Set up in 1985 to refinance mortgages issued by commercial banks, the Caisse de Refinancement de l’Habitat (CRH) has become one of the largest issuers of bonds in Europe. CRH is wholly-owned by its participating banks and is charged with the monitoring and controlling of mortgage debt servicing. Bonds placed by the Caisse enjoy significant specific legal privileges on the CRH’s secured loans to private banks.
Since the volume of outstanding mortgage-backed bonds issued by CRH precisely matches the entity’s loans (promissory notes) to commercial banks, the balance sheet duration equals zero. CRH effectively acts as a pass-through adding both resilience and efficiency to the financial system. CRH bonds comply with the Capital Directive 2 and are eligible for open-market operations of the European Central Bank.
Due to its unique nature and set-up, CRH never experienced any loss write-downs or other difficulties since its creation and proved exceptionally resilient even at the height of the most recent financial crisis. In the event of a borrowing bank’s default, CRH automatically becomes the sole owner of that bank’s mortgage portfolio.
The CFI.co judging panel agrees that mortgage refinancing mechanisms are essential to the health of the financial system. The judges are pleased to declare Caisse de Refinancement de l'Habitat winner of the 2017 Best Social Impact Finance France Award.