05 December 2005: Partnership for launch of secondary market in French treasury issues for retail investors

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Presentation (in French)

Euronext and Agence France Trésor, the agency charged with the administration of French public debt and treasury, are pleased to announce the creation of a secondary market in French government bonds (Obligations Assimilables du Trésor or OAT) for individual investors as of 2 January 2006. This initiative, based on partnership with primary dealers in French Treasury issues (Spécialistes en Valeurs du Trésor or SVT) and drawing on the support of financial intermediaries, will put the combined expertise of the issuer's representative, the market operator, market professionals and distribution networks at the service of individual investors, providing them with direct access to treasury bonds. It will be backed with the development of information tools appropriate to this category of investors.

Called OAT aux Particuliers, the new market will make it as simple and easy for individuals to buy and sell government bonds as it already is with shares, offering them the same security, transparency, liquidity and information that are already available to professional investors.

Priced in percentages of par excluding accrued interest, bonds will be traded electronically on a continuous basis from 9:00 a.m. to 5:25 p.m. CET. There will be a pre-opening session beginning at 7:15 a.m. and a closing call auction at 5:30 p.m.

As with shares, bond prices will be displayed continuously, showing the five best bids and asks. As soon as a trade is executed, related price and quantity information will become available in real time.

Market liquidity will be backed by primary bond dealers specialized in French treasury issues. Acting as market makers and liquidity providers, they undertake to offer narrow bid-ask spreads throughout trading and to act as counterparties for orders up to €500,000. Eight primary dealers in French treasury issues-Barclays, BNP Paribas Calyon, HSBC, Ixis CIB, Natexis-Banques Populaires, Société Générale and UBM- have already announced their participation. They will be joined by two market makers, Binck and Van der Moolen.

With the support of banks, online brokers and other distribution networks, the new market will give individual investors access to a full range of fixed-rate, inflation-indexed and zero-coupon OATs with maturities from 2 to 50 years. The intermediaries concerned have undertaken to offer clients terms in line with those available for equity trading and to circulate clear, simple explanatory literature on bond investment among individual investors.

Jean-François Théodore, Euronext's Chief Executive Officer and Chairman of the Managing Board, comments: “Euronext is delighted with the partnership set up under the aegis of Agence France Trésor and with the support of primary dealers in French government bonds to offer individual investors direct access to government bonds, a highly liquid asset class that is one of the most in favour with institutional investors. Individual investors make up an integral part of the group Euronext intends to serve with a varied offering of listed instruments backed by all the information and guarantees available from a regulated market.”

Bertrand de Mazières, Chief Executive of Agence France Trésor, notes that “with this new market, France has taken the lead to offer individuals the same liquidity and price transparency as institutional investors already enjoy.”

Obligations Assimilables du Trésor (fungible treasury bonds) or OATs have been used for loans issued by the French Republic for nearly 20 years. Backed in full by the State, they offer the best credit standing available, with AAA ratings from international agencies. Regular issues are organized by Agence France Trésor, the agency of the Ministry of Finance charged with administering public debt and liquidity, on the best available terms for cost and security in the interest of taxpayers.

For more information, go to www.aft.gouv.fr and http://oatparticuliers.euronext.com.  

About Euronext
Euronext, the first pan-European exchange, results from the September 2000 merger of equity and derivatives markets in Amsterdam, Brussels and Paris. In 2002, BVLP, the Portuguese exchange and LIFFE, the international derivatives exchange, joined Euronext. Euronext offers a range of services including the listing of financial instruments, trading in securities and derivatives, data dissemination and IT support. Euronext is the largest cash equity market in Europe, measured by value and number of trades processed through its central order book. Euronext.liffe, the derivatives business of Euronext, is the second largest derivatives market in Europe by volume and the world's second largest derivatives exchange, by value.

About Agence France Trésor
Established on 8 February 2001 as a national agency attached to the Treasury and Economic Policy Department (Direction Générale du Trésor et de la Politique Economique) of the Ministry of Finance, Agence France Trésor is charged with managing the debt and liquidity of the French state in the best interest of taxpayers and with the greatest possible security.

Press contacts
Euronext Paris: +33 1 49 27 11 33
Agence France Trésor: +33 1 40 04 15 50