2007 Interactive Registration Document - Renault

In early 2005 RCI Banque also securitized the dealership loans on the balance
sheet of Cogera, the French subsidiary that handles fi nancing for the Renault
and Nissan dealership network. Although such transactions are used in the U.S.
market, this one, worth €850 million, was a fi rst in Europe, where no dealership
loans had ever before been securitized with public issues of securities.
The fi rst securitization program, carried out in 2002, involved €1.6 billion of
consumer loans made by Diac, a French subsidiary of the RCI Banque group.
That transaction was redeemed in 2006 and followed up with a re-issue in
October in a portfolio of €2.4 billion that also included balloon contracts.
The customer-loan securitization program launched in Italy in 2003 has been
fully redeemed, and the issue was re-opened in July 2007 for €850 million.
An issue planned in October 2007 by the German branch for outstanding
customer loans has been restructured owing to deteriorating conditions on
the credit market. A portfolio of €1.6 billion has been transferred and fi nanced
through private placements.
MATURITY SCHEDULE FOR RCI BANQUE BONDS AT DECEMBER 31, 2007
3,500
3,000
2,500
2,000
1,500
1,000
500
0
✦ Global Reporting Initiative (GRI) Directives
RATING
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MANAGEMENT REPORT 02
RISK MANAGEMENT
Renault SA’s ratings were confi rmed in 2007 (Moody’s Baa1, S&P Fitch BBB+
outlook stable).
RCI Banque SA, the Renault group’s fi nancial arm, is rated one notch above
Renault SA by the three ratings agencies. This rating was maintained
in 2007: S&P (A2; A-since 2005), Moody’s (P2; A3 since 2004) and Fitch
(F2; A-since 2006).
COMMODITY RISK
Renault’s Purchasing Department may hedge commodity risk by means of
fi nancial instruments. Hedging is limited to purchases by the Purchasing
Department of Renault and the Renault-Nissan Purchasing Organization for
Renault projects in Europe. These hedges are linked to the physical purchasing
operations carried out to meet plant needs.
In 2007 the neutralized commodity hedging positions for certain purchases
of copper and aluminum were maintained through to expiry. In December a
hedge was put in place as part of the 2008 budget for projected consumption
of aluminum in 2008.
The Group relies on Renault Finance to execute these hedging transactions in
the markets. Renault Finance tracks the metals markets, and it marks all its
hedging instruments to market on a daily basis. As the Alliance’s dealing room,
Renault Finance has extended this trading and monitoring activity to meet the
needs of the Nissan group.
These transactions are authorized by senior management, with limits in terms of
volume, maturity, and price thresholds. They are covered in monthly reports that
detail hedge performance and the performance of hedged items. Commodity
hedge decisions are made by an ad hoc steering committee, co-chaired by
the Chief Financial Offi cer and the Executive Vice President, Purchasing, which
meets quarterly.
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Registration Document Renault 2007 75