Patrice Ract Madoux
Président de la CADES

30 billion euros amortized in 10 years

The sole mission of CADES is to amortize the French social security debt using an exclusive tax resource—the CRDS—which is expected to bring in 5.3 billion euros in 2006.
Its legal framework has been reinforced twice by the Parliament:
• via the Act of 2004 on health insurance, which calls for the voted adoption of an annual amortization budget
• via the so-called Organic Act of 2005, whereby all new debt transfers must be accompanied by additional resources, with the aim of not extending the scheduled lifetime of CADES.

As an institution, CADES allies the level of assurance that comes with its status as a public agency and an organization built along the lines of a financial institution.

Overall, the French Parliament has entrusted CADES with debt totaling EUR110.4 billion. On December 31, 2006, of the EUR107.7 billion assumed, EUR32 billion had already been amortized. CADES was founded on the notion of segregating the social security debt in the interest of greater transparency in public debt management, a key factor behind restoring financial balance to the healthcare system.

To this end, CADES has adopted exemplary governance to ensure efficient operation. Accordingly, its issues comply with the principles set forth by the Board of Directors, whose members include representatives of the Ministers of the Economy and Finance and of Social Security. Each year, the issue program is submitted to the approval of the Minister of the Economy and Finance. A supervisory board, composed of four members of parliament (including its chairman, Senator Jean-Jacques JEGOU) and representatives of various social security institutions, are also closely involved in governance and control.

In addition, the Chairman of CADES goes before the legislative commissions of social affairs and finance each year. Since its inception, three major principles have guided the board of directors with respect to all CADES issues: minimize financing costs, diversify financial instruments and maintain its reputation as an issuer of the first rank. These principles enable CADES to offer a very favorable financing rate and a spread with respect to government issues comparable to the best agencies in Europe (KfW, BEI) for euro bonds.

A strong force in other currency markets (USD, AUD, CAD), CADES offers investors privileged access to a highly respected name in French bonds.