OREANDA-NEWS. Fitch Ratings says in a new report that non-financial public sector entities (PSEs) and regional governments (LRGs) account for a small share of titres negociable a court terme (TNCT), a combination of formerly certificats de depot (CD) and billets de tresorerie (BT). At end-June 2016 they represented 4.9% and 0.7%, respectively, of the outstanding short-term TNCT issuance. TNCTs are mostly issued by financial entities, including some financial PSEs and corporates.

The non-financial PSE short-term issuance market is highly concentrated, with Agence Centrale des Organismes de Securite Sociale (BT and euro commercial paper programmes: F1+), representing 89.3% of issuance at end-2015. Together with Unedic (AA/Stable/F1+) and Regie Autonome des Transports Parisiens (AA/Stable/F1+), they accounted for 98.7% of total issuance at the same date.

The report also shows an increased usage by LRGs of TNCTs and former BTs. LRGs issued EUR13bn in 2015, up 34.1% on 2014 (EUR9.7bn). Excluding three recently merged regions, especially Nord-Pas-de-Calais-Picardy (A+/Negative/F1), which did not issue in the months following the merger,, 1H16 metrics show a 34% yoy increase in LRG's short-term notes.

Access to the TNCT market enables LRGs to diversify their funding sources and reduce their funding costs. However, TNCTs should not entirely replace other sources of short-term funding as they require sufficient back-up by available short-term funding.