French government to bailout CIF
September 3 , 2012
The French government has stepped in to rescue ailing mortgage lender Credit Immobilier de France (CIF) due to a months-long unsuccessful search for a buyer.
CIF must pay out $2.2 billion in October but has struggled to receive support from the financial markets to fund itself.
The lender does not take deposits from savers.
"To help the group CIF to respect its commitments, the state has decided to respond favorably to its request for a guarantee," the French Finance Ministry said.
"This guarantee will be put in place under the reserve of approval from the European Commission and parliament."
According to a source familiar with the matter, the rescue of mortgage guarantees its assets up to a ceiling of more than $31 billion.
CIF, with $41 billion in assets, had its credit rating cut last week by Moody’s rating agency and sought the government bailout late on Friday.