Public person formally accept the assignment of these claims

Acceptance by local communities, transfers of receivables of type "dailly" Act (codified in the monetary and financial Code) is partially questioned in on the website of the Ministry of the economy. It is confirmed for opening of collective proceedings against the assignor, the local community (assigned debtor) is, under certain conditions, the obligation to pay the assignee Bank. This accuracy, consistent with the spirit of the text, is likely to reassure credit institutions.

In addition to this observation, Bercy strikes a general recommendation that could sound the death knell of a number of local infrastructure financing. It is recommended to local authorities for not "refer to claims of acceptance they would be under article l 313 - 29 of the monetary and financial Code.

This recommendation may deter some policymakers to accept assignments of receivables, resulting in higher cost, or even to render impossible the financing of good number of local infrastructure. The position of Bercy is based on the fact that, in the event of an assignment of claims accepted by a local community, the credit institution would have vocation to be settled even in the absence of fact service. This analysis is legally correct. It remains economically incomplete. To better understand the risk induced by the position of Bercy, presented the outline of the operation of an assignment of receivables of type Dailly. The borrower (the "assignor") assigned to a credit institution (the "assignee") an obligation on a third party (the "assigned debtor") in consideration for funding by the assignee for the benefit of the transferor.

Thus, through concession, the dealer will fund some investments made his charge by bank loan repayment may be secured by an assignment of receivables Dailly. These receivables sold may include grants that the public individual has committed to pay to the dealer.

Public person formally "accept" the assignment of these claims. A direct and autonomous legal link is then created between a public person and the credit institution. As noted by the Ministry of the economy, even in the event of failure on the part of its private contractor, the public will be obliged to pay all the amounts corresponding to the claims which it has accepted the assignment to the credit institution.

Benefit from the bonus

The borrower with the assignment of receivables is accepted by a public person has, de facto, the credit quality of the latter. The quality of the borrower fades in favour of that of the assigned debtor, insofar as it is ultimately the assigned debtor who will refund the amount of the loan made by the assignor, notwithstanding the possible failure of the latter.

The "credit risk" and the banking prudential treatment of public persons enable them to enjoy conditions for borrowing less expensive than number of private individuals.

The private person will get bank financing at a lower rate if the debt resulting from subsidies that must pay the public person subject to an accepted assignment. This will reduce the cost of the investment, which also benefit the public person as well as users. It is this funding bonus which is threatened by the recommendation made to local communities by Bercy. This position is limited to acceptance of assignments of receivables of common law (article l 313 - 29 of the monetary and financial Code) and is not the acceptance of assignments of claims specifically planned for public private partnerships known as the acronym of PPP (article l 313-29-1 of the code).

In PPP, the acceptance is conditioned by the finding of the effective realization of the investment by the holder of the contract. From this point of view, this system is more protective for the public person who may be in a position to pay for a non-serviced. It would have been possible to recommend the same form of caution to local communities with regard to the acceptance of assignments of receivables that are presented outside the PPP, the law allows.

Investments in public service concessions could then more easily continue to benefit from the enhancement of financing permitted by the credit quality of local communities, while the latter are unnecessarily exposed.