A word from Jean-Marc Saugier

In 2018 the European Central Bank maintained its key interest rate unchanged and announced it should be kept at that level at least until the summer of 2019. At the same time, the ECB gradually reduced its asset purchase program, down from €30 billion per month in the first part of the year to €15 billion from October, and ended it in December. From 2019, it will reinvest proceeds from in maturing securities to maintain favorable liquidity conditions.

In the United States, Jerome Powell, the new Chairman of the Federal Reserve, raised its key interest rates four times, thereby taking the Fed Funds’ target range to 2.25-2.50%. In the United Kingdom, the Bank of England, which in November 2017 initiated its first monetary tightening in a decade, raised its official interest rate to 0.75% in July.

The anticipated global economic slowdown and the end of the central banks’ accommodating monetary policies gradually altered the macro-economic climate that prevailed at the beginning of the year. The trade war between the United States and China, the United Kingdom’s breakaway from the European Union and the budgetary negotiations between Italy and Brussels also contributed to heightened volatility. Against this backdrop the markets reverted to risk aversion mode in the second half of the year, evidenced by a fall in equities markets[1] and widening credit spreads[2]

After peaking at 0.50% in February, the 5-year swap rate ended down 12 basis points at 0.20%.

RCI Bank and Services issued the equivalent of €2.9 billion in public bond format, making a number of successive issues. The first was a five- year floating rate issue for €750 million, the second a dual tranche issue for €1.3 billion (three-year fixed rate €750 million, seven-year floating rate €550 million), and the third an eight-year fixed rate bond for €750 million. At the same time, the company issued a five- year fixed rate CHF125 million bond, a transaction that enabled it to both diversify its investor base and fund assets in that currency.

Three private format placements, one two-year and one three-year, were also made for a total of €600 million.

On the secured funding segment, RCI Bank and Services sold a public securitization backed by auto loans in France for €722.8 million, split between €700 million of senior securities and €22.8 million of subordinated securities.

This  combination of maturities, types of coupon and issue formats is part of the strategy implemented by  the  group for a number of years to diversify its sources of funding and reach out to as many investors as possible.

In addition, the group’s entities in Brazil, South Korea, Morocco, Argentina and for the first time Columbia also tapped their domestic bond markets.


RCI Bank and Services benefits from diversified sources of funds allowing to finance its growth.