Investors Presentation

In the scope of its financing missions, the Debt Agency details the institutional context of the financing mechanism of CFB and presents the advantages of such an investment.

Download the Investors Presentation (.pdf)

The finances of the French Community (Wallonia-Brussels Federation) are managed under the Special Financing Act, inscribed in the process of federalisation of the country, a law (revised in 2014) that ensures and guarantees the collection of 99% of its general revenues, uniformly distributed throughout the year, and that provides considerable decision autonomy in financing matters, as well as complete predictability in revenues.

The LSF mechanism applied to CFB could be presented as follows (on a very simplified basis):

(Revenue t) = (Revenue t-1) × (1 + GDP) × (1 + CPI)

Where "Revenue" is the institutional revenue, "GDP" the national Gross Domestic Product growth, and "CPI" the national consumer price index.

• Explicit Support Mechanism from the Belgian Federal State on its Institutional Revenues

Article 54 of the Special Finance Law specifies that in case of an insufficient payment or in the event of delay in the payment of the amounts due by the Federal State, the Communities can take out a loan guaranteed by the Federal State and interest costs are taken on by the Federal State.

Careful and Responsive Management, Investor-Oriented Management

Prudent management of the debt and treasury of the Community aims to minimize the risks inherent to financial activities by imposing organisational and administrative procedures in line with good practices in effect in other public entities, or even ahead of them.

Responsive management of finances of CFB has led to the use of effective financial instruments allowing to address new investors. For example, the Community has been an innovator in setting up its EMTN programme, allowing it to develop new horizons in financing since 2003.

In recent years, issues such as “Zero Coupon” and “Inflation Linked”, sometimes with very long maturities, appeared in the debt portfolio of CFB.

In November 2020, CFB re-entered the public benchmark market with a successful issuance of € 600 million. Following a Social Bond Framework (.pdf) published in June 2021, two Social Benchmarks were issued in June 2021, April 2022, and June 2023.

Key Credit Strengths

1. Choosing, within the fixed income asset class, a « sub-sovereign » which:

• Ensures diversification
• Produces interesting spreads vs OLOs
• Supports the development of education, culture, early childhood, health, sport, etc. in a socially responsible approach 

2. Choosing an Issuer who aims to tap benchmark sizes and private placements

3. Strong financial ratios (as of 31 December 2023):

• 85.96% debt / revenue ratio
• 1.78% debt service / revenue ratio
• 93.18% borrowed at fixed rate
• Average Life of 15.05 years