Non-marketable debt instruments backed by eligible credit claims
The Eurosystem accepts non-marketable debt instruments backed by eligible credit claims (DECC) as collateral for its refinancing operations.
Main features of DECCs
DECCs are securities whose coupon structure must meet the Eurosystem’s eligibility criteria. They have two main features :
They are backed by a pool of credit claims:
- The value of the portfolio of underlying credit claims must always exceed the outstanding amount of DECCs.
- Each individual credit claim must meet the Eurosystem’s eligibility criteria.
- A haircut is applied to each credit claim, corresponding to the rate that would be applied if the claim were submitted individually to the Banque de France.
- The quality of each claim is assessed using one of the four credit assessment sources recognised by the Eurosystem (the Banque de France’s ICAS – FIBEN – and the bank internal rating systems already validated by the Eurosystem.
- The credit claim portfolio must be homogeneous (i.e. non-financial corporate claims cannot be grouped with public sector claims) and reporting should be on a loan-by-loan basis via the Eurosystem portal.
Holders of DECCs have dual recourse, both to the originator of the claim and to the pool of claims.
Eurosystem eligibility of Euro Secured Notes
Only DECCs issued by a vehicle that has been approved by the Eurosystem are eligible as collateral for Eurosystem refinancing operations. France’s Euro Secured Notes Issuer (ESNI) has received Eurosystem approval.
Securities issued by ESNI can therefore be used as DECCs with the Banque de France, provided they meet the eligibility criteria for this asset class (as defined in Decision by the Governor No. 2015-03 amending Decision No. 2015-01).