IFRS 7 paras 42A-42D, disclosure in respect of transferred assets retained on balance sheet

Renault S.A. – Annual report – 31 December 2020

Industry: automotive

15-B. ASSIGNMENTS AND ASSETS PLEDGED AS GUARANTEES FOR MANAGEMENT OF THE LIQUIDITY RESERVE (extract)

B1 – Assignment of sales financing assets

The Sales Financing segment has undertaken several public securitization operations (in Germany, France and Italy) and several conduit financing operations (Brazil, the United Kingdom and Germany) involving loans to final customers and receivables on the dealership network. Both types of operation are conducted through special purpose vehicles. Some public operations were subscribed by RCI Banque, which makes it possible to have securities eligible as collateral for the European Central Bank.

In 2020 RCI Banque Group undertook two public securitization operations in France, associated with the rents from leases with purchase options. One was a public operation backed by lease rent receivables, totalling €950 million of Class A instruments rated AAA by DBRS and Aaa by Moody’s (of which €200 million were self-subscribed by RCI) and €41.5 million of Class B instruments rated AA(Low) by DBRS and Aa3 par Moody’s. The other was for an original amount of €474 million of Class A instruments rated AAA by DBRS and Aaa by Moody’s, entirely self-subscribed by RCI.

The receivables assigned through such operations are not derecognized, as all risks are retained by the Group. The associated liabilities correspond to securities resulting from the securitization operations, and are recognized in other debts represented by a certificate.

The difference between the receivables assigned and the amount of the associated liabilities corresponds to the higher credit necessary for these operations, and the share of securities retained by RCI Banque to form a liquidity reserve.

Securitized assets can no longer be assigned or pledged. Subscribers to debt securities only have claims on the assets assigned.