Chapter III: Debt securities

Associations governed by the law of 1st July 1901 relating to the contract of association or by articles 21 to 79 of the local civil code applicable in the departments of Bas-Rhin, Haut-Rhin and Moselle may, when they have been carrying out, exclusively or otherwise, an effective economic activity for at least two years, issue bonds under the conditions set out in this sub-section. Bonds issued by associations are entered…

Contracts for the issue of the bonds referred to in article L. 213-8 may stipulate that they are redeemable only at the issuer’s initiative or at a maturity conditional on the accumulation, since the date of issue, of surpluses exceeding the nominal amount of the issue, net of any deficits accumulated during the same period. These bonds constitute last-ranking debt instruments, issued in registered form, and are only redeemable after…

Prior to issuing bonds, the association must: 1. be registered in the Trade and Companies Register in accordance with the terms and conditions laid down by decree; 2. Provide in its articles of association for the conditions under which the persons responsible for managing, representing and committing it in relation to third parties are to be appointed, and for the constitution of a collegiate body responsible for supervising the actions…

For each bond issue, the association must provide subscribers with a notice setting out the terms of the issue and an information document. This document covers, in particular, the organisation, the amount of equity at the end of the previous financial year, the financial situation and the development of the association’s activities. The information that must appear on these documents is set by decree, and the figures are approved by…

Bonds issued by the associations referred to in Article L. 213-8 may be offered to the public. In this case, it is subject to supervision by the Autorité des marchés financiers (AMF) under the conditions set out in this code, except in the case of a public offer referred to in 1° or 2° of article L. 411-2 or article L. 411-2-1.

The interest rate stipulated in the issue contract may not be higher than the average bond market rate for the quarter preceding the issue, plus a remuneration defined by order of the Minister for the Economy, which may not exceed three points. In the case of non-trading securities referred to in Article L. 213-9, repayment of which is conditional on the generation of surpluses, this ceiling rate is itself increased…

Bonds issued by associations under the conditions provided for in this sub-section are intended to meet development and financing needs and not to distribute to their subscribers management surpluses constituted by the issuing associations. Subscriptions and transfers of bonds carried out in breach of the first paragraph are absolutely null and void.

The issue of bonds by an association entails the application of articles L. 612-1 and L. 612-3 of the French Commercial Code, regardless of the number of its employees, the amount of its turnover or resources or the total of its balance sheet. The issue also requires the association to hold a general meeting of its members at least once a year within six months of the end of the…