FINANCIAL AND ACCOUNTING INFORMATION €500 million notes due 2025 In exchange for the assigned receivables, the On November 20, 2017, Rexel issued €500 mil lion subsidiaries receive a cash payment from the special of senior unsecured notes due 2025 which bear purpose vehicle, the amount of which represents interests at 2.125% annually. the value of the receivables minus an amount committed to guarantee their recovery, which latter The notes rank pari passu with Rexel’s senior credit amount is only reimbursed, in whole or in part, after facil ity and other senior unsecured notes. Rexel complete payment of the receivables. However, pays interest on the notes semi-annually on June 15 under certain programs, the Group also has the and December 15, starting from June 15, 2018. The option of contributing its receivables in exchange for notes mature on June 15, 2025 and are listed on the subscribing the securitization vehicle’s subordinated Luxembourg Stock Exchange. notes. These notes are redeemable in whole or in part at In view of their characteristics, notably the fact any time prior to December 15, 2020 at a redemption that the Group retains a significant part of the price equal to 100% of their principal amount, plus a late payment and credit risks, these receivables “make-whole” premium and accrued and unpaid assignment programs, with the exception of an off- interest. On or after December 15, 2020, the notes balance sheet US program described in the following are redeemable in whole or in part by paying the paragraphs, do not qual ify for derecognition redemption price set forth below: under IAS 39 requirements. Therefore, assigned receivables remain classified as assets on the REDEMPTION PRICE Group’s balance sheet on the line “Trade accounts (AS A % OF PRINCIPAL receivable” whereas the financing received is shown REDEMPTION PERIOD BEGINNING ON: AMOUNT) December 15, 2020 101.063% as financial debt. December 15, 2021 100.531% In addition to these on-balance sheets programs, 5 December 15, 2022 and after 100.000% in 2009, the Group entered into an agreement with Ester Finance Titrisation (the purchaser), a French On December 15, 2017, proceeds from this issuance subsidiary of CALYON, to sell a participating interest were used to repay its 3.250% senior notes due in eligible trade receivables of Rexel’s US subsidiaries 2022 for a total amount of €517.0 million. A loss of under a Receivables Participation Agreement €12.5 million has been recognized in the net financial (“RPA”). This agreement was amended in 2016 and expenses including the early redemption premium allows the Group to assign eligible receivables and amounted to €17.0 mi l l ion plus unamortized receive cash consideration up to a maximum amount transaction costs and fair value hedge adjustments. of US$225 million. The maturity of this program was extended to December 2019. 22.1.3 Securitization programs Rexel runs several on-going securitization programs The purchase price of the receivables is equal to the which enable it to obtain financing at a lower cost face value of the receivables sold less a discount than issuing bonds or incurring bank loans. including a credit risk premium and the funding cost. Under the RPA, the Group is liable for collecting the The specific characteristics of Rexel Group’s receivables on behalf of the purchaser and receives securitization programs vary depending on the servicing fees as remuneration of this obligation. As country. The relevant subsidiaries remain responsible part of this transaction, the Group entered into a for the col lection of receivables once assigned. Collateral and Intercreditor Agreement to secure the These receivables are assigned to special-purpose performance of its obligations under the RPA. The entities operating with no action required by the obligations of the Group under the RPA guarantee subsidiaries. The special purpose vehicles obtain the the transfer of cash collected by the Group on behalf financing required to purchase these receivables, of the purchaser, as well as the payment of expenses notably through the issuance of short-term debt and allowances due by the Group. However, these instruments such as French, US, or Canadian guarantees do not include any compensation commercial paper, which is rated by rating agencies. obligation in relation to unrecovered receivables. REXEL 2017 – REGISTRATION DOCUMENT 257