Covered Bonds : French Covered Bond Market

French Covered bond market: w ith a total Euro outstanding of €200.8 bn, the French market is the largest covered bond m arket, followed by Germany (€141.7bn) and the Nordics (€126.0 bn). French covered bonds stand out in the European landscape with the co-existence of three different types of covered bonds: Obligations Foncières, Caisse de Refinancement de l’Habitat (CRH) and Obligations de Financement de l’Habitat, even though CRH did not issue any covered bond since 2013 due to regulation. The French covered bond market consists of 18 issuers and they benefit from excellent ratings. There are one issuer of CRH, nine issuers of Obligations Foncières and eight issuers of Obligations de Financement de l’Habitat. Year to date, new French cov ered bond issuances reached €10 bn of the Euro benchmark covered bond market, representing almost 20% of the market. Since the beginning of the year, Obligations de Financement de l’Habitat are the most active with €7.25bn issued, followed by €2.7 5bn Obligations Foncières. French economy and housing market outlook: a fter a marked improvement in 2017, French growth slowed in 2018. Given the less buoyant international environment, this slowdown is mainly explained by weakening domestic demand, due to less vigorous household consumption and – to a much lesser extent – investment. The French housing market remained relatively stable in 2018 compared with the level in late 2017 . This report aims to provide at first a n outlook of the French economy and the characteristics of the French real estate market, the guaranteed home loans, review the three different covered bond systems in France (Obligations Foncières, Caisse de Refinancement de l’Habitat and Obligations de Financement de l’Habitat). Finally, we look at the relative value on French covered bond market.