25 September 2013: French State funding requirement and sources for 2014 and situation in 2013

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1. The 2014 French budget bill was adopted this morning by the Government. The total financing requirement for the State will amount to € 177 billion, out of which € 70.2 billion result from the projected deficit to be financed in 2014 and € 104.8 billion result from the redemption of the medium- and long-term debt due in 2014.

2. Financing requirement in 2014 will be financed in most part by the medium- and long-term debt issuance programme which is set at € 174 billion. Among the sources of funding, net change in BTF and change in correspondents’ deposits are expected to remain stable.

3. For 2014, the debt service is projected at € 46.7 billion.

4. The details of the funding programme for 2014 will be released in December 2013.



5. Medium- and long-term debt issuances net of buybacks for 2013 are unchanged at € 169 billion. By the end of September, the State had issued € 153.7 billion of medium- and long- term debt, i.e. 91% of the 2013 programme net of buybacks (versus 88% in 2012 at the same date).

6. The increase of the total financing requirement for the State in 2013 compared to the Initial Budget Act (Loi de finances initiale) will be financed by cash resources that have been revised upwards: increase of net change in T-bills (BTF, + € 8.1 billion from December 31, 2012) and high issuance premiums recorded due to lower interest rates (+ € 4 billion approximately).

7. The deficit to be financed in 2013 is revised to € 71.9 billion. Since the beginning of 2013, France has continued to benefit from very favorable financing conditions. The weighted average rate on medium- and long-term securities stands at 1.49% over the first nine months of the year, compared to a historical low of 1.86% in 2012, and an average of 4.15% over the period 1998-2007. Given the fact that interest rates and inflation are lower than expected in the Initial Budget Act published at end-2012, the projection of the debt service for 2013 is lowered from € 46.9 billion to € 45 billion, a decrease of € 1.9 billion.

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