Managing the social debt

Funding strategy

CADES’ funding strategy must be capable of ensuring continuous access to liquid funds at the lowest possible cost. Most funds are obtained by issuing debt securities on financial markets. The funding strategy thus depends heavily on the quality of CADES’ credit and on the optimal diversification of funding sources.

Since its inception in April 1996, this strategy and the debt issuance principles set forth by the Board of Directors have placed CADES’ debt among the world’s most highly rated. The expansion of the agency’s mission has further strengthened its position as a benchmark bond issuer.

Following the August 2020 acts, CADES implemented a social bond format based on four main principles, in accordance with the International Capital Market Association's Social Bond Principles: allocation of bond proceeds to social spending, evaluation of the corresponding spending, transparent management of bond proceeds allocation and publication of an annual report.


Credit worthiness

CADES’ objective is to issue benchmark debt securities that offer the same liquidity as the most highly rated issues.

As an issuer of debt on global financial markets, CADES must regularly update its reference documents and prospectuses, which are readily available to investors, most notably on the website of the AMF, the French financial markets authority. These documents describe CADES in detail and present recent developments.

Press releases are also systematically issued to rapidly and widely communicate all important events and significant transactions.

Many direct contacts are also established with major investors, and central banks in particular, to promote the quality of CADES’ credit and encourage them to purchase CADES’ debt securities, in an environment of intense competition from other sovereign and quasi-sovereign issuers.

Lastly, over the past 20 years CADES has strengthened its credibility in financial markets by faultlessly honouring its obligations, reacting swiftly to new developments and deploying an innovative range of market instruments to expand its investor base.


A broad spectrum of market instruments

CADES has a wide variety of financial instruments at its disposal. The range of long-term bond financing instruments, maturities and currencies employed ensures considerable flexibility that enables CADES to adapt to investor requirements without disrupting financial markets. CADES is also a major player in global short-term funding markets.

This diversity of funding sources also helps ensure access to liquidity and strengthens credit worthiness.

In addition to these main sources of market financing, CADES has access to banking facilities that enable it to easily adjust its cash position and respond to an eventual payment incident. These lines of credit also make it possible to defer debt issuance if conditions in financial markets are unsatisfactory.

Lastly, the Decree of 24 April 1996 also authorizes CADES to engage in transactions in futures and currency markets, interest rate swaps, options and repurchase agreements involving government securities or its own securities, in order to hedge currency and interest rate risks. These financial instruments make it possible to manage the debt structure and market conditions in accordance with the funding strategy.

Thus debt issuance systematically ensures that the reputation and credit quality of CADES are protected, by seeing to it that investor requirements are met with impeccable execution, optimum visibility and high liquidity.


The debt redemption process :

CADES   -   139 rue de Bercy   -   75012 PARIS