According to the saying, behind each difficulty hides a great opportunity. Could this also be the case with regard to French debt? Since September 8, and the loss by François Bayrou of the confidence vote of the National Assembly, the rates of the tricolor debt have risen suddenly, finding (in terms of gap with the German debt) of the levels which were there following the dissolution of the lower chamber triggered by Emmanuel Macron, on June 9, 2024. Currently, the French obligations at 10 years – the famous assimilable obligations of the treasury (OAT) 10 years – Exchange around 3.4%. A high level, since these same rates fell to 2.4% at the end of 2023.
A logical takeoff: due to political instability and fears about the possibility of leading to a budget, investors are worried. However, in this case, those who buy French debt ask to receive higher interests to lend the State, because they consider that they take a higher risk of not being reimbursed. And the situation could still deteriorate: “The key indicator is that of the difference in rate between France and Germany (the” Spread “note)”, says Alexandre Baradez, manager market analysis at IG France. Currently, this difference is around 0.7%(Germany borrows 2.7%), and if it exceeds 0.9%, “The situation could deteriorate very quickly, if the markets are worried, we could exceed 4%, or even reach 5%”anticipates the analyst.
Life insurance, PER, securities account: how to buy French debt?
A disturbing perspective for public finances – since the State would pay higher interests to finance itself -, but whose investors, including individuals, can take advantage! By purchasing French state obligations, that is to say by becoming creditors of France, it is to you that these interests will indeed be paid which already display a level of yield much higher than inflation. A boon? Yes, if we do not fear that France is lacking on its debt in the next 10 years, that is to say is unable to reimburse you … An outcome which still seems very unrealistic, as a reminder, at the height of the Greek crisis, in 2012, the bonds at 10 years had reached a rate of almost … 40%. A level of which we are still far away, and at the time, Greece had not been lacking on all of its debt.
But how do you want to take advantage of it? In France, it is impossible to directly buy an obligation issued by the State. This market is reserved for so -called investors “Institutional” (Large banks, insurers, investment funds, etc.). On the other hand, it is possible to acquire them via the products that these institutional investors market. There are thus a number of French state bonds in the euros funds of insurers, which are offered in life insurance as in retirement savings plans (PER). It is also possible to take out French debt via account units (UC) offered on these two savings products.
Another option: bet on bond ETFs, with its ordinary securities account (CTO). In this case, you will undoubtedly not invest only in tricolor obligations, but also in German, Spanish, Portuguese, Italian debt … It is enough to know to check the composition of the ETF to see on which debt it is mainly invested. A solution that also has more security, according to Alexandre Baradez: “By opting for a bond ETF of European states noted IG (for” investment grade “, that is only the highest rated countries, note), you diversify your investment in several safe countries, which is always less risky than to bet on a single obligation.”
