Press Release: State aid: Commission temporarily approves rescue aid for Banque PSA Finance

The European Commission granted temporary approval to France, under the EU state aid rules, to provide Banque PSA Finance with a EUR 1.2 bn guarantee covering its market issues. The Commission’s approval is conditional on the submission during this period of a restructuring plan for the entire PSA group. This plan must also ensure the viability of Banque PSA Finance.

The guarantee covers new bond issues by Banque PSA Finance and therefore extends to securities issued by the bank within a period of six months from the date of the decision. These securities ill constitute claims on Banque PSA Finance. The securities will mature three years after the date of issue.

The Commission felt that this guarantee was necessary in order to ensure access for Banque PSA Finance to the market and to avoid a knock-on effect on the French banking system which would have an impact on financing costs for banks. The Commission’s guidance on state aid for banks during the crisis states that the Commission may authorise rescue aid for six months in order to preserve financial stability.

Because the aid in question will benefit not only Banque PSA Finance but the entire PSA group, France will be required to present the Commission with a restructuring plan for the PSA group as a whole, on the basis of which the Commission will be able to take a final decision on the aid.