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Moody's: Nordic Specialised Lenders Provide Model For Public Sector Financing Agencies In France and UK

January 19, 2014

The public policy mandates, robust liquidity positions and healthy risk management of Nordic specialised lenders provide a robust model for similar public sector financing agencies in France and the UK , says Moody's Investors Service in a Special Comment published today. The report, entitled "Nordic Specialised Lenders: a model for public sector financing agencies in France and the UK ", is available on . Moody's subscribers can access this report via the link provided at the end of this press release. Moody's report provides an overview of the key characteristics that underlie its view of the creditworthiness of Nordic specialised lenders. In particular, the rating agency highlights three main characteristics. Firstly, Moody's notes that the public policy mandates of Nordic specialised lenders result in portfolios of low-risk loans to a closely monitored and highly regulated sector. Secondly, their robust liquidity positions provide buffers against the risk of disruptions in capital market activities or missed loan repayments by members. Lastly, their healthy risk management provides support to their robust creditworthiness, reflecting fiscal conservatism which is linked to their public policy mandates and lack of a profit motive. In the report, Moody's also highlights how the Nordic model for specialised lenders has been adopted elsewhere in Europe . For example, 11 French local governments created the Agence France Locale in October 2013, which is tasked with borrowing funds and on-lending to its shareholder regional and local governments. Moreover, the Local Government Association in the UK voted to establish a municipal bond agency to undertake the same financing activities for its members one month later.

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Source: EMBIN (Emerging Markets Business Information News)

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