Amortising French social debt

In 1996, the French government set up the Caisse d’Amortissement de la Dette Sociale (CADES) with an aim to amortise French social debt by issuing debt securities on international financial markets in a diverse range of currencies.

Supervised jointly by the Minister of the Economy, Finance and the Recovery and by the Minister for Solidarity and Health, CADES operates under the control of the French Parliament and the Constitutional Council. 

CADES is well integrated into the French social system, having strong joint governance, co-chaired by a Board of Directors and a Supervisory Committee, which includes four members of the French Parliament. Backed by the French Parliament, CADES is one of the most significant institutions involved in the control and reduction of French social debt by using efficient and proven amortization and financing mechanisms.

CADES’ Social Bond Framework, published in 2020 and verified by Second Party Opinion (SPO) provider vigeo eiris, states that Social Bonds proceeds will go towards the financing or refinancing of four ‘branches’ of the French social security system: ‘Illness’, ‘Workplace injury’, ‘Elderly’, and ‘Family’.

CADES attracts large number of ESG investors with 9th Social Bond

Looking to issue a 5-year EUR Social Bond as part of its €40 billion issuance programme for 2022, CADES asked NatWest to support the transaction in the role of Joint Bookrunner. 

Given a relatively clear issuance window, CADES announced the mandate of a new short 5-year benchmark to the market, with investors rushing to place orders, resulting in an order volume of over €8.25 billion at the first update. After price revision, the strong momentum continued, and the final order book stood at over €16.25 billion. CADES opted for a size of €5 billion for the transaction, with the annual coupon set at 2.875%. 

150 investors supported CADES’ ninth social issuance in 2022, with 49.5% of the final amount allocated to ESG investors. Domestic investors received 30.8% of the allocation, followed by investors in the UK (16.8%), and Asia Pacific (19.7%), while investors in Germany took 9%, in Benelux 5.7%, and investors in the rest of the Eurozone 10.7%.  Looking at investor type, banks led demand and took 37.8% of the issuance, followed by fund managers, insurance companies and pension funds with 34.5%, central banks and other official institutions taking 25.5%, and other investors 2.2%.

NatWest committed to actively contribute to social, economic and environmental progress

Damien Carde, Head of Frequent Borrower Group DCM, NatWest, commented: “We’re delighted that CADES has yet again achieved a very strong outcome, and we’re proud to have worked again with CADES after lead managing two US Dollar transactions for our customer in 2021 as well as their $3.5 billion syndication in May this year. This transaction also demonstrates our commitment to actively contribute to social, economic and environmental progress in Europe by supporting customers such as CADES.”


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