Financial Reporting - Rexel

19.1.3 | Securitization programs
The Rexel Group runs several securitization programs presented in the table below, which enable it to obtain
financing at a lower cost than issuing bonds or bank loans.
The specific characteristics of the Rexel Group’s securitization programs vary depending on the country. The
relevant subsidiaries remain responsible for the collection of receivables once assigned. These receivables
are assigned to special-purpose entities operating with no action required by the subsidiaries. The special
purpose vehicles obtain the financing required to purchase these receivables, notably through the issuance
of short-term debt instruments such as French, US, or Canadian commercial paper, which is rated by rating
agencies.
In exchange for the assigned receivables, the subsidiaries receive a cash payment from the special purpose
vehicle, the amount of which represents the value of the receivables minus an amount committed to
guarantee their recovery, which latter amount is only reimbursed, in whole or in part, after complete payment
of the receivables. However, under certain programs, the Group also has the option of contributing its
receivables in exchange for subscribing the securitization vehicle's subordinated notes.
In view of their characteristics, notably the fact that the Group retains a significant part of the late payment
and credit risks, these receivables assignment programs, with the exception of the off-balance sheet US
program such as disclosed in note 11.2, do not qualify for derecognition under IAS 39 requirements.
Therefore, assigned receivables remain classified as assets on the Group’s balance sheet on the line “Trade
accounts receivable” whereas the financing received is shown as financial debt.
Securitization programs are subject to certain covenants concerning the quality of the trade receivables
portfolio including dilution (ratio of credit notes to eligible receivables), delinquency and default criteria (aging
ratios measured respectively as overdue and doubtful receivables to eligible receivables). As of December
31, 2011, Rexel had satisfied all of these covenants.
On December 19th, 2011 Rexel entered into a new securitization program in France, the United Kingdom
and Australia to replace the previous one originally matured in February 2012. This program is for a
maximum amount of €425 million over a five-year period.
The features of Rexel’s securitization programs including the off-balance sheet programs are summarized in
the table below:
Program
2011 - Europe
and Australia
(1)
Commitment Amount of Amount
receivables drawn down
assigned as as of
of December December 31,
31, 2011 2011
(in millions of currency)
December
31, 2011
Balance as of
December
31, 2010
(in millions of euros)
Repayment
EUR 425.0 EUR 610.1 EUR 428.6 428.6 444.8 16/12/2016
United States USD 470.0 USD 579.3 USD 373.9 289.0 278.0 23/12/2014
Canada CAD 140.0 CAD 270.3 CAD 140.0 105.9 105.1 13/12/2012
2008 - Europe EUR 450.0 EUR 509.5 EUR 358.7 358.7 337.3 17/12/2013
TOTAL 1 182.2 1 165.3
Of which : - on balance sheet: 1 079.4 1 067.6
- off balance sheet (Ester program) : 102.8 97.7
(1)
Securitization program subscribed in 2011, replacing the previous program initiated in 2005
These securitization programs pay interest at variable rates plus a spread which is specific to each program.
As of December 31, 2011, the total outstanding amount authorized for these securitization programs was
€1,344.2 million, of which €1,182.2 million was utilized.
19.1.4 | Commercial paper program
In September 2010, Rexel launched a €500 million commercial paper program with fixed maturities ranging
from one to three months depending on the notes issued to diversify its investor base and minimize the cost
of financing.
As of December 31, 2011, the company had issued €104.8 million of commercial paper (€56.9 million as of
December 31, 2010).
70