In their first deal since they signed an exclusive agreement to develop credit enhancement business in France, Financial Guaranty Insurance Company and AXA, a French insurance group, have agreed to insure a 400 million franc private-placement bond issue for the Communaute Urbaine de Lile, in Northern France.
Credit Local de France served as the lead manager for the triple-A rated issue. Completion of the deal was announced Dec. 15.
Proceeds of the offering will help finance the Lille subway system. The bonds mature in 20 years and repayment will be made over the remaining 15 years, following a five-year grace period.
Communaute Urbaine de Lille will pay interest on a floating-rate basis, based on the three-month Paris Interbank Offered Rate, but has the option of switching to a fixed, long-term rate at any time, depending on market conditions, according to the news release announcing the deal. The deal marks the first time New York City based-FGIC and AXA have insured a municipal bond issue in France since they signed their agreement in April 1993.
