28 September 2016: French State funding for 2017 and situation in 2016

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1. This morning, the Cabinet adopted the French budget bill for 2017. The total financing requirement will stand at €192.0 billion, including €69.3 billion to cover the deficit to be financed, €121.8 billion to redeem medium-term and long-term debt maturing in 2017 and €0.9 billion for other cash requirements.

2. The financing requirement in 2017 will be met by (i) the medium- and long-term issuance programme, net of buybacks, worth €185 billion. This amount includes the issue of a green OAT to be introduced in 2017, subject to market conditions, (ii) a contribution from cash available in the Treasury’s account of €7.6 billion, (iii) other expected cash sources of €4.5 billion, (iv) these sources will be partially offset by a decrease of €5.1 billion in correspondents’ deposits.

3. The other financing resources are unchanged.

4. State debt service is expected to stand at €41.8 billion.

5. The detailed financing programme for 2017 will be released in December.


6. Since the beginning of 2016, France has continued to benefit from extremely favourable financing terms. The weighted average yield on medium- and long-term debt securities stood at 0.37% for the first three quarters of 2016, compared to a historic low of 0.63% in 2015, an average of 2.17% from 2009 to 2014 and an average of 4.15% from 1998 to 2008.

7. The deficit to be financed in 2016 has been revised downward to €69.9 billion, compared to the amount of €72.3 billion expected in the 2016 Initial Budget Act passed in December 2015.

8. Dropping interest rates resulted in large net issuance premiums on medium- and long-term securities in 2016. Consequently, other cash resources were revised upward to €17.0 billion, compared to €0.5 billion in the 2016 Initial Budget Act. These cash sources will be used to reduce the outstanding stock of BTFs in 2016, as was the case in 2015.

9. Issuance of medium- and long-term debt, net of buybacks will reach €187.0 billion. At the end of September 2016, gross issuance of medium- and long-term debt stood at €173.6 billion, or 92.8% of the 2016 programme total.

10. State debt service is expected to stand at €41.6 billion, versus the figure of €44.5 billion in the Initial Budget Act.

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