The terms of a negotiation agreement between Dexia, Caisse des Dépôts and La Banque Postale on the ownership of Dexia MA and the details of the sale of Dexia Bank Belgium have been finalised, Dexia announced today (Thursday), but analysts said that there has been a lack of communication on the fate of Dexia Kommunalbank Deutschland.

The agreement between Dexia, Caisse des Dépôts and La Banque Postale contains two main features, one being the acquisition by Caisse des Dépôts and La Banque Postale of respectively 65% and 5% of the shares in Dexia Municipal Agency, and a joint venture between Caisse des Dépôts and La Banque Postale dedicated to originating loans to French local authorities, refinanced through Dexia MA.

RBS covered bond analysts said the move was positive but raised several questions, such as what would happen to the remaining 30% stake of Dexia in Dexia MA and how strong was the willingness of Caisse des Dépôts and La Banque Postale to provide additional support for Dexia as new shareholders, if required.

Dexia said that under the agreement reached it will extend a guarantee to Dexia Municipal Agency against Eu10bn of structured loans to French local authorities as well as an indemnity against losses in excess of 10bp on all outstanding loans. Dexia will in turn benefit from a counter-guarantee from the French state on the portfolio of structured loans up to 70% of losses over and above Eu500m, subject to the approval of the European Commission.

“The counter-guarantee for Dexia is only on the Eu10bn structured loans to French entities rather than on the whole portfolio,” said Frank Will, head of covered bond research at RBS. “It remains therefore even more important to what extent the cover pool structure will be altered by a possible transfer of troubled loans to a run-off entity.”

Another covered bond analyst said that while the counter-guarantee was still subject to approval by the European Commission “the EU will probably not dare do anything but approve”.

A press release setting out the decisions taken by Dexia’s board of directors was silent on Dexia Kommunalbank, and RBS’s Will said the future of the Pfandbrief issuer remained unclear.

“Even in this morning’s press release, there has been no statement about what will happen to DKD,” he said. “You can see that reflected in its spreads, which have been growing wider since September before taking a couple jumps wider in October.

“People are getting nervous,” he added. “They’re concerned DKD could be spun off.”

Another covered bond analyst also noted that Dexia Kommunalbank was not mentioned in today’s press release, and said that it appears to remain a Dexia subsidiary.

Dexia Bank Belgium will be sold to the Société Fédérale de Participations et d’Investissement (SFPI), acting on behalf of the Belgian state.