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Diversify our sources of refinancing to serve our customers

RCI Bank and Services supports the Alliance brands by providing financing solutions and services to their retail, corporate and dealership customers. It is to lend money to these customers, as part of their automotive financing business that we need resources. To that end, RCI Bank and Services uses four main funding sources: bond issues, its savings bank business, securitizations and bank loans.

RCI Bank and Services has diversified its sources of refinancing to support its growth and reduce its dependence on a single source of liquidity market dependence. Thanks to this diversification, we are able to offer competitive offers and rates of car financing, securely, to all Alliance brands customers.

 

An overview of RCI Bank and Services’ four principal funding sources

Bond issues: This refinancing transaction consists in creating a bond, i.e. a debt, and selling it to investors. RCI Bank and Services sets a target amount, duration and price and appoints banks to find investors to buy the bond. We receive the funds on the day the bond is settled. During the life span of the bond, we pay interest to the investors. On maturity, we reimburse the borrowed capital.

Savings deposits: The deposits collection business, launched by RCI Bank and Services in 2012, is present in five countries, France, Germany, the UK, Austria and Brazil. It serves to diversify the sources for refinancing group business and is aimed at supporting the sales and financial growth of the Alliance brands.

Securitization: Securitization is another funding tool. As part of a securitization, RCI Bank and Services sells receivables (loans granted to Alliance brand customers or dealers) to a special purpose vehicle (SPV). The SPV refinances itself via investors by issuing bonds whose reimbursement is guaranteed by the cash flows of the receivables sold.

Bank loans: RCI Bank and Services also borrows from other banks that have excess liquidity.

 

To find out more about our financial policy for 2018, read the “6 Pages” document on our website here.