France’s Axa Banque is considering turning to covered bonds as a means of funding its commercial growth in France, with several issuance formats being analysed, including issuing through Axa Bank Europe SCF, an official at the latter told The Covered Bond Report.

The information corroborates a Bloomberg report from yesterday (Thursday), although the official at Axa Bank Europe SCF said that the project is not advanced enough to allow further details about the possible issuance format to be communicated, including if Axa Bank Europe SCF would be used as the issuance vehicle.

“Axa Banque is indeed analysing covered bond issuance as a way to fund its commercial growth in France,” he said, “and several alternatives are being analysed by the bank.”

Axa Bank Europe SCF was established under France’s obligations foncières framework to finance residential mortgage lending by Axa Bank Europe, the Belgian banking entity of the Axa insurance group, in the then absence of covered bond legislation in Belgium. Axa Bank Europe’s covered bonds are backed by Belgian RMBS, a structure chosen to transfer legal title on mortgages to the SCF.

After Axa Bank Europe SCF tapped the market in April an official at the issuer said that it would concentrate on its existing French programme in spite of the introduction of Belgium’s framework (see article here).

Belgian covered bond legislation has since made its way through the country’s parliament, having been fast-tracked in the summer, and the government on Friday outlined the content of a draft of one of two royal decrees that need to be finalised before the legislative framework can be implemented. The royal decree project set an 8% cap on the proportion of a bank’s assets than can be encumbered through covered bond issuance. (See here for further coverage.)