CAISSE DE REFINANCEMENT DE L'HABITAT (CRH), a credit institution, plays a special role in the financing of housing in France. CRH was set up in 1985 as part of the general reform of mortgage markets decided by the French government. So CRH has received from the Minister of Finance and Economy the special agreement of the Act dated July 11,1985 (article 13). Its sole object is to refinance housing purchasers loans, granted by credit institutions which are its shareholders. Given the size of its balace sheet, CRH is today within the list of important european credit institutions. Thus CRH will be placed in early November 2014, under the direct control of the European Central Bank.
Its sole object is to refinance housing purchasers loans, granted by the credit institutions which are its shareholders, by issuing bonds governed by French law (article 13 de la loi du 11 juillet 1985) for this purpose and by acquiring promissory notes issued by its shareholders with the same interest rate and maturity than bonds issued by CRH.
Refinanced housing loans are first mortgages loans, or under certain conditions, residential guaranteed loans complying criteria defined by the law and some additional criteria defined by CRH.
The total amount of loans granted by CRH since its creation exceeds EUR 90 billion.
Its loans are matched by bond issues and secured in a specific legislative framework which regulates its operations by a pledged housing loans portfolio equal to 125 % of the amount borrowed . As a result, in the event of a borrowers' default, the provisions of the law allow CRH to acquire ownership of the loan portfolio without further formality and notwithstanding any provisions to the contrary.
Apart from the special supervisory duties of the refinancing operations of the Autorité de Contrôle Prudentiel et de Résolution (ACPR), defined by the law, CRH's audit department makes regular inspections at borrowings banks, with sample tests to confirm the soundness and proper form of the pledged loans.
As of 30 June 2016, CRH's shareholders' equity are exclusively constitued of Core Equity Tier 1 (CET1) for a total amount of EUR 565 million. CRH's shares are split up between the shareholders proportionally to the regulatory capital requirement on their outstanding borrowings. Shareholders' equity are mainly held by following groups:
|Crédit Agricole SA - Crédit Lyonnais||34.7%|
- CRH's bonds have the European Cover Bond Council label (ECBC).
- CRH's bonds are some of the largest non-government issues on the Euro market, which results in very high liquidity.
- They are accepted for the European Central Bank's open market operations.
- CRH's ratings : AAA Fitch Ratings and Aaa Moody's.
- They offer to their holders a privilege on the promissory notes representative of the loans of the CRH to the refinanced credit institutions.
- They are accepted as article 52-4 UCITS directive bonds.
- The are assigned a 10% weighting in the calculation of the capital adequacy ratio of those credit institutions holding them.