AFD - 2018 Registration document

CONSOLIDATED FINANCIAL STATEMENTS PREPARED IN ACCORDANCE WITH IFRS ACCOUNTING PRINCIPLES ADOPTED BY THE EUROPEAN UNION Notes to the consolidated financial statements

Financial instruments

Weighting

senior loans

Sub-participation Guarantees granted Standby Convertible bond Subordinated debt

100%

Participation loans Shareholder advances Individual ARIZ guarantees

125%

Total ARIZ guarantees Equity stakes

150%

Reporting thresholds for large and sovereign exposures Reporting thresholds for monitoring large exposures have been set at 23% of FPGR for all countries rated RC1 to RC3, at 15% of capital for RC4 countries, and at 8% for RC5 countries. No commitments are permitted for RC6 countries. Indicators comparing AFD’s exposure to macroeconomic aggregates of foreign countries are also monitored: P the ratio between AFD’s exposure and the GDP of the recipient country assesses AFD’s weight in the country’s economy;

P the ratio between AFD’s exposure and exports measures the foreign exchange resources available for debt repayment; P the ratio between AFD’s exposure and external public debt measures AFD’s relative share of risk within the donor community. Alert thresholds are defined according to the sovereign risk classes in the table below. Alerts are triggered when the alert threshold for capital-based exposure is exceeded or when the three macroeconomic thresholds are exceeded.

❙ Alert thresholds based on capital and macroeconomic indicators

Macroeconomic indicators

External public debt

Counterparty risk rating (sovereign risk)

Risk Capital

GDP

Exports

Tier 1 Tier 2 Tier 3 Tier 4 Tier 5 Tier 6

23% 23% 23% 15%

2.3% 2.3% 1.5% 1.5% 1.2% 0.9%

11.3% 11.3%

9.0% 9.0% 6.0% 6.0% 4.5% 3.0%

6

7.5% 7.5% 6.0% 4.5%

8% 0%

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REGISTRATION DOCUMENT 2018