DEXIA : France Creates New Local Authority Financing Group
01/23/2013| 10:35am US/Eastern
By William Horobin
PARIS--The French government Wednesday signed off on the creation of a new bank to fill the funding gap for municipalities and hospitals left by the retreat of Franco-Belgian lender Dexia SA (DEXB.BT).
The new entity is called the Societe de Financement Local, of SFIL, and will issue around 5 billion euros ($6.66 billion) of debt a year for local authorities and hospitals, the finance ministry said.
The SFIL will be 75% owned by the French state, 20% owned by the state's financial institution Caisse des Depots, and 5% owned by La Banque Postale, the banking arm of the state-owned postal service.
"We are extremely confident that local authorities will be financed in 2013, which was the case neither in 2012 nor 2013," Chief Executive of La Banque Postale Philippe Wahl said at a press conference at the finance ministry.
SFIL's will be headed by Philippe Mills, the chief executive of France's debt issuance agency Agence France Tresor, the finance ministry said.
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