercial papers and debt Cash-out off cash lines, commercial papers and except debt Outstanding amount for revolving funding, cash lines and commercial papers Use and average cost of funding instruments for cash management from 2009 to , , , , , , , , , ,00 0,00 Quarterly average amount outstanding (left scale) Financial costs (right scale) 2. Debt position at 31 December 2013 At end-2013, the outstanding medium-long term debt stood at million (versus million at 31/12/2012) including a 42 million revolving loan, successively repaid on 8 January 2014 ( 8.4 million), 9 January 2014 ( 0.4 million) and 27 January 2014 ( 32.2 million). The debt at 31 /12/2012 stood at million including 48 million in revolving loans repaid on 8 January 2013 ( 25.6 million), 10 January 2013 ( 0.5 million), 11 January 2013 ( 4.7 million) and 25 January 2013: 17.2 million. a. Breakdown of and changes in outstanding debt Debt at money market rates After swaps, 59.94% of the total debt ( million) was at money market rates (2012: 58.94% of the total debt, million): - EONIA (4.88% of the total debt 2012: 5.66%), - 3-month rolling annual rate (TAG) (15.17% of the total outstanding amount 2012: 17.82%) - 1-month Euribor (25.99% of the total debt 2012: 27.35%) - 3-month Euribor (13.91% : 8.11%) - Livret A rate (0.79% %). Fixed-rate debt - 91-

92 The remaining outstanding amount ( million, 39.27% at 31/12/2013, million at 31/12/2012, 40.20%) is fixed-rate. The average interest rate on the debt at 31 December 2013 was 1.41% before hedging (1.41% at end-2012) and 1.67% after hedging (swaps) (1.59% at end-2012). It should be noted that the Essonne General Council s debt does not currently include, nor has it ever, any structured product or structured debt of any type. The General Council s debt at 31 December 2013 was wholly denominated in euros, totalling million, and was drawn from 45 facilities, loans directly denominated in euros and in the case of the final facility, bonds totalling 300 million Hong Kong dollars (HKD), at a fixed rate of 3.90% per annum (quarterly payment), with a 10-year maturity and repayable at maturity (16 July 2019) hedged in euros by means of a cross currency swap arranged with HSBC for the duration of the bond, by virtue of which the General Council received million and the swap counterparty bank 6-month Euribor +0.90%, given that the flows denominated in Hong Kong dollars, both revenues and expenses, are fully netted by HSBC. The outstanding debt stood at million at 31 December 2013 ( million at 31/12/2012), including both fixed and indexed debt, bank loans and bonds, with the bank loans being from seven lenders (seven in 2012) and five placing banks for the bonds (five placing banks in 2012). The breakdown is set out below: Debt category Banks (banking debts) Or placing agent (bonds) Outstanding Capital as of 12/31/13 % total debt Outstanding Capital as of 12/31/12 Banking debt - Classical borrowing Banking Debt - Multi-options borrowing CREDIT AGRICOLE ,80 2,93% ,20 SFIL CAFFIL ,02 4,76% ,35 Sub-total ,82 7,69% ,55 CAISSE D'EPARGNE ,33 16,67% ,00 CREDIT AGRICOLE ,23 16,51% ,10 CREDIT FONCIER DE FRANCE ,84 3,82% ,38 Dexia CL ,47 2,00% ,64 SFIL CAFFIL ,42 15,77% ,04 SOCIETE GENERALE ,80 2,32% ,60 Sub-total ,09 57,09% ,76 Banking Debt Revolving borrowing Banking Debt Political borrowing of the city SOCIETE GENERALE ,00 4,88% ,00 Sub-total ,00 4,88% ,00 Caisse des Dépôts et Consignations ,00 0,79% ,00 Sub-total ,00 0,79% ,00 BNP-PARIBAS ,00 1,97% ,00 Dexia Capital Markets ,00 1,16% ,00 Bonds HSBC ,00 11,90% ,00 NATIXIS ,00 12,19% ,00 SOCIETE GENERALE CIB ,00 2,32% ,00 Sub-total ,00 29,55% ,00 General Total , ,31 Bank debt - 92-

93 At end-2013, the bank debt accounted for 70.45% of the total debt, standing at million (versus million at 31/12/2012) with an average maturity of 5 years (5 years and 3 months at 31/12/2012). The average interest rate was 1.10% before swaps and 1.27% after swaps (1.09% before swaps and 1.32% after swaps at 31/12/2012). Comprising 19 basic agreements, spread across seven traditional lenders (in descending order: SFIL/CAFIL resulting from the dismemberment of DEXIA, Crédit Agricole, Caisse d Epargne, Société Générale, Crédit Foncier de France, DEXIA CL (following dismemberment) and Caisse des Dépôts et Consignations), the bank debt is split into four types of agreements. "Traditional" agreements amounting to million at 31/12/2013, i.e. 7.69% of the outstanding amount and solely consisting of fixed rates (versus million at 31/12/2012, i.e. 9.58% of the total outstanding amount). "Multi-option" agreements, representing the bulk of outstanding debt and standing at million, i.e % of the outstanding amount at 31/12/2013 (versus million at 31/12/2012, i.e % of the total outstanding amount). They particularly offer the opportunity for arbitrage between various floating rates or with a fixed rate. Some of these agreements may initially have had revolving type drawdown and repayment options resulting in their classification in the revolving loans accounting category. However, once these options expire, all related facilities are transferred at the end of the revolving period to the accounting category for euro loans with no option for opening credit facilities. A "metropolitan policy" agreement for an initial period of 25 years indexed to the Livret A rate without any spread representing 0.79% of the outstanding amount, i.e million at 31/12/2013 (versus 7.29 million at 31/12/2012, i.e. 0.86% of the outstanding amount). Finally, 42 million in revolving loans (4.88% of the outstanding amount) had been drawn down at end-2013 following the reduction in the ceiling and the repayment of 6 million as part of the active and combined debt and cash management ( 48 million at 31/12/2012, i.e. 5.66% of the total outstanding amount). The revolving amount available in 2013 was under an agreement entered into in December 2005, for 60 million, repaid from 2011 over a 10-year period at a rate of 6 million per annum. In 2013, 48 million had been drawn down and repaid at year-end. The agreement also offers the option of consolidating at fixed rate or floating rate (EURIBOR or TAG, TAM) drawdowns made up to 31 December in any year and of repaying them in equal instalments up to A combination of these two options is also possible. Bonds Launched in July 2009, the bonds included, at 31 December 2013, 13 financing transactions with final term sheets. At 31 December 2013, a total of million in bonds had been placed by five banks (i.e % of the total debt, versus 20.56%, million at 31/12/2012), including (versus the total debt): NATIXIS (12.19%); HSBC NATIXIS (11.90%); Société Générale CIB (2.32%); BNP-PARIBAS (1.97%); and DEXIA Capital Markets (1.16%). At 31 December 2013, it was held by: - insurers % of the bonds (48.42% at end-2012); - asset managers % of the bonds (11.46% at end-2012); - mortgage banks 15.72% of the bonds (22.92% at end-2012); and - institutional investors 11.78% of the bonds (17.19% at end-2012). A geographic breakdown of investors put Asia (Hong Kong) at 10.80% (15.75% at end-2012) and Europe at 89.20% (85.27% in the Eurozone) including: o o o o o 37.33% in Germany (48.71% at end-2012); 37.33% in France (20.06% at end-2012); 6.68% in Belgium (9.74% at end-2012); 3.93% in Austria (0% at end-2012); 3.93% in Switzerland (4.89% at end-2012). Following the AMF s approval of the update to the EMTN programme arranged by HSBC on 26 July 2013, the General Council used its EMTN programme to obtain 80 million in bond financing in Although it had been management policy to have recourse to non-bank financing (EMTN programme) for 1/3 of the total outstanding amount and to bank financing for 2/3 (of the total outstanding amount), the substantial withdrawal of credit institutions from local authority financing has meant that this local authority is making increased use of its bond programme, all the more so in that the spreads applied to bank financing continued to be high throughout 2013 and above the terms and conditions obtained through bond issues

94 Thus, the average spread above the 6-month Euribor across the three bond issues in 2013 was 0.85% whereas the same average spread in the bank sector in 2013 was at least 1.60%, i.e. a difference of 0.85%, and representing an annual budget gain in the first year of 680,266 on the 80 million borrowed, or a present value gain of million over a 10 year period. There were three issues under the EMTN programme in 2013: - The first issue, placed by NATIXIS, was on 20 March 2013 for 30 million with a maturity of 12 years, repayable at maturity, at a fixed rate of 3%. - The second issue, placed by NATIXIS, was on 4 December 2013 for 30 million with a maturity of 13 years, repayable at maturity, at a fixed rate of 3.10% swapped for 3-month Euribor % for the duration of the bond. - The third issue, placed by NATIXIS, on 5 December 2013 in two 10 million tranches, i.e. 20 million in total, with a maturity of 13 years, repayable at maturity, at a fixed rate of 3.10% swapped for 3-month Euribor %. b. Interest rate risk management: a major aspect of the financial strategy Fixed rates protect borrowers from interest rate rises. However, they don t allow them to benefit from falls. Conversely, floating rates don t protect borrowers from interest rate rises, but allow them to benefit from falls. Accordingly, since interest rate movements are pretty uncertain, the best protection is to diversify the debt portfolio between fixed and floating rates. This is what the Issuer endeavours to achieve by splitting its debt into fixed and floating rates. To this end, the Issuer has recourse to the various interest rate risk management tools available to it, firstly, under the various loan agreements and, secondly, on the OTC markets via interest rate risk hedging instruments. c. Arbitrage between fixed rates and floating rates as well as between the various indexes The General Council has regular recourse to arbitrage with respect to its loans and credit facilities indexed to floating rates in order to continually minimise interest expenses. During periods of rising interest rates, it elects to arrange new borrowings at fixed rates of no more than 4%. Conversely, during periods of falling interest rates, it indexes its debt to floating rates and regularly modifies index periodicity in response to yield curve movements. d. Hedging interest rate risk (swaps) At 31 December 2013, the portfolio of interest rate swaps contained twelve instruments put in place between June 2004 and December The notional amount at end-2013 was million ( million at 31/12/2012). Six swaps made it possible to transform an initial fixed rate position into a floating rate (notional million at 31/12/ million at 31/12/2012). Six swaps provided safety by transforming an initial floating rate into a fixed rate position (notional million at 31/12/ million at 31/12/2012). All the swaps, without exception, have been put in place for the duration of the underlying loan. The net position in 2013 for these twelve swaps was a total expense of 4.2 million ( 3.2 million in 2012) and total income of 2.6 million ( 1.85 million in 2012), bringing the net expense to 1.6 million ( 1.35 million in 2012). Floating rate swap contracts: there are six in total. The first transaction was in June 2004 as part of active debt management while two new swaps were put in place in 2013 in order to convert the two fixed-rate bond issues on 4 and 5 December 2013 to floating rates and lock in a floating rate indexed to the 3-month Euribor plus a spread of 0.975%. The swap agreed in June 2004: the local authority would thus pay 3-month Euribor % over a remaining period of 10 years on the million in outstanding principal. Given the interest rate conditions at the time, on 29 June 2004 the local authority repaid its floating rate debt (without incurring fines or charges) and agreed an equivalent refinancing at a fixed rate of 3.86%, which it swapped the same day on identical terms and conditions as regards repayment schedule and duration for 3-month Euribor -0.09%. This transaction thus enabled the department to improve the original terms and conditions of the loan by 0.13% over the remaining duration. In 2013, this transaction generated financial expenses of million ( million in 2012) and financial income of 0.34 million ( 0.49 million in 2012), representing net income of 0.29 million ( 0.43 million in 2012). Three swaps were positioned on three fixed rate bonds in order to convert them into floating rate at 3-month Euribor plus a spread, given the relatively high fixed rate in the first half of 2012 between 3.50% and 4% whereas money market rates, in particular the 3-month Euribor, were well below 1% and remained so in 2013: 20 February 2012: the first swap made it possible to convert on the basis of a notional amount of 25 million a 10-year fixed rate for 3-month Euribor % for the full duration of the bond. The expenses arising from this transaction totalled 0.39 million in Income of million was booked, resulting in a net gain of 0.48 million (net expense of 0.17 million in 2012); 27 February 2012: the 10 million in bonds maturing in November 2021 and bearing interest at a fixed rate of 4% was the subject of a swap that resulted in the department paying 3-month Euribor plus a spread of 1.835% - 94-

95 and receiving the 4% fixed rate. In 2013, expenses of million were booked in connection with this transaction. With income totalling million, there was a net gain of million (gain of million in 2012); 20 June 2012: following a 15 million issue of 10-year bonds at a fixed rate of 3.50%, a third swap made it possible to receive, over the same 10-year duration, a fixed rate of 3.50% and to pay 3-month Euribor plus a spread of 1.69% in the market. A million expense was booked in With income totalling million, there was a net gain of million (net expense of 0.16 million in 2012). Two swaps were arranged on 4 and 5 December 2013 to convert to floating rates two bond issues with a maturity of 13 years, repayable upon maturity, at a fixed rate of 3.10% per annum each, replacing the fixed rate with a 3-month Euribor plus a spread of 0.975%. Neither of these two transactions gave rise to any movement, expense or income in The first maturity dates were in March Fixed rate swap contracts: six other swaps make it possible to receive a floating rate (with or without spread) and to pay a fixed rate. Three of these transactions involve three credit facilities within the bank debt, the latter three each relating to a bond issue. Five pre-2012 swaps Two swaps involving the bank debt were arranged between 2005 and 2006 in a period of rising floating rates. They made it possible to keep the debt at a pretty favourable fixed rate. The first swap was arranged on 30 December 2005 and will expire on 31 December It covers a loan that had million in outstanding principal at 31 December 2013 at an initial rate of 12-month Euribor + an unhedged spread of 0.05%. This index was swapped for a fixed rate of % per annum calculated based on a 360 day year, representing a rate of 3.45% per annum on a full-year basis. For 2013, this hedging resulted in a net expense of million ( 0.17 million in 2012). The second swap was also agreed at end-2005 and covers a loan with 16 million in outstanding principal at end-2013, bearing an initial interest rate of 12-month Euribor (unhedged spread 0.04%). Receiving the floating index, the Department in return pays an annual (full-year basis) fixed interest rate of % to maturity in January For 2013, this hedging resulted in a net expense of million ( 0.28 million in 2012). Four swaps covered the bonds at 31 December They were arranged with the overall objective of locking in the debt as part of a rebalancing of the weighting between floating rates and fixed rates. The bonds were put in place in July 2009, shortly after the Autumn 2008 financial crisis. Given that the financial terms were still high at the time of the initial issues, the local authority decided to opt for a floating rate (6-month Euribor). Given that the yield curve had eased substantially by July 2010, swaps were arranged for the first two issues of 25 million (maturing on 8 July 2019) at 6-month Euribor % and million (maturing on 16 July 2019) at 6-month Euribor +0.90%. The floating rate on the 25 million issue (maturing on 8 July 2019) including the spread was swapped for a fixed rate of % on a full-year basis. The interest rate on the million issue (maturing on 16 July 2019) (including the spread) was locked in by means of a swap for a fixed rate of % on a full-year basis. For 2013, the 25 million % swap generated fixed interest payments of 0.75 million and interest income of 0.22 million, representing a net expense of 0.53 million (in 2012, the interest paid totalled 0.60 million, and the interest received amounted to 0.34 million, representing a net expense of 0.26 million). For the swap with a notional amount of million %, the interest paid in 2013 totalled 0.84 million while the interest received amounted to 0.24 million, representing a net expense of 0.60 million (in 2012, the interest paid totalled 0.67 million, and the interest received 0.38 million, representing a net expense of 0.29 million). The 20 million 7-year bond issue maturing on 8 July 2018 and bearing interest at 6- month Euribor % was the subject of a swap by virtue of which the floating rate was swapped for a fixed rate of % (full-year basis) for the duration of the bond. In 2013, interest expenses totalled 577 million, whereas income totalled million, generating a net expense of million. (in 2012, the interest paid - 95-

96 totalled million and the interest received million, generating a net expense of 0.23 million) The final lock-in swap was entered into in It locked in the historically low long-term rates at end-december This transaction made it possible, on 28 December 2012, to lock in, for a period of 15 years, 70 million in bank debt indexed at 1-month Euribor plus a spread of 0.65% at 2% (spread included). This transaction generated a net expense of 0.84 million in e. Change in the breakdown of outstanding debt by type of rate] DEBT BEFORE SWAPS AS OF 31/12/2009 % 31/12/2010 % 31/12/2011 % 31/12/2012 % 31/12/2013 % Fixed rate 220,860, % 225,658, % 208,457, % 231,256, % 284,054, % Livret A 8,748, % 8,262, % 7,776, % 7,290, % 6,804, % Eonia 165,000, % 98,000, % 154,500, % 48,000, % 42,000, % 1 month Tag 213,041, % 192,433, % 0.00% 10,176, % 8,722, % 3 month Tag % % 171,825, % 151,218, % 130,610, % 12 month Tag % % 0.00% % % 1 month Euribor 77,598, % 190,870, % 167,108, % 302,061, % 289,146, % 3 month Euribor % % 0.00% 10,000, % 15,410, % 6 month Euribor 52,484, % 52,484, % 72,484, % 72,484, % 72,484, % 12 month Euribor 42,537, % 37,084, % 31,630, % 16,000, % 12,000, % TOTAL outstanding 780,270, ,793, ,782, ,486, ,233,646 In order to ensure optimum management of its interest rate risk and thereby keep its financial expenses as low as possible, the General Council is always on the lookout for the best interest rates. - From 2004 to mid-2005: with floating interest rates falling to a historic low of 2%, the General Council favoured indexing to floating rates, thereby reducing financial expenses. - Mid-2005 to end-2006: with fixed rates substantially below 4% and Euribor rising sharply, the strategy was to lock in fixed rates across the board /2008: in light of the sub-prime crisis, the liquidity crisis and widening spreads, the General Council elected to use floating rates and to index floating rate debt to the TAG and EONIA. - End-2008/2010: the accommodating policy of the European Central Bank (ECB) made it possible to primarily employ floating rates, in particular indexed to the EONIA and indexes based on the EONIA, such as the 1-month TAG : in light of the rise in short-term interest rates embodied in two decisions by the European Central Bank (ECB) to raise key interest rates in May and June 2011 and the summer lull in long-term interest rates, the General Council decided to lock in the bonds. Following the cutting of the ECB s primary key interest rate in November and December 2011, the General Council decided to index a portion of the debt to the EONIA 1-day index at end-december : following the continued fall in money market rates to historic lows (EONIA under 0.10% from end summer 2012), the General Council decided to index the February and June 2012 bond issues to 3-month Euribor. The positive change in longterm interest rates at end-2012 made it possible to lock in a portion of the bank debt ( 70 million) at 2% throughout the duration of the loan, namely 15 years : with the outlook for money market indexed rates remaining low, the preference was to index borrowing to quarterly or even monthly floating rates

97 Average rate of departmental debt and market rates from 31/12/2007 to 31/12/ % 4.00% 3.00% 2.00% 1.00% 0.00% 3 month Euribor TEC 10 Overall average debt rate at 31/12 Average fixed debt rate at 31/12 Average Livret A debt rate at 31/12 Average floating debt rate at 31/12 Average rate of the departmental debt and corresponding market rate 3,50% 3,00% 2,50% 2,00% 1,50% 1,00% Ja n Average rate of departmental debt after swap Average rate of reference market for the same maturity - 97-

98 3. Dynamic breakdown of outstanding debt between fixed rates and floating rates 3.00% Short and long-term rates in % 2.00% 1.50% 1.00% 0.50% 0.00% 01/01/ /01/ /01/ /01/ /02/ /02/ /03/ /03/ /03/ /04/ /04/ /04/ /05/ /05/ /05/ /05/ /06/ /06/ /06/ /07/ /07/ /07/ /08/ /08/ /08/ /09/ /09/ /09/ /10/ /10/ /10/ /11/ /11/ /11/ /12/ /12/ /12/2013 ECB refi rate Average overnight rate 3 month Euribor EUR10 year swap rate TEC 10 The General Council adapts the composition of its outstanding debt in response to changes in interest rates. That is why, following the inflation in short-term interest rates in 2005, the General Council decided to lock in a portion of its debt, taking as a reference the very low levels applied up to then. This policy continued until summer 2007, at which point, given the effects of the liquidity crisis on EURIBOR levels, which exceeded 5% in 2008 and then proceeded to fall in response to decisions by the European Central Bank to cut key interest rates. New borrowings are mainly indexed to EONIA and its derivatives (TAG). A rebalancing of the outstanding debt to a higher proportion of fixed rates was undertaken in July 2010 in order to take advantage of the low long-term rates, and this continued in July and October In addition, it was decided to have recourse to arbitrage for loans indexed to 12-month EURIBOR either vis-à-vis short-term EURIBOR (1-month EURIBOR) or TAG. This policy was designed to limit the growth in financial expenses between summer 2007 and autumn 2008, and subsequently to have the positive effects of the cut in the European Central Bank s key interest rates feed into the interest expense for the department s debt, renewed since November This policy was pursued in 2009 and 2010 in order to take full advantage of the decline in money market rates. In 2011, while continuing to lock in its debt by means of swaps or by directly using fixed rates, the average interest rate on the department s debt after swaps was kept well below 2% at 1.88% at 31 December financial expenses were split into the following line items: interest expense on the medium long term debt 13.9 million, swap-related expenses 2.2 million, financial expense of credit facilities and revolving instruments 0.32 million, fees and charges 0.10 million. The swaps put in place cut the overall expense by 1.2 million. Following two consecutive cuts in November and December 2011, the European Central Bank decided in June 2012 to cut its main refinancing interest rate for a third time by 0.25%, from 1% to 0.75%. The EONIA 1-day rate and the Euribor interbank rates followed suit and hit levels of between 0.10% and 0.40% depending on the term. Long-term rates before spreads also continued to fall, as a result in particular of the cleaning up of the sovereign debt crisis and investor thirst for better quality issuers. In 2013, the European Central Bank cut its main refinancing interest rate twice, on 2 May and then on 7 November 2013, by 0.25% each time, from 0.75% to 0.25%. The second instance followed deflationary pressures in the eurozone. The EONIA overnight rate and the Euribor interbank rates followed suit and hit levels of between 0.056% (27 February) and 0.446% (31 December) for the - 98-

99 overnight rate. However, the EONIA did not follow the general downward trend at year-end and rose slightly, notably as a result of a lack of action by the central bank on its deposit rate, which it did not cut and kept at 0%. Long-term rates before spreads initially continued the downward trend, notably due to the easing of the sovereign debt crisis and the quest by investors for better quality issuers, before rising once more following the Fed's announcement of the ending of its accommodative monetary policy and in particular treasury bond purchases. This interest rate risk management policy gave rise to million in total financial expenses in 2013 (2013 administrative accounts) ( million in 2012), split between: million in interest expenses on the medium and long-term debt ( million in 2012); in swap-related expenses ( 3.2 million in 2012); million in financial expenses connected with cash management activities (interest expenses on revolving loans and credit facilities) ( 0.41 million in 2012); - Finally, 0.36 million was paid in various debt-related fees and charges ( million in 2012). Changes in the breakdown of rates after swaps between 2007 and 2014 Rate breakdown at 31/12/2010 Fixed rate/floating rate Répartition de taux au 31/12/ % 63% Taux fixe Taux variables Rate breakdown at 31/12/2011 Fixed rate Floating rate Répartition de taux au 31/12/ % 63% Taux fixe Taux variables - 99-