CFF has amended the base prospectus for its EMTN programme to allow for the issuance of soft bullet obligations foncières, with the French issuer having only hard bullet covered bonds outstanding. Moody’s said yesterday (Tuesday) that the change will not affect the bonds’ Aaa rating.

An updated prospectus for Compagnie de Financement Foncier’s Eu125bn Euro Medium Term Note Programme, dated 15 June, includes a new provision that an extended maturity date be specified for notes issued under the programme.

“The maturity date of extendible notes may be extended automatically until the extended maturity date (as specified in the applicable final terms),” says the prospectus. “The payment of the unpaid final redemption amount may be automatically deferred and shall become due and payable on the extended maturity date, provided that the final redemption amount unpaid on the maturity date may be paid by the issuer on any interest payment date occurring thereafter up to and including the extended maturity date.

“In addition, interest payable in respect of extendible notes may differ after the initial maturity date.”

All of CFF’s outstanding covered bonds have a hard bullet structure.

Moody’s said yesterday afternoon that the amendments would not, in and of themselves and as of this time, result in a downgrade or withdrawal of its Aaa ratings on CFF’s covered bonds

“Other amendments to the EMTN base prospectus mostly relate to updates of financial information and regulatory descriptions, and do not have any credit impact on the covered bonds that Compagnie de Financement Foncier issues,” added the rating agency.

Fellow French issuer Crédit Agricole Home Loan SFH in May completed a consent solicitation exercise to convert all but one of its outstanding hard bullet covered bonds to a soft bullet structure – with the last hard bullet issue to mature in September – after buying back some Eu3bn of them in a tender offer.

As required under French law, all bondholders in the exercise were eligible for a fee of five cents, regardless of whether they voted in favour of or against the amendment, or if they abstained. It was the first such exercise in the covered bond market to offer fees to all bondholders.