MONTHLY BULLETIN - N 199 - December 26 DEBT GENERAL DATA... 1 PRIMARY MARKET... 2 SECONDARY MARKET... 4 THE FRENCH ECONOMY... 7 INTERNATIONAL COMPARISONS... 8 FRENCH GOVERNMENT NEGOTIABLE DEBT OUTSTANDING... 9 http://www.aft.gouv.fr Bloomberg TRESOR <Go> - Reuters TRESOR - Pages Bridge Menu 21 278 Available in French and English Publication manager: Benoît Coeuré Editor: Agence France Trésor DEBT GENERAL DATA French government long- and medium-term negotiable debt on November 3, 26 nominal value of each line, 2 2 1 1 27 28 29 21 211 212 213 214 21 216 > 216 BTAN OAT OATi & OAT i BTAN i 2 Non-resident holdings of French government negotiable debt securities as a % of negotiable debt outstanding 61 9 7 3 1 49 47 4 43 8/2** 9/2** 1/2** 11/2** 12/2** 1/26* 2/26* 3/26* 4/26* /26* 6/26* 7/26 8/26 9/26 1/26 Source: balance of payments Note: following the revised figures of the French securities held by non-residents at the end of 2, the Banque de France has readjusted the outstanding amount related to the negotiable Government debt securities held by non-residents in 2 (**). (*) figures quarterly revised (**) figures annually revised
PRIMARY MARKET Auction indicative calendar BTF BTAN / index linked OAT OAT December 26 auction date 4 no auction no auction no auction settlement date 7 - - - - - - January 27 auction date 2 8 1 22 29 18 4 settlement date 4 11 18 2 1 Feb 23 9 anticipated or delayed auctions (bank holidays, etc.) Long- and medium-term financing over the year on November 3, 26 Long and medium-term financing forecast for the year 26 (revised, State and CDP) 1. billion Cumulative realized long and medium-term financing 16.8 billion on November 3, 26 11 1 9 8 7 6 4 3 2 1 realized BTAN realized OAT Jan. Feb. March Apr. May June July Aug. Sept. Oct. Nov. OATs and BTANs issues and cumulative total on November 3, 26 OATs and BTANs: indicative repayment schedule on November 3, 26 BTAN 2.7% 3/28 BTAN 3% 7/28 BTAN 3.% 9/28 BTAN i 1.2% 7/21 BTAN 3% 1/211 BTAN 3.% 7/211 OATi 1.6% 7/211 * OAT i 1.6% 7/21 * OAT 3% 1/21 OAT 3.2% 4/216 OAT % 1/216 OATi 1% 7/217 * OAT 4.2% 4/219 OAT i 2.2% 7/22 * OAT 3.7% 4/221 OATi 3.4% 7/229 * OAT i 3.1% 7/232 * OAT 4.7% 4/23 OAT 4% 1/238 OAT 4% 4/2 1 1 2 2 issued before 26 issued in 26 2 2 1 1 interest redemption 11/6 12/6 1/7 2/7 3/7 4/7 /7 6/7 7/7 8/7 9/7 1/7 * nominal value 2
m OAT and BTAN auctions November 26 OAT 1 years BTAN 2 years BTAN years OATi 1 years OAT i 1 years 1/2/216 9/12/28 7/12/211 7/2/217 # 7/2/22.% 3.% 3.% 1.% # 2.2% Auction date 11/2/26 11/16/26 11/16/26 11/16/26 # 11/16/26 Settlement date 11/7/26 11/21/26 11/21/26 11/21/26 # 11/21/26 Amount announced < 3, -------3, > < 4, -------, > < 1,2 -------1,7 > Bid amount 7,26 4,89,719 2,31 # 1,73 Amount served 3,4 1,86 2,69 99 63 of which: NCTs before auction NCTs after auction 62 143 Total issued amount 3,4 1,86 3,221 1,133 # 63 Bid-to-cover ratio 2.39 2.62 2.23 2.34 # 2.7 Weighted average price 11.33% 99.64% 99.1% 93.24% # 18.4% Yield to maturity 3.74% 3.7% 3.7% 1.7% # 1.9% Indexation coefficient* - - - 1.2122 1.6648 * as of the settlement date BTF auctions November 26 m BTF BTF BTF BTF BTF Short term 1 month 3 month 6 month 1 year Auction date 11/6/26 11/6/26 Settlement date 11/9/26 11/9/26 Maturity 2/8/27 1/2/27 Total issued amount 2,6 1,21 Weighted average rate 3.364% 3.692% Auction date 11/13/26 11/13/26 Settlement date 11/16/26 11/16/26 Maturity 2/8/27 4/26/27 Total issued amount 2,6 1,22 Weighted average rate 3.42% 3.12% Auction date 11/2/26 11/2/26 Settlement date 11/23/26 11/23/26 Maturity 2/22/27 1/2/27 Total issued amount 2,6 1,8 Weighted average rate 3.44% 3.662% Auction date 11/27/26 11/27/26 Settlement date 11/3/26 11/3/26 Maturity 2/22/27 11/22/27 Total issued amount 1,423 1,437 Weighted average rate 3.48% 3.682% 3
SECONDARY MARKET French government yield curve quote at end of the month, in % structure in % OAT ownership by type of holder second quarter 26 6 4 28 insurance companies credit institutions 3 4 UCITS other 2 1 yr yrs 1 years 2 years 3 years years 8 non-resident investors 1 11/2 1/26 11/26 2 8 Source: Bloomberg Source: Banque de France Breakeven inflation daily quotes in % 2.7 2. 2.3 2.1 1.9 1.7 1. 1.3 1.1 3/1/4 6/1/4 9/1/4 12/1/4 3/1/ 6/1/ 9/1/ 12/1/ 3/1/6 6/1/6 9/1/6 France 1 years (1) Euro zone 1 years (2) France 3 years (3) Euro zone 3 years (4) 12/1/6 (1) difference between the yield of the OAT 4% April 213 and the yield of the OATi 2.% July 213 (2) difference between the yield of the OAT % April 212 and the yield of the OAT i 3% July 212 (3) difference between the yield of the OAT.% April 229 and the yield of the OATi 3.4% July 229 (4) difference between the yield of the OAT.7% October 232 and the yield of the OAT i 3.1% July 232 Source: Bloomberg Negotiable government debt and swaps Negotiable government debt outstanding end end end end end end October November 2 21 22 23 24 2 26 26 616 63 717 788 833 877 882 892 OAT 419 443 478 12 2 93 66 611 BTAN 14 18 11 167 184 189 197 22 BTF 43 2 88 19 97 9 78 79 Swaps outstanding Average maturity of the negotiable debt /// 37 61 61 61 2 4 48 before swaps 6 years 6 years years years 6 years 6 years 7 years 7 years 64 days 47 days 343 days 297 days 79 days 267 days 9 days 31 days after swaps /// years years years 6 years 6 years 7 years 7 years /// 38 days 266 days 23 days 33 days 228 days 29 days 2 days 4
Turnover on the most liquid OATs and the 4 most liquid BTANs daily average () Primary dealers, monthly fixed-rate repo transactions 4 4 3 OAT BTAN 4 3 1-3 days 4-11 days 12-3 days > 3 days 3 3 2 2 2 2 1 1 1 1 11/ 12/ 1/6 2/6 3/6 4/6 /6 6/6 7/6 8/6 9/6 1/6 11/6 11/4 1/ 3/ / 7/ 9/ 11/ 1/6 3/6 /6 7/6 9/6 Source: Euroclear France Source: primary dealers Primary dealers, repo outstanding at end of month 4 4 3 3 2 2 1 1 11/4 1/ 3/ / 7/ 9/ 11/ 1/6 3/6 /6 7/6 9/6 fixed-rate repos floating-rate repos others Source: primary dealers Focus Mortgage interest rates in France remain at record lows (%) 1 9 Fixed rate housing loan Variable rate housing loan 8 7 6 4 3 199 1996 1997 1998 1999 2 21 22 23 24 2 26 Source: Banque de France
TRIBUNE French housing market Set for a soft landing After a period of rapid price increase, when house prices rose13% since the trough in 1997, 1%Y/Y in 24 and 2 on average, house prices have started decelerating. FNAIM a real estate agent that accounts for about 3% of sales in the housing market estimates that prices increased by only.1% Q/Q or 4.% Y/Y (vs. 17.% Y/Y in Q3 4) in Q3 6. Yet, the housing market appears to be holding up, as both sales turnover and mortgage credit growth continue to rise at levels in line with those observed over the past few years. Growth in sales turnover increased by about 3% in the year until October 26, ( 3.8% in October 2); mortgage credit rose 13% Y/Y in Q2 6, up from 12% Y/Y in Q2, and in Q2 6 the Q/Q growth rate reached 13.8% up from 13.7% in Q1. Since 24, cyclical and structural factors have supported the French housing market. The cyclical factors include low interest rates, supportive fiscal measures and government support to mortgage credits; most prominent structural factors are a low rate of housing ownership, demographic changes and increased fl exibility in the mortgage credit market. Mortgage rates have been low by historical standard and despite ECB hiking rates, mortgage rates remain low as the yield on the 1 yr rate remains around 4% to 4.1%. Other cyclical factors will be less supportive in the short to medium term. The fiscal measures, Loi Perissol, Loi Besson and Loi Robien I and II, have encouraged investors to buy property for renting out, but these schemes have become less and less generous so that it seems reasonable to believe that they will fade out in the short to medium term. As well, the support provided by the zero interest rate credit provided by the government for low income people, is likely to fade away as the take up reaches its maximum. The main structural factors which have supported the housing market in France are likely to persist in the medium term. The low proportion of house ownership in France compared to other European countries implies a continuing appetite for housing purchase, especially as French households view home ownership as an insurance against reduced pensions. Demographics, with population and the number of households growing fast (the number of households is increasing faster than the population growth rate at 1.24% per annum on average) provides additional demand for housing. Likewise, the mortgage market has become more flexible, with the repayment period of mortgage loans lengthening from 1. years on average in 1991 to 19.7 in September 26, the number of variable rate mortgages increasing (to about 3% of the existing stock of mortgages), and monthly repayment more often higher than 3% of the mortgagor s income. Overall, cyclical factors are becoming less supportive but demographics, low rate of ownership and scope for further mortgage market deregulation suggest that housing demand is likely to remain strong in the medium term. Market analysis Laurence Boone Barclays Capital NB: this Agence France Trésor forum offers economists an opportunity to express their personal opinion. Thus, the above article strictly reflects the author s view, and should not be construed as expressing the viewpoints of Agence France Trésor or the Ministry of the Econom y, Finance and Industry. 6
THE FRENCH ECONOMY Macro-economic forecast Recent economic indicators Real growth rate as a % 2 26 27 Industrial output*, year-on-year -.7% 9/26 Household consumption*, year-on-year 4.2% 1/26 French GDP 1.2 < 2-2. > < 2-2. > Unemployment rate (ILO) 8.8% 1/26 Euro zone GDP 1.4 2. 2. Consumer prices, year-on-year Household consumption 2.1 2.8 2.8 all items 1.1% 1/26 Business investment 3.6 3.6 3.6 all items excluding tobacco 1.1% 1/26 Trade balance, fob-fob, sa -1.3 EUR bn 9/26 Exports 3.1 7.9 6.2 " " -2.9 EUR bn 8/26 Imports 6.1 8. 6.1 Current account balance, sa -2.1 EUR bn 9/26 Consumer prices 1.8 1.8 1.8 " " -3.9 EUR bn 8/26 (year-on-year) 1-year constant maturity rate (TEC1) 3.7% 11/3/26 3-month interest rate (Euribor) 3.636% 11/3/26 EUR / USD 1.32 11/3/26 EUR / JPY 13.29 11/3/26 Source: Ministry of the Economy, Finance and Industry, Draft budget bill 27 *manufactured goods Source: Insee; Ministry of the Economy, Finance and Industry; Banque de France Gross domestic product at 2 prices Variation in % 2. 2. 1. 1... -. quarterly (left-hand scale) year on year (right-hand scale) -1. 2 21 22 23 24 2 26 4 3 2 1-1 Euro exchange rate Daily quotes 1.4 1 1.3 1 1.3 14 1.2 14 1.2 13 1.1 13 1.1 12 Euro / dollar (left-hand scale) 1. Euro / yen (right-hand scale) 12 1. 11 12/1/ 3/1/6 6/1/6 9/1/6 12/1/6 Source: Insee, quarterly national accounts Source: European Central Bank Government budget monthly position end-of-october level 24 2 24 2 26 General budget balance -4.41-4.1-48.4-48.96-41.61 revenue 242.99 249.11 197.16 199.89 182.4 expenditure 288.4 294.27 24.6 248.8 224.1 Balance of special Treasury accounts 1.3 1.68-2.7-4.63-6.6 General budget outturn -43.88-43.47 -.97-3.9-48.21 Source: Ministry of the Economy, Finance and Industry for more information: http://www.minefi.gouv.fr/themes/finances_etat/budget/index.htm Public finance: general government deficit and debt As a % of GDP 4. 4. 3. 3. 2. 2. 1. 1. 8. 3.6 8.7 2.9 8.3 2.3 6.7 6.2 2. 2.4 Source: according to Maastricht Treaty, Insee and Ministry of the Economy, Finance and Industry 4.2 8.2 62.4 3.6 64.4 3.7 66. 6 68. 2.9 64.6 2.7 63.6 1997 1998 1999 2 21 22 23 24 2 26 27 deficit (left-hand scale) debt (right-hand scale) 2. 66. 64. 62. 6. 8. 6. 4. 2.. 48. 7
Timetable for the release of French economic indicators December 26 January 27 7 Central government budget: statement at end of October Household confidence survey: December survey 7 Gross foreign exchange reserves in November 8 Gross foreign exchange reserves in December 11 Industrial output in October 1 Central government budget: statement at end of November 12 Foreign trade in October 1 Industrial output in November 13 Consumer prices: index for November 1 Foreign trade in November 14 Payroll employment: final results Q3-26 12 Cost-of-construction: index Q3-26 14 Wages: final results Q3-26 12 Consumer prices: index for December 1 Balance of payments in October 18 Balance of payments in November 22 National quarterly accounts: first results Q3-26 23 Household consumption of manufactured goods in December 22 Household consumption of manufactured goods in November 2 Industrial trends: monthly survey for January 22 Industrial trends: monthly survey for December 3 Industrial trends: quaterly survey for January 22 Industrial producer prices: November index 3 New building starts in December 27 New building starts in November 31 Household confidence survey: January survey 29 Net foreign exchange reserves in November 31 I ndustrial producer prices: December index 29 Job seekers in November 31 Job seekers in December 31 Net foreign exchange reserves in December Harmonized index of consumer prices Eurozone (Eurostat) Index for November: December 1 Index for December: January 17 INTERNATIONAL COMPARISONS Consumer price index General government debt in 2 Year-on-year % change As a % of GDP 17. 4 1. 3 12. 18.9 16.4 2 1. 1 Japan U.K. USA euro zone France 7.8 7. 66.8 67.7 63.8. 42.8-1 2. -2 1/4 4/ 1/ 4/6 1/6. U.K. France Germany Italy euro zone USA Japan Source: statistical institutes Source: Eurostat, OECD 8
FRENCH GOVERNMENT NEGOTIABLE DEBT OUTSTANDING OAT au 3 novembre 26 / fungible Treasury bonds at November 3, 26 En euros CODE ISIN Euroclear France Libellé de l'emprunt / Bond Encours / Outstanding Échéance 27 32 3 826 64 - DETTE NEGOCIABLE DE L ETAT Coefficient d'indexation / Valeur nominale/ démembré indexation coefficient face value / stripped FR774 OAT,% 2 avril 27 17 898 77 424 648 98 FR1132 I OAT i 1,6% 2 juillet 21 1 446 919 6 (1) 1,411 9 996 FR79 OAT,% 2 octobre 27 14 637 1 18 FR1216481 347 88 OAT 3% 2 octobre 21 17 4 94 46 Échéance 28 42 188 93 494 Échéance 216 42 483 FR128837 OAT 3,2% 2 avril 216 2 461 3 7 FR7632 OAT,2% 2 avril 28 24 43 932 367 923 91 FR187361 OAT % 2 octobre 216 22 22 1 279 98 FR766 OAT 8,% 2 octobre 28 17 784 161 127 4 431 4 É chéance 217 1 412 36 6 Échéance 29 63 98 26 2 FR123176 I OATi 1% 2 juillet 217 1 412 36 6 (1) 1,22 1 23 FR7673 V OAT TEC1 2 janvier 29 9 83 44 498 Échéance 219 26 21 28 39 FR71432 OAT 4% 2 avril 29 18 64 28 371 FR18911 1 683 78 OAT 4,2% 2 avril 219 17 344 16 99 FR7921 OAT 8,% 2 octobre 219 8 844 392 893 4 124 93 FR71424 I OATi 3% 2 juillet 29 1 643 86 113 (1) 1,13262 13 811 416 19 FR794 C ETAT 9,82% 31 décembre 219 12 892 466 (2) 6 692 14 FR186199 OAT 4% 2 octobre 29 19 844 137 38 62 4 Échéance 22 1 668 99 62 Échéance 21 31 162 742 97 FR19 I OAT i 2,2% 2 juillet 22 1 668 99 62 (1) 1,664 1 3 FR18663 OAT,% 2 avril 21 1 311 719 32 1 7 Échéance 221 17 711 FR1192997 OAT 3,7% 2 avril 221 17 711 719 4 FR18723 OAT,% 2 octobre 21 1 81 23 618 1 867 13 Échéance 211 44 29 43 742 Échéance 222 1 243 939 99 FR7144 OAT 8,2% 2 avril 222 1 243 939 99 92 1 FR7731 OAT 6,% 2 avril 211 19 72 44 71 847 9 Échéance 223 1 66 19 93 FR19437 I OATi 1,6% 2 juillet 211 1 92 71 7 (1) 1,794 1 3 FR718 OAT 8,% 2 avril 223 1 66 19 93 7 178 9 FR187874 OAT % 2 octobre 211 14 4 886 332 2 24 FR711 OAT 6% 2 octobre 22 8 11 928 118 3 248 Échéance 212 6 668 8 123 Échéance 228 13 72 119 FR188328 OAT % 2 avril 212 1 64 11 8 1 343 FR71226 C OAT zéro coupon 28 mars 228 13 72 119 (3) 46 232 63 FR18813 I OAT i 3% 2 juillet 212 1 974 127 28 (1) 1,1212 14 494 Échéance 229 22 671 722 424 FR18869 OAT 4,7% 2 octobre 212 19 4 122 924 867 7 FR71218 OAT,% 2 avril 229 1 88 48 2 87 7 FR778 OAT 8,% 26 décembre 212 48 697 339 CODE ISIN Euroclear France Libellé de l'emprunt / Bond Encours / Outstanding Échéance 21 4 92 233 43 FR116343 OAT 3,% 2 avril 21 18 313 893 43 7 Échéance 22 8 11 928 118 Échéance 213 1 719 792 188 Échéance 232 28 181 62 7 FR188799 I OAT i 3,1% 2 juillet 232 9 443 62 7 (1) 1,863 8 739 FR188989 OAT 4% 2 avril 213 19 137 183 879 14 9 FR18763 OAT,7% 2 octobre 232 18 738 7 478 3 FR1889 I OATi 2,% 2 juillet 213 14 98 8 63 (1) 1,7488 13 941 882 471 Échéance 23 1 614 FR11113 OAT 4% 2 octobre 213 17 96 77 679 FR176 113 8 OAT 4,7% 2 avril 23 1 614 3 279 4 Échéance 238 4 297 Échéance 214 32 14 724 224 FR137141 OAT 4% 2 octobre 238 4 297 121 9 FR161242 OAT 4% 2 avril 214 18 39 72 234 3 28 Échéance 2 11 283 FR11122 OAT 4% 2 octobre 214 14 1 971 99 81 2 FR117197 OAT 4% 2 avril 2 11 283 1 363 7 Coefficient d'indexation / indexation coefficient Valeur nom inale/ face value FR186413 I OATi 3,4% 2 juillet 229 7 17 841 966 (1) 1,12782 6 38 144 démembré / stripped (1) Encours OAT indexées = valeur nominale x coefficient d'indexation / indexed bonds outstanding = face value x indexation coefficient (2) y compris intérêts capitalisés au 31/12/2 / including coupons capitalized at 12/31/2 ; non offerte à la souscription / not open to subscription (3) valeur actualisée au 31/3/26 / actualized value at 3/31/26 ; non offerte à la souscriptio n / not open to subscription OATi : OAT indexée sur l'indice français des prix à la consommation (hors tabac) / OAT indexed on the French consumer price index (excluding tobacco) OAT i : OAT indexée sur l'indice des prix à la consommation harmonisé de la zone euro (hors tabac) / OAT indexed on the eurozone harmonized index of consumer price (excluding tobacco) TEC 1 : taux de l'échéance constante à 1 ans / yield of 1-year constant maturity Treasury Total OAT / total fungible Treasury bonds 61 781 76 481 Encours démembré /stripped outstanding 47 914 83 En % des lignes démembrables As a % of strippable bonds 9,78 % Durée de vie moyenne Average maturity 9 ans et 21 jours 9 years and 21 days 9
BTAN au 3 novembre 26 Treasury notes at November 3, 26 BTF au 3 novembre 26 Treasury bills at November 3, 26 En euros CODE ISIN Emprunt / Bond Encours / Outstanding Échéance 27 39 28 FR138498 BTAN 3,7% 12 janvier 27 12 18 FR1748999 BTAN 2,2% 12 mars 27 11 74 FR144466 BTAN 4,7% 12 juillet 27 16 76 Échéance 28 6 8 FR142779 BTAN 3,% 12 janvier 28 2 93 FR1819769 BTAN 2,7% 12 mars 28 12 87 FR176112 BTAN 3% 12 juillet 28 19 914 FR19136137 BTAN 3,% 12 septembre 28 11 839 Échéance 29 29 78 FR1689437 BTAN 3,% 12 janvier 29 14 116 FR16841887 BTAN 3,% 12 juillet 29 14 962 Coefficient d'indexation / indexation coefficient Valeur nominale / face value Échéance 21 36 91 68 4 FR17369672 BTAN 3% 12 janvier 21 16 821 FR176746 BTAN 2,% 12 juillet 21 1 141 FR18664 I BTAN i 1,2% 2 juillet 21 4 93 68 4 (1) 1,248 4 83 Échéance 211 31 718 FR183486 BTAN 3% 12 janvier 211 17 39 FR1884749 BTAN 3,% 12 juillet 211 14 323 En euros Échéance / Maturity Encours / Outstanding BTF 7 décembre 26 3 417 BTF 14 décembre 26 4 212 BTF 21 décembre 26 3 791 BTF 28 décembre 26 4 213 BTF 11 janvier 27 4 139 BTF 18 janvier 27 4 777 BTF 2 janvier 27 3 82 BTF 1 février 27 4 219 BTF 8 février 27 4 12 BTF 1 février 27 4 27 BTF 22 février 27 3 429 BTF 1 mars 27 4 22 BTF 1 mars 27 3 938 BTF 26 avril 27 4 449 BTF 1 mai 27 3 711 BTF juillet 27 4 192 BTF 2 août 27 4 137 BTF 27 septembre 27 4 22 BTF 2 octobre 27 4 476 BTF 22 novembre 27 1 437 Total BTAN / total Treasury notes 22 27 68 4 Total BTF / total Treasury bills 79 71 Durée de vie moyenne des BTAN 2 ans et 63 jours Durée de vie moyenne des BTF 118 jours Average maturity of BTANs 2 years and 63 days Average maturity of BTFs 118 days Dette négociable de l Etat au 3 novembre 26 / French government negotiable debt at November 3, 26 Encours total / total outstanding 892 379 833 881 néant / void Durée de vie moyenne 7 ans et 31 jours Average maturity 7 years and 31 days Réserve de titres de la Caisse de la dette publique au 3 novembre 26/ Securities held in reserve by Caisse de la dette publique at November 3, 26 1