Credit Agricole Assurances, the insurance unit of France’s largest bank by branches, said it invested about 10 billion euros ($13.3 billion) in French corporate and municipal debt last year.
Credit Agricole Assurances in 2012 invested 1.7 billion euros in private bond placements from unrated mid-size firms including Bonduelle SCA and dairy company Groupe Lactalis, Jerome Grivet, chief executive officer of the division, said in an interview in Paris today. The firm also purchased about 1 billion euros in French municipal bonds and securitized loans originally funded by Credit Agricole SA’s regional banks, which keep about 20 percent of the municipal lending risks, he said.
“Often we are the one investor that makes a deal possible” for mid-size companies, Grivet said. Credit Agricole Assurances is France’s second-largest life insurer.
While stricter capital and liquidity rules push French and European banks to keep fewer loans on their books, insurance firms are using their balance sheets to invest in debt of medium-size companies that have limited funding options.
Credit Agricole Assurances, targeting debt from cities with more than 10,000 inhabitants, may fund as much as 1.9 billion euros of French municipal debt, Grivet said.
French local governments rushed for funding last year as most of Dexia SA, previously the country’s largest municipal lender, is being wound down after receiving a second capital injection from France and Belgium. To fill French municipal lending needs left by Dexia’s demise, La Banque Postale, the banking arm of France’s postal service, and Paris-based Caisse des Depots et Consignations are setting up a new French municipal lender.
Credit Agricole’s life-insurance assets were 221.8 billion euros at the end of September, 2.5 percent higher compared with a year earlier, according to the bank’s website. About 80 percent of the assets were invested in interest-rate products.