OATs (Obligations Assimilables du Trésor or fungible Treasury bonds) are borrowing instruments issued by the French governmentfor the purpose of financing France’s long-term debt. First issued 25 years ago, they are backed by the full faith of French State credit. They have a AAA bond rating and are considered to be the highest quality bonds available.
OATs are equity-linked securities issued for a period of up to 50 years. The principal of an OAT bond is always repaid in one lump sum upon its maturity date. The issuance of these securities is organized and regulated by Agency France Trésor (AFT), the department of the French Finance Ministry tasked with handling public debt and treasury management.
For individual investors, fixed-rate OATs offer a wide range of investment possibilities to achieve goals such as steady income, hedging inflation, saving for retirement or other projects and diversifying your portfolio.
A secondary market for individual investors
Individual investors can purchase OATs during regularly scheduled issuance periods. Investors also have the option to buy and sell OATs on the secondary market, (i.e. those specifically dedicated to individual investors). This market is being operated by NYSE Euronext, in partnership with the Agence France Trésor (AFT) and the Specialists in Government Securities (SVT).
Like any title or security, OATs are transferable on an exchange at any time for the market price. Individuals may participate through any market that is operated by NYSE Euronext, abides by the stock exchange regulations and meets the same standards of transparency and information. NYSE Euronext's high liquidity means individuals can always find a price at which to buy or sell OATs.
