Six out of seven bonds included in a Crédit Agricole Home Loan SFH consent solicitation will be converted from hard to soft bullets after approval was gained yesterday (Thursday), in the first such covered bond liability management exercise to include fees for all bondholders and not just those voting in favour.

Crédit Agricole announced the exercise on 14 March at the same time as a tender offer for the seven hard bullets, of which it ultimately bought back Eu3.061bn after selling a new Eu3.25bn two tranche soft bullet issue on 16 March.

The French bank said yesterday that the amendments to convert six of the issues in the consent solicitation exercise to soft bullets had been adopted: ISINs FR0011230598, FR0011060367, FR0011440528, FR0010989087, FR0011179852 and FR0010920900.

The meeting in respect of a Eu1.675bn 3.25% March 2017 issue (FR0010875880) was not quorate and a second meeting has been scheduled for 3 May. The quorum was 20% for the original meetings, and a two-third majority for amendments to be passed.

In previous similar covered bond liability management exercises, only those voting in favour of amendments to convert hard bullets into soft bullets have been paid fees, something the European Central Bank and some investors have criticised.

However, all bondholders in Crédit Agricole’s exercise are eligible for fees of five cents, whether they vote in favour of the amendment, against it, or abstain, because of French law. End investors meanwhile face more burdensome administrative tasks in order to vote.

A market participant suggested that these factors could have contributed to the one issue being not quorate in spite of the unusually low 20% threshold. There is no quorum for the second meeting.

Crédit Agricole is global coordinator, and solicitation agent alongside Citi, Credit Suisse and Morgan Stanley.