Marc Nocart will become CEO of CRH next month, taking over from Henry Raymond, and he is confident that the specialist issuer will return to the covered bond market, with progress being made in overcoming regulatory hurdles that have impeded issuance since 2013.

Nocart joined Caisse de Refinancement de l’Habitat (CRH) as deputy CEO in early May, and will take over as CEO on 1 September, when Raymond steps down from that role. Raymond continues as a director at CRH.

Raymond was chairman as well as CEO of CRH until March 2015, when the role was split to meet regulatory requirements and Olivier Hassler, formerly of the World Bank and Crédit Foncier, was appointed chairman.

Nocart worked at Société Générale from 2000 to 2012, latterly holding the role of co-global head of securitisation, having previously worked as head of securitisation, Europe at Crédit Agricole. Since leaving SG, Nocart has run his own consultancy business, advising on acquisitions and structured finance.

“I’m very glad and very proud to manage such a financial institution, which has committed itself to the best lending practices and contributes to the development of residential housing in France,” Nocart told The CBR. “CRH has quite a unique business model, which is a very interesting model, and there are many challenges to be faced from a regulatory standpoint and from a business standpoint.”

CRH is a specialised credit institution that issues covered bonds to raise funding on behalf of its shareholders, which are the major French banks, from whom it receives promissory notes backed by residential mortgages, with the same interest rate and maturity as the bonds issued.

CRH’s last benchmark covered bond issue came in June 2013, and it has not issued since because of the arrival of unfavourable bank regulations. These include rules implemented under the Capital Requirements Regulation (CRR) – designed with deposit-taking and investment banks in mind – that are hindering CRH’s operations.

Nocart said that CRH and its shareholders are making changes to meet requirements that would enable the issuer to achieve an exemption from the rules regarding large exposures risks, under Article 493-3e of the CRR regulation.

“Basically, we have now removed this impediment to the business,” Nocart said.

However, Nocart said CRH is examining the latest implications for CRH of a recently released report from the European Banking Authority (EBA) on EU leverage ratio legislation – which he called “a quite irrelevant ratio for CRH” – and said discussions must still be held on this topic. However, he said he is hopeful CRH will be able to resume issuance.

“It is clearly in the interest of CRH to return to the market,” said Nocart. “Of course, CRH reflects the demand for issuance of its shareholders.

“We are now in discussions with our shareholders about their appetite to issue, and the outlook is positive. I am confident that we will get back to the covered bond market.”

As of 26 April, CRH had Eu38.389bn outstanding in euros and Sfr1.875bn (Eu1.726bn) in Swiss francs.

CRH’s shares are split between its shareholders in proportion to the regulatory capital requirement on their outstanding borrowings. As of as of 30 June, its shareholders equity was exclusively constituted of Core Equity Tier 1 (CET1) for a total amount of Eu565 million.

Crédit Mutuel held 36.7%, Crédit Agricole/Crédit Lyonnais 34.7%, Société Générale 16.0%, BNP Paribas 6.3%, and BPCE 6.3%.