Our investments

French local authorities

Financing key actors of public investment with a strong focus on environmental and social policies

963m€ of investments as of 31/12/2022
116 transactions – 64 local authorities

Key investment parameters
Weighted average life(1):
10.9 years
SCR spread:
79% treated as sovereign-equivalent
Weighted average rating(2):
between AA3 and A1

(1) as of investment date
(2) based on Rivage Investment’s internal credit ratings as of 12/31/2022

Since the launch of the public sector debt platform in 2015, Rivage Investment invested €963m in French local authorities.

A total of 116 trades were made, involving 104 debt instruments and 64 local authorities: 29 municipalities, 11 intermunicipal groupings (including mixed syndicates), 18 departments and 6 regions.

Out of these investments, the majority was made on the secondary market, although the proportion of primary transactions has increased dramatically in recent years.

When investing, we focus on the relative value of the investment given the type of local authority, its location and its financial situation.

Investment rationale

  • A solid institutional framework justifying an A or AA implied rating
  • Implicit guarantee from the French State (Aa2/AA)
  • Attractive pick-up vs. sovereign debt with low regulatory capital consumption
  • An essential sector: local authorities account for more than 60% of French public investment
  • Investment with strong focus on environmental and social policies:
    • Local authorities play a key role in the fight against climate change, the reduction of energy consumption, the promotion of renewable energy and the improvement of air and water quality. Their competencies include public transportation, waste management, agriculture, economic development, etc.
    • Local authorities are also major actors in terms of social policies (social action, minimum integration income, minimum income for the elderly or disabled, social assistance for children, maternal and child protection, education, vocational training, social housing, etc.) and medico-social policies (general protection of public health and of the environment, duty of health alert, etc.)
Key investment parameters
Weighted average life(1):
10.9 years
SCR spread:
79% treated as sovereign-equivalent
Weighted average rating(2):
between AA3 and A1

(1) as of investment date
(2) based on Rivage Investment’s internal credit ratings as of 12/31/2022

Examples of investments

Région Grand Est

 

Type of borrower: region
Number of inhabitants: 5,562,651 (as of 01/01/2023)

 

The Grand Est region is located in the north-eastern part of France, at the border with Belgium, Luxembourg, Germany and Switzerland. It is one of the new regions created by the 2014 territorial reform, resulting from the merger of the former Alsace, Lorraine and Champagne-Ardenne regions.

Grand Est comprises 9 departments : Ardennes, Aube, Marne, Haute-Marne, Meurthe-et-Moselle, Meuse, Moselle, Vosges and the Collectivité européenne d’Alsace (itself resulting from the merger of the former Bas-Rhin and Haut-Rhin departments).

Grand Est is the 6th largest region in metropolitan France by population (out of 13) and the 4th largest region by surface area. Its population density is in line with the metropolitan average excluding Ile-de-France (97 inhabitants per km²).

Its administrative capital is Strasbourg, the 7th largest French city and the 9th largest French urban area. Other main cities in the region include Reims, Metz, Mulhouse and Nancy.

Deal description:

Acquisition on the secondary market of Dailly receivables originated in connection with a public-private partnership (PPP) involving the construction of a technical high-school located near Metz. The assignment of the Dailly receivables has been notified and accepted by the Grand-Est region, meaning that the lenders benefit from a direct claim on the region.

Executive summary:

Initial investment: €12.2 m
Initial WAL: 8.7 years
Internal credit rating: AA3
SCR spread treatment: sovereign-equivalent

Ville de Laval

 

Type of borrower: municipality
Number of inhabitants: 49,617 (as of 01/01/2023)

 

The city of Laval is located in the west of France. Prefecture of the department of Mayenne, it has 49,617 inhabitants, which makes it the 131st French city in terms of population, the 7th in the Pays de la Loire region and the 1st in the department of Mayenne.

Laval is the main member of the Laval Agglomération intermunicipal grouping, which comprises 34 municipalities and approximately 117,000 inhabitants.

Deal description:

One bilateral loan acquired in 2018 on the secondary market and two bilateral loans originated on the primary market in 2019 and 2020.

Executive summary:

Initial investment: €9.5 m (in aggregate)
Initial WAL: 9.2 years (on average)
Internal credit rating: AA3
SCR spread treatment: sovereign-equivalent

 

Syndicat mixte Bil Ta Garbi

 

Type of borrower: mixed syndicate
Number of inhabitants serviced: 332,608 (as of 01/01/2022)

 

Bil Ta Garbi is a public establishment for local cooperation (établissement public de coopération locale) organized as a mixed syndicate (syndicat mixte), which was created in 2002.

The syndicate currently has two members (intermunicipal groupings Communauté d’agglomération du Pays Basque and Communauté de communes Béarn de Gaves), covers a territory of 211 municipalities and services approximately 333,000 inhabitants in the Pyrénées-Atlantiques department.

The syndicate is responsible for the treatment and recycling of household waste, the disposal of final waste as well as related transportation, sorting and storage operations.

Its two members remain responsible for the collection of household waste.

Deal description:

Two bilateral loans acquired in 2018 on the secondary market and one bilateral loan originated on the primary market in 2022.

Executive summary:

Initial investment: €30.9 m (in aggregate)
Initial WAL: 10.0 years (on average)
Internal credit rating: A2
SCR spread treatment: Credit Quality Step 2

 

We invest in a diversified range of public sector debt

Public sector investments