The CRDS levy is CADES' principal - but not its sole - source of funding one

The CRDS levy

The CRDS levy is a broad-based tax on all earned and unearned (investment) incomes. It was specially introduced for CADES, and its receipts are allocated exclusively to CADES. This tax levy guarantees the reimbursement of the borrowings incurred by CADES.

The CRDS is withheld directly from earned and replacement income, which account for 90% of its tax base.

The CRDS levy's tax basis and collection costs are borne by CADES.

CADES' other resources: the proceeds from the sale of part of the social security system's real estate assets (pursuant to article 9 of the government order dated January, 24th 1996) 

According to the article, the real estate assets privately owned by the National Social Security funds and ACOSS (the Social Security Bodies' Central Agency) have been used to generate income from rents. On the owners' initiative, all these assets, except for the premises allocated to administrate functions, will be sold and the proceeds of this sale will be allocated to CADES.

All the assets that will not have been sold by December, 31st 1999, and the rights and obligations attached to them, will be transferred to CADES, which will be entitled to call on any authorized unit or body to manage and to sell the said assets. All real estate assets must be completely sold by December, 31st 2008 at the latest. At December 31st, 2003, 467.2 million euros had been generated through sales operations.

According to the Order dated December, 27th 1999, published in the Official Journal on December, 30th 1999, the rented private building stock belonging to the Caisse Nationale d’Assurance Vieillesse des Travailleurs Salariés (CNAVTS) has been transferred to CADES. The Board of directors has a mandate to sell this property as quickly as possible and at the best financial conditions. This has been completed by year end 2003.

The issuance process is based on three sacrosanct principles laid down by the Board of Directors

Minimizing financing costs

This explains why market financing have priority over other sources of funds. CADES' good debt issues rating allows it to raise funds on capital markets at the most attractive interest rates.

The use of a wide range of capital market instruments

CADES uses a very wide range of financial instruments, including commercial paper, Euro and US commercial paper, syndicated loans, bond issues, MTN programmes, etc. The great variety of products, maturities and currencies used maximises the flexibility of CADES' issues.

This flexibility enables CADES to adapt it self to investors' requirements and to avoid causing any disturbance on the markets.

Furthermore, the government decree dated January, 24th 1996 pertaining to CADES authorizes it to enter into futures and foreign exchange transactions, to sign swap or options contracts, and to make use of agreements to repurchase government securities or its own issues as part of a strategy for hedging against foreign exchange or interest rate risks.

CADES has one of the best sovereign credit ratings

CADES aims to make benchmark issues featuring the same degree of liquidity as that of top rated issues.