THE FRR S CREATION OF VALUE FOR THE GOVERNMENT

Since the new liability-based investment model was introduced at the beginning of 2011, the FRR has made it possible to create additional value of EUR 8.8 billion in relation to the average cost of the French Government s debt, up EUR 1.6 billion during 2016.

This EUR 8.8 billion corresponds to the difference between the increase in the FRR s assets, adjusted for contributions and disbursements, and the return on a theoretical investment of the same amount compounded each year at the average yield on French sovereign debt since 2011. The cost of French debt is adjusted upwards with a fixed premium of 0.10% to approach the total cost of debt issued by CADES.

Over the last six years, the annualised performance of the FRR s assets was 5.4% (5% in 2016) while the average annual yield on French sovereign debt (to which we add the CADES premium of 0.1%) amounted to 1.4% (0.5% in 2016).

The FRR s creation of value for the government, compared with an investment made at the cost of French debt (EUR billion)

-2

-1

0

1

2

3

4

5

6

7

8

9

2011 2012 2013 2014 2015 2016

Annual performance of the FRR s assets and weighted average cost of French debt

0%

2%

4%

6%

8%

10%

12%

Performance of the assets Average annual rate of issuance of French debt with CADES premium of 0.10%

2011 2012 2013 2014 2015 2016

0.4

2.6

10.5

1.7

5.0

1.5

8.8

1.3

3.1

0.6

5.0

0.5

Source: FRR, Agence France Trésor.

Source: FRR, Agence France Trésor.

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