Presentation to Fixed Income Investors November 2010
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Table of Contents
AFD at a Glance…...……….………….……………………………….............. p. 3 - 7 Status & Credit profile……………………………………………………………. p. 8 - 11 Financial Performance & Risk Management…..………………………. p. 12 - 16 Capital Market Activities………………………………………………………… p. 17 – 21
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AFD at a Glance
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AFD is a bilateral development finance institution
Established in 1941, AFD is the wholly state-owned bi-lateral development bank of France
AFD’s activities are aimed at :
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reducing poverty and inequalities; promoting sustainable economic growth; protecting “Global Public Goods”; promoting biodiversity, social and environmental responsibility; AFD’s mission includes the financing of infrastructure and urban development, water and sanitation, agriculture, education, health, environment and natural resources, private sector development.
AFD operates in more than 70 countries :
AFD at a Glance
AFD’s financial instruments
AFD Group deploys the widest range of financial instruments among bilateral development banks :
Loans
Other instruments :
(mostly with grant element)
Grants Direct Co-financing Local bank intermediation
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AFD at a Glance
Guarantees Equity
Examples of recent projects approved by AFD
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AFD at a Glance
09/30/10 Total commitments in foreign countries = €3 billions 09/30/10 Commitments in foreign countries Breakdown by sector of activity Health & fight against AIDS 1%
Producing sector 17%
Education 2%
09/30/10 Commitments in foreign countries Breakdown bu geographic region
Caribbean / South America 16%
Other 3%
Agriculture & food security 3%
Infrastructure & Urban development 44%
Environment & natural resources 14% Water and sanitation 11%
Asia 22%
Other 8%
AFD’s financing and expertise make a difference 2009 funding used, in part, to: • Provide drinking water for 7.3 million people • Establish primary school for 1.8 million children • Reduce carbon emissions by 4.9 million tons per year • Improve housing for 2.1 million people Page 7
Sub-Saharian Africa 34%
AFD at a Glance
Mediterranean region / Middle East 25%
Status & Credit profile
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AFD / French State : a strong link French State 100%
Agence Française de Développement (AFD) Board of Directors : - Members representing the State - Members of Parliament
Proparco Private Sector (ownership : 57%)
Other subsidiaries (Socredo, Sogefom,…)
AFD benefits from the French State backing AFD’s mission is central to the French government’s cooperation and aid policy : • AFD plays a major role in government’s plan to provide Official Development Assistance ; • AFD funds part of the French State contribution to the IMF and World Bank. Page 9
Status & Credit Profile
AFD’s dual-entity status is a core strength AFD : a Specialised Financial Institution (IFS) : • Credit institution with a permanent role serving the public interest ; • Subject to prudential banking regulation ; • AFD’s issues carry a risk weighting of 20% (Basel II).
AFD : an Industrial and Commercial Public Institution (EPIC) : • AFD falls outside the scope of private-sector bankruptcy laws ; • French State’s financial backing for AFD : French State must substitute itself for AFD if it can’t pay its debt ; • The French State has ultimate responsibility for AFD’s solvency.
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Status & Credit Profile
Credit profile is favourably noted AAA rating linked to dual-entity status and public nature of AFD’s mission : • AFD’s “senior” issues rated AAA by Fitch and S&P
AAA/Stable 12/21/2009
« Extremely strong monitoring and support by the French Government » « Prudent risk management, robust liquidity and very strong solvency »
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Status & Credit Profile
AAA/Stable 09/23/2009
« AFD will retain a clear public policy mandate and a healthy and low-risk stand-alone financial profile »
Financial Performance & Risk Management
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Key figures show AFD’s performance
AFD widely complies with the 1st pillar of Basel II 06/30/10 - IFRS - million €
TOTAL BALANCE SHEET CONSOLIDATED CAPITAL CAPITAL ADEQUACY RATIO (BASEL II) Minimum regulatory level TIER 1 RATIO (BASEL II) Minimum regulatory level
15 500 4 621 30.5%
Strong capitalisation Strong solvency
8%
19% 4%
AFD shows sound results 2008
06/30/09
2009
06/30/2010
NET BANKING INCOME OPERATING PROFIT PRE-TAX INCOME
358 169 177
188 76 78
500 254 259
177 62 65
NET INCOME
167
69
242
54
IFRS (million €)
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Financial Performance & Risk Management
Asset quality is solid Total outstanding = € 12,6 bn (06/30/10) Non sovereign 28%
French Overseas Territories 24%
Sovereign French State guaranteed 13%
Sovereign - not guarenteed 35%
Sovereign and domestic loans : a low risk portfolio OUTSTANDING
NON-PERFORMING
NOT PROVISIONED NON-PERFORMING
TYPE OF LOAN CUSTOMER Sovereign - French State guaranteed Sovereign - not guarenteed French Overseas Territories SUB-TOTAL (1)
06/30/10 (millions) 1 645 4 442 2 992 9 079
06/30/10 (millions) 0 190 17 207
06/30/10 (millions) 0 99 9 107
% Total Outstanding 0% 1.1% 0.1% 1.2%
Non sovereign loans : a provisioning policy very conservative OUTSTANDING
NON-PERFORMING
NOT PROVISIONED NON-PERFORMING
TYPE OF LOAN CUSTOMER Non sovereign SUB-TOTAL (2)
06/30/10 (millions) 3 512 3 512
06/30/10 (millions) 382 382
06/30/10 (millions) 111 111
% Total Outstanding 3.2% 3.2%
Total not provisioned – non performing = only 2% of total outstanding Page 14 Financial Performance & Risk Management
Credit risk management A rigorous and transparent process : • A portfolio mainly public : States Local authorities Public entities • Consolidated management of all on- and off-balance sheet instruments ; • Monitoring of counterparty credit risk (external and internal ratings) ; • Geographic and sector-based diversification ; • Capacity of AFD to overcome potential exogenous shocks
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Financial Performance & Risk Management
Market risk management Exchange and interest rate risk : • All issuance and loans swapped into Euros ; • Global forex position < 25 M€ ; • No speculative trading
Liquidity risk : • An investment portfolio eligible to repo • A CD issue programme (€ 1 bn)
Counterparty risk : • Minimum A1/P1 for short term investments • AAA/AA sovereign euro zone for the investment portfolio • Weekly ratings monitoring and collateral contracts
Investment portfolio of € 532 M (10/11/10) AA+ 4% AAA 32%
OAT 64%
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Financial Performance & Risk Management
Capital Markets Activities
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AFD : a fast growth AFD's disbursments (millions €)
AFD's funding
(millions €) 4800
5000
4600
4600
4600
4200
4200 3600 2700
3200 2297
1175
2700
2600
1124
500
2006 2007 2008 2009 2010 2011 2012 2013 2014
840 387
2006 2007 2008 2009 2010 2011 2012 2013 2014
forecast
forecast
An increasing role for AFD given by the French State : new mandates / new volumes / new countries an important jump in funding trend due to an increasing activity in terms of disbursments.
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Capital Markets Activities
AFD’s funding strategy Public benchmarks in Euros and US$ AFD builds liquid curve in Eur and US$ Public issues in GBP, CHF, JPY
Debt Programme
Public Markets
€10bn EMTN programme
Stand alone French CD programme
Private Placements
Arbitrage driven market Issues in CAD, HKD, JPY…
Emerging Markets
Participation in the development of emerging markets Issues in XOF (West African CFA), THB…
Short term funding
For any adjustment
€1 bn
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Capital Markets Activities
AFD has a good track record in bonds Issue date
Amount (millions)
Currency
Rate
Maturity
Type
1999
370 300
EUR EUR
3.750% 3.900%
2006 2009
Public Public
2000
150 250
GBP EUR
6.250% 5.500%
2010 2006
Public Public
2001
300
EUR
5.250%
2011
Public
2002
500 500 200 10 000 100 250 68
EUR EUR GBP JPY HKD HKD HKD
5.125% 4.750% 4.875% 1.000% 4.070% 4.200% 5.130%
2012 2012 2013 2014 2004 2005 2011
Public Public Public Private Private Private Private
2003
300 200 150 50
EUR CHF CHF USD
3.875% 2.000% 2.000% 4.360%
2013 2010 2010 2011
Public Public Public Private
2004
300 300 25 200
EUR EUR GBP HKD
3.850% 4.605% 4.930% 2.430%
2014 PERP - T1 2011 2007
Public Public Private Private
2005
500 150 50 400
EUR GBP CAD HKD
3.375% 5.000% FRN 2.900%
2015 2010 2007 2007
Public Public Private Private
2006
500
EUR
4.615%
PERP - UT2
Public
2007
8 000 5 000 50 000
JPY JPY JPY
1.805% 1.560% 1.800%
2017 2015 2015
Private Private Public
2008
20 000 1 000 1 500 170
XOF USD THB USD
5.250% 4.125% 5.510% Float
2016 2011 2011 2010
Public Public Public Private
2009
1 000 700 1 250 1 800 2 200 100 70
USD EUR USD THB THB CHF EUR
1.750% 4.000% 2.250% 4.600% 3.400% 2.800% 3.015%
2011 2019 2012 2016 2012 2018 2013
Public Public Public Public Public Private Private
2010
200 1 000 1 000 100
CHF EUR USD CHF
2.625% 3.625% 2.500% 1.875%
2025 2020 2015 2029
Public Public Public Public
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Capital Markets Activities
2010 : Remaining needs : € 0.5 / 1 bn 2011 expected funding programme : € 4.2 bn : 60 – 80 % : EUR + USD benchmarks public issues 20 – 40% : Other public issues and private placements
Market debt outstanding (09/29/2010)
EUR
2%
CHF
33%
GBP 53%
JPY USD
7%
Other (THB, HKD, XOF)
3% 2%
For more informations : Ticker Bloomberg : AGFRNC
Investor distribution : public issues in EUR and USD Issues in EUR
Issues in USD
Breakdown by investor type
Breakdown by investor type Asset managers
6% 3% 2%
Insurance
8%
2%
Central banks and Supra
13%
Pension funds
Pension funds
Banks / Private banks
Banks 34%
55%
Private banks
9%
Asset managers
68%
Others
Breakdown by geographic region Breakdown by geographic region 2% 3%
37%
Scandinavia
8%
Switzerland
Middle East / Africa / Asia
37%
Middle East / Africa
66%
Capital Markets Activities
Rest of Europe
Americas Switzerland
Germany
13%
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10%
France
8%
16%
Europe
AFD highlights The French bilateral aid agency • • • •
Established in 1941 Entirely state-owned Control by the State Fulfil the ODA government policy
AAA / AAA ratings by S&P and Fitch with stable outlook Fully regulated by the French Banking Authority • •
Strong Basel II Capital Adequacy Ratio at 30.5% Strong Tier One ratio at 19 %
20% BIS risk weighting under Basel II Conservative credit risk and provisioning policy backed by French State guarantees for non-performing sovereign loans Prudent market risk management framework Robust financial conditions
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Capital Markets Activities
Contacts Department of Finance Gilles BERGIN: +33 1 53 44 32 73 Chief Finance & Risk Officer
[email protected] Grégory CLEMENTE: +33 1 53 44 38 82 Deputy Chief Finance & Risk Officer
[email protected] Benoit LEHANNEUR: +33 1 53 44 35 69 Head of Funding, Treasury & Market Operations
[email protected] Bokar CHERIF : +33 1 53 44 39 05 Funding & Market Operations
[email protected] Lydie MENOUER : +33 1 53 44 38 81 Funding & Market Operations
[email protected] Page 23
Agence Française de Développement 5, rue Roland Barthes 75598 PARIS CEDEX 12 Internet : //www.afd.fr
Disclaimer These materials have been prepared by and are the sole responsibility of AFD (the “Company”) and have not been verified, approved or endorsed by any lead manager, bookrunner or underwriter retained by the Company. These materials are provided for information purposes only and do not constitute, or form part of, any offer or invitation to underwrite, subscribe for or otherwise acquire or dispose of, or any solicitation of any offer to underwrite, subscribe for or otherwise acquire or dispose of, any debt or other securities of the Company (“securities”) and are not intended to provide the basis for any credit or any other third party evaluation of securities. If any such offer or invitation is made, it will be done so pursuant to separate and distinct documentation in the form of a prospectus, offering circular or other equivalent document (a "prospectus") and any decision to purchase or subscribe for any securities pursuant to such offer or invitation should be made solely on the basis of such prospectus and not these materials. These materials should not be considered as a recommendation that any investor should subscribe for or purchase any securities. Any person who subsequently acquires securities must rely solely on the final prospectus published by the Company in connection with such securities, on the basis of which alone purchases of or subscription for such securities should be made. In particular, investors should pay special attention to any sections of the final prospectus describing any risk factors. The merits or suitability of any securities or any transaction described in these materials to a particular person’s situation should be independently determined by such person. Any such determination should involve, inter alia, an assessment of the legal, tax, accounting, regulatory, financial, credit and other related aspects of the securities or such transaction. These materials may contain projections and forward looking statements. Any such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the Company’s actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Any such forward-looking statements will be based on numerous assumptions regarding the Company’s present and future business strategies and the environment in which the Company will operate in the future. Further, any forward-looking statements will be based upon assumptions of future events which may not prove to be accurate. Any such forward-looking statements in these materials will speak only as at the date of these materials and the Company assumes no obligation to update or provide any additional information in relation to such forward-looking statements. These materials are confidential, are being made available to selected recipients only and are solely for the information of the such recipients. These materials and must not be reproduced, redistributed or passed on to any other person or published, in whole or in part, for any purpose without the prior written consent of the Company. This document and the information contained herein are not an offer of securities for sale in the United States and are not for publication or distribution to persons in the United States (within the meaning of Regulation S under the United States Securities Act of 1933, as amended (the Securities Act). The securities proposed to be offered by the Issuer have not been and will not be registered under the Securities Act and may not be offered or sold in the United States in reliance on exemption from, or as a transaction not subject to, the registration requirements of the Securities Act.
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