Recognition of the super-subordinated debt issued by the AFL as additional Tier 1 capital

Press Release
08 December 2025

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Recognition of the super-subordinated debt issued by the AFL as additional Tier 1 capital

AFL, the bank for local governments, is waiving the benefit of the exemption from the application of prudential requirements on an individual basis as of 31 December 2025, thereby recognising its deeply subordinated debt as Additional Tier 1 (AT1) capital.

Eligibility of Additional Tier 1 debt for the Prudential Capital Base of the AFL

Agence France Locale (‘AFL’) has notified the French Prudential Supervision and Resolution Authority (‘ACPR’) that it is waiving the benefit of the exemption from the application of prudential requirements on an individual basis provided for in Regulation (EU) No 575/2013 2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and amending Regulation (EU) No 648/2012, as amended (‘CRR’) and therefore no longer benefit from Article 7(1) of the CRR (the ‘Derogation’), with effect from 31 December 2025. To date, AFL has been subject to consolidated prudential supervision at the level of its parent company, Agence France Locale - Société Territoriale (‘AFL-ST’) only. On 4 December 2025, the ACPR notified AFL that it had taken note of this waiver of the Exemption with effect from 31 December 2025.

Consequently, the perpetual fixed rate resettable deeply subordinated notes issued by AFL on 17 December 2024 (the ‘Notes’) will be recognised for regulatory purposes as Additional Tier 1 Capital within the meaning of Article 51 of CRR (Additional Tier 1 Capital or ‘AT1’) of AFL and the AFL Group as of the end date of the Derogation, i.e. 31 December 2025 (the ‘Recognition Date’), as CRR requires the ACPR's recognition of AT1 debt to be subject to direct supervision by the ACPR.