Resolution criteria

• Resolves YES if, on or before 23:59:59 on December 31, 2027 (Paris time), any of the following occurs for the sovereign “French Republic”:

  • The ISDA Credit Derivatives Determinations Committee publicly rules a sovereign Credit Event (Failure to Pay, Repudiation/Moratorium, or Restructuring). Source: ISDA DC portal and ISDA sovereign credit‑event definitions. [cdsdeterminationscommittees.org], [isda.org] (isda.org)

  • S&P Global Ratings assigns France an issuer credit rating of SD (Selective Default) or D. Definitions: S&P/Taiwan Ratings. [taiwanratings.com] (taiwanratings.com)

  • Fitch Ratings assigns France an Issuer Default Rating of RD (Restricted Default) or D. Definitions: Fitch Ratings. [your.fitchratings.com] (your.fitchratings.com)

• Resolves NO if none of the above occurs by the deadline.

• Notes/edges: Temporary administrative/payment delays cured within the contractual grace period do not count. Voluntary exchanges that are not deemed “distressed” (no S&P SD/D, no Fitch RD/D, no ISDA Restructuring) do not count. Defaults by state‑owned enterprises or sub‑sovereigns do not count.

Background

• Current sovereign ratings snapshot (official AFT summary, last updated 2025): S&P AA- (Neg), Fitch AA- (Neg), Moody’s Aa3 (Stb), among others. [aft.gouv.fr] (aft.gouv.fr)

• France’s public finances: 2024 general‑government deficit 5.8% of GDP; debt 113.0% of GDP (Maastricht). [insee.fr] (insee.fr)

Considerations

• Since 2013, euro‑area sovereign bonds (including OATs) carry collective action clauses (CACs); France formalized CACs in law. Distressed restructurings using CACs can trigger ISDA “Restructuring” and/or rating‑agency default designations even if payments continue on other series. [aft.gouv.fr], [economic-financial-committee.europa.eu] (aft.gouv.fr)

• Precedent: Greece’s 2012 restructuring was treated as an ISDA sovereign Credit Event. [isda.org] (isda.org)