Annual report 2006 - Dexia.com

PUBLIC/PROJECT FINANCE
Long-term commitments and originations
Long-term commitments of the fully-consolidated subsidiaries
reached EUR 268.2 billion, up 14.5% year-on-year, and
up 16% at a constant exchange rate, a dynamism especially
noticeable in France, Italy, America, Germany, the United
Kingdom and Central and Eastern Europe, and the Iberian
Peninsula.
Originations (excluding Germany) amounted to EUR 55.4 billion,
i.e. a slight decrease compared to last year explained by a
methodology change (the final take objective of the structured
finance transaction instead of the total amount is taken into
account as of December 31, 2006). On a same methodology
basis, the increase of the originations would have been 3%.
In Public Finance alone, production reached the high level of
EUR 48.6 billion, with Dexia even named “Best Lead Manager
on Regional/Municipal Bonds” in 2006 according an award
given by EuroWeek online magazine.
In addition, debt management activity was again very dynamic
in 2006, with a special mention for France and Italy, where historical
levels of respectively EUR 10.6 billion and EUR 3.9 bi llion
have been reached (see dedicated paragraph on page 82).
The Corporate and Project Finance sector recorded good
progress, +7.8% to EUR 13.2 billion, relying on large-scale
deals in infrastructure/PPP and also on a very satisfying
increase of the bond portfolio. On a same methodology basis,
the increase would have been 27% compared to last year.
Dexia was lead arranger with other banks of a number of
major-league deals in 2006: the GBP 2.4 billion debt package
for the acquisition of the largest port company in the UK by a
pool of financial investors, the EUR 1.2 billion Madrid subway
rolling stock financing or the CAD 1 billion Golden Ears Bridge
project in Vancouver, which received the “North American
Deal of the Year 2006” award from Thomson Financial.
It was also a satisfying year for advisory mandates, with key
mandates successfully closed, such as the Q7 offshore wind
farm project in the Netherlands or the Elwood Energy power
plant acquisition in the USA.
As testimony to its rising profile in this sector, Dexia received
in 2006 the “Bank of the Year” award from Thomson Financial’s
Project Finance International magazine for the Europe-
Middle East-Africa area. And for the second year in a row,
Dexia reached the top ten league of banks acting as arrangers
of project finance loans ranked by Euromoney/Dealogic
(#1 for PPP/PFI’s, #4 for Europe, #6 for North America) with
7 projects receiving various sectorial/regional “Deals of the
Year” awards.
7.0%, reaching a record level of EUR 62.0 billion. The volume
of long-term originations increased by a very satisfying 13.5%
to EUR 11.7 billion.
A number of important deals were closed in 2006, among
them loans granted to the Conseil général de la Réunion, du
Nord, de la Seine-Maritime, des Alpes-Maritimes for an individual
amount above EUR 100 million, and the participation in
various city transport financing deals (Grenoble and Le Mans
street cars).
Dexia’s policy of increasing activity with clients from the
non-profit sector has been successful: business increased significantly
by 27%, and market share increased from 33% to
37%.
Several activities were particularly noticeable.
• Public Health Sector is still buoyant, and Dexia’s activity
increased by 69% year-on-year, reaching a EUR 1.7 billion
production. The “Hospital 2007” plan, which encourages
hospitals to use debt financing for modernization, is notably
supporting this sector trend. Dexia won several major bids
(Metz, Dijon and Toulon hospitals). In this particular segment,
Dexia’s market share rose significantly with Dexia holding the
lead with around one bid won out of two.
• Housing activity is also encountering a net increase: +23%,
to EUR 1.7 billion, partly by virtue of the “Borloo Plan”, which
requires the increase of annual construction of social housings
from 80,000 in 2006 to 120,000 in 2009.
Regarding Project Finance, 2006 was also a very good year,
with production doubling to EUR 1.2 billion, up 106.5%
(135% on a same methodology basis). Among the deals confirming
Dexia as a major player on the French PPP market,
Dexia co-financed the largest PPP in the country, a hospital
near Paris, underwriting one third of the EUR 345 million debt
and as financial advisor and co-arranger (as well as equity
investor in the winning consortium) successfully closed the
EUR 205 million financing of the second PPP launched by the
Ministry of Justice to design, build, and maintain three prisons.
Dexia has also won several significant advisory mandates,
for instance with the Ministry of Justice regarding the renovation
of the Prison de la Santé in Paris.
Dexia has also co-led a EUR 500 million re-financing of car
parks and underwritten EUR 350 million of the financing for
the acquisition of Autoroutes Paris-Rhin-Rhône.
MANAGEMENT REPORT
COMPTES CONSOLIDÉS
COMPTES SOCIAUX
Regionally the performances were as follows.
France
2006 was a very dynamic year, with long-term commitments
increasing by 7.3%, to EUR 65.0 billion, a remarkable growth
experienced both in public finance and in project finance.
In Public Finance, where Dexia holds a 42% market share,
the bank made the best of a favorable environment: transfer
of financial responsibilities from Central Government to local
authorities, expectation of a rate increase, and the pre-election
period. Long-term outstanding commitments were up
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