Research: Rating Action: Moody’s affirms Bouygues’ A3 rating; stable outlook

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Finally, as regards the conditions of a quasi‑contract or promissory estoppel, the study notes that the promise in question must be clear and unambiguous, which does not apply in this case . 186That conclusion is not called in question by the judgment in Air France v Commission, paragraph 159 above, paragraphs 74 and 79. That judgment instead confirms that, in the light of FT’s situation in July 2002, a private investor would not have made declarations such as those made by the French authorities from July 2002, which were stock trading vs forex trading likely to place his credibility and reputation on the line, without having, at the very least, first carried out an audit of FT (recital 228 et seq. of the contested decision). At the time of the declaration of 12 July 2002, the French authorities did not know the true extent of FT’s financial difficulties. However, the Commission acknowledges that, in Air France v Commission, paragraph 159 above, the Court did not take a view on whether the prudent investor criterion applies only to a legally irrevocable commitment.

• 209In its reply to the Court’s written questions, the Commission refers, in essence, to the considerations set out in recitals 188 and 214 to 216 of the contested decision and to the legal and economic studies which it had received or commissioned and analysed during the administrative procedure, the majority of which concluded that the declarations from July 2002 were binding.
• However, such a partial annulment is liable to bring about a distinct change in the legal position of the Bouygues companies.
• Instead of adopting a particularly rigorous and restrictive interpretation on a very controversial point of national law, it opted for an overall approach which takes account of the material and economic link between the declarations from July 2002 and the shareholder loan and of the fact that the grant of that loan involved such a commitment.
• Inasmuch as they clearly had an effect on the markets and conferred an advantage on , the declarations by the Minister for Economic Affairs … may be characterised as aid.

146FT submits, finally, that the Commission also made a manifest error of assessment in considering that the conditions of the prudent private investor criterion were not satisfied in this case . An objective examination of the French State’s action throughout the whole of the relevant period should have led the Commission to the opposite conclusion. That could be true of the position of the Bouygues companies in relation to that of FT on the French market for mobile telephony.

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297It is apparent from the case‑law cited in paragraph 214 above that, pursuant to Article 87 EC, the advantage in question must derive from public resources. That requirement of a connection between the advantage identified and the transfer of State resources presupposes that the advantage in question corresponds to an equivalent charge included in the State budget . However, that does not apply in this case as regards the relationship between the advantage found in the contested decision, which results from the declarations from July 2002, on the one hand, and the alleged transfer of public resources consisting in the opening of a EUR 9 billion credit line, as envisaged in the announcement on 4 December 2002 of the shareholder loan proposal, on the other. 246It seems inconceivable that the shareholder loan proposal which was the subject‑matter of the contract signed, initialled and dispatched by ERAP to FT could, along the lines of its announcement on 4 December 2002, have had an identical or, at the very least, similar impact on those markets. As the French Republic itself submitted at the hearing in reply to a question put by the Court, formal note of which was taken in the minutes of the hearing, the dispatch of the shareholder loan contract by ERAP to FT on 20 December 2002 was not made public separately and in addition to the announcement, made on 4 December 2002, of the shareholder loan proposal.

• 121Secondly, as regards FT’s legal interest in bringing proceedings against Article 1 of the contested decision, it must be held, first of all, that that article is also intended to produce binding legal effects vis‑à‑vis FT in so far as it is the sole beneficiary of the aid measure which is declared in that article to be incompatible with the common market.
• 35Secondly, the Commission found, in essence, that, on the date of the declaration of 12 July 2002, any further downgrade of the rating of FT’s debt would have led to the loss of its investment-grade rating and that the rating agencies S & P and Moody’s were about to downgrade that rating to junk-bond level .
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• 123Moreover, the Commission cannot reasonably contend that FT has no interest in the outcome of this case on the ground that its legal position would remain unchanged even if its action were well founded.

On the one hand, as was recalled in paragraph 292 above, the Commission failed to characterise, to the required legal standard, such an advantage in the contested decision. On the other hand, that advantage is separate from that deriving from the declarations from July 2002, as found in that decision (see paragraph 243 et seq. above), without prejudice to the question whether the latter advantage consists in the improvement of the terms of FT’s refinancing and/or in any increase in its share and bond prices. 262It is apparent from the considerations set out in paragraphs 214 and 215 above that the advantage identified in paragraphs 234 to 259 above must derive from a transfer of State resources. 247In reply to a question put by the Court, the Commission nevertheless maintained at the hearing that it had always considered that the shareholder loan proposal as such and its provision involved an additional and separate advantage for FT , inasmuch as the latter obtained, following the dispatch of the contract signed by ERAP on 20 December 2002, the unilateral and unconditional option of activating the shareholder loan by signing that contract.

136In Case T‑450/04, the Bouygues companies put forward, in support of their application for annulment of Article 1 of the contested decision, a first plea, alleging infringement of Article 87 EC in that the Commission refused to characterise the declarations from July 2002, considered in isolation or together, as State aid, and a second plea, alleging inconsistency and a failure to state adequate reasons, contrary to Article 253 EC. 121Secondly, as regards FT’s legal interest in bringing proceedings against Article 1 of the contested decision, it must be held, first of all, that that article is also intended to produce binding legal effects vis‑à‑vis FT in so far as it is the sole beneficiary of the aid measure which is declared in that article to be incompatible with the common market. 101As regards the action brought by the Bouygues companies, the Commission submits that, in their first plea for annulment, those applicants agree with the reasoning set out, in particular, as far as recital 219 of the contested decision. In reality, they are not contesting that decision in so far as it characterises the notified measures as incompatible aid, since that characterisation is in their interest and meets their wishes.

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Indeed, prematurely specifying the concrete form of any measures of support could have run the risk of pointlessly restricting the refinancing options which might subsequently become available for FT’s debt while creating the need to notify such measures to the Commission under Article 88 EC. Moreover, because of its precipitate character, such an approach would have been liable to undermine the confidence of creditors and investors in the reliability of the French State’s action. In those circumstances, contrary to what is stated in recital 212 of the contested decision, the fact of having contacted the rating agencies could not be construed as a factor supporting the firm character of the alleged commitment given by the French State, but only as a first step intended to relieve the pressure to which FT’s position on the financial markets was subject in July 2002. 211The Commission reiterates its approach with regard to the application of the private investor criterion and its analysis of the perception by the financial markets of the declarations from July 2002, which were part of a strategy of commitment and rescue for FT. In those circumstances, the Commission preferred not to adopt an interpretation which was particularly strict and restrictive for the French State and for FT on a very controversial point of national law.

The Commission was therefore justified in finding that, in this case, all of the constituent elements of the concept of aid were present only from December 2002 onwards. 200The Commission takes issue with the Bouygues companies’ static and ‘photographic’ approach to the operation to rescue FT, which seeks to limit the examination under Article 87 EC to the declarations from July 2002, while, in Case T‑425/04, the French Republic wishes to limit that examination to the notified measures of December 2002. In the Commission’s view, the argument that those declarations satisfy, either individually or as a whole, the four conditions of the concept of aid depends on a narrow, partial and incorrect reading of the contested decision and does not take account of the fact that the events which preceded the shareholder loan of December 2002, as part of a continuing rescue process, are interconnected from both a material and an economic point of view. 193According to the Commission, the fact that the French State characterised its behaviour as prudent does not call in question the unconditional character of its commitment.

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As is apparent from recitals 38 and 212 of the contested decision, on the very day of the declaration of 12 July 2002, the French authorities contacted the rating agencies, such as S & P , to inform them of their intentions in order to reassure the market rapidly and prevent any subsequent downgrading of FT’s rating to that of a junk bond. This aspect is not disputed by the French Republic and FT, since they have merely submitted that that approach is in keeping with the prudent private investor criterion. 190The Commission disputes that the declaration of 12 July 2002 did not involve a State commitment as regards possible financial support for FT and that it based its assessment on a purely subjective impression of the way in which that declaration could, in its view, have been perceived by the markets. On the contrary, it based its assessment on objective facts demonstrating that, from the point of view of the market, that declaration had created the impression of a binding commitment and a future intervention by the French State. Thus, the declarations from July 2002 were intended to reassure the markets and the French authorities contacted the rating agencies in order to prevent the rating of FT’s bonds being downgraded to that of a junk bond.

If so, thirdly, it must be examined whether those possible advantages deriving from State resources were granted in compliance with the criterion of the prudent private investor in a market economy. 216The case‑law has further clarified the concept of State aid in the light of the principle that the public and private sectors are to be treated equally as meaning that the intervention of public authorities in the capital of an undertaking, that is to say, a financial contribution from public resources, nevertheless does not constitute State aid within the meaning of Article 87 EC where that intervention takes place in circumstances which correspond to normal market conditions. In that regard, it is necessary to determine whether, in similar circumstances, a private investor of a dimension comparable to that of the bodies managing the public sector could have been prevailed upon to make capital contributions of the same size, having regard in particular to the information available and foreseeable developments at the date of those contributions .

70By application lodged at the Court Registry on 5 November 2004, FT brought the action registered under number T‑444/04. By letter of 3 May 2004, the Commission forwarded those two reports to the French authorities, inviting them to submit their comments. 2On 31 December 2001, FT posted a net debt of EUR 63.5 billion and a loss of EUR 8.3 billion in its published accounts for 2001. Ed Post is the flagship platform of brightbeam, a network of education activists and influencers demanding a better education and a brighter future for every child. Your donation will support the work we do atbrightbeam to shine a light on the voices who challenge decision makers to provide the learning opportunities all children need to thrive. Screen for heightened risk individual and entities globally to help uncover hidden risks in business relationships and human networks.

• They are contesting it only in so far as the Commission did not find that, taken as a whole or separately, the declarations from July 2002 constitute State aid.
• That judgment instead confirms that, in the light of FT’s situation in July 2002, a private investor would not have made declarations such as those made by the French authorities from July 2002, which were likely to place his credibility and reputation on the line, without having, at the very least, first carried out an audit of FT (recital 228 et seq. of the contested decision).
• In recitals 189 and 219 of that decision, the Commission nevertheless stated that it did not have ‘sufficient evidence … to establish irrefutably the existence of aid on the basis of this innovative argument’.
• In so doing, both in the contested decision and during the proceedings, the Commission did not clearly and definitively adopt a position on the question whether the declarations from July 2002 were inherently capable of involving a transfer of State resources, where appropriate, depending on the circumstances, under the relevant national law.

109The Bouygues companies submit that their application for annulment of Article 1 of the contested decision is admissible in so far as that article, read in conjunction with the reasoning forming its essential basis, implicitly but necessarily includes the Commission’s legally binding refusal to accept the Bouygues companies’ argument that the declarations from July 2002 in themselves constituted State aid. 104The Commission, supported by the French Republic, adds that, although it does not dispute the legal interest of the Bouygues companies in bringing an action for annulment of Article 2 of the contested decision, it nevertheless takes the view that their position is contradictory. If the Bouygues companies’ application for annulment of Article fundamental analysis vs technical analysis 1 of the contested decision were deemed to be well founded, the Court could not rule on their application for annulment of Article 2 of that decision. In such a case, the shareholder loan would no longer be the aid referred to in Article 1 to be taken into account for the purpose of applying Article 2 of the contested decision. That contradiction merely reinforces the Commission’s argument that it is not open to the Bouygues companies to challenge Article 1 of that decision. 58Such declarations are, in the Commission’s view, entirely likely to be considered credible by the market and as a result create an expectation on the part of the latter that the State ‘will do everything necessary to resolve any financial difficulties that may face’.

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The ratings have been disclosed to the rated entity or its designated agent and issued with no amendment resulting from that disclosure. Working across the infrastructure and Welsh markets of our Supply Chain Sustainability School to inspire companies to do more to reduce their sustainability impacts. As an organisation with a clearly defined sustainability strategy and key performance indicators, Bouygues has implemented and rolled out the Tool autonomously across their sites and contracts, placing sustainability at the forefront of their workforce’s priorities.

In November 2021 Bouygues announced its acquisition of 100% of Equans, a global multi-technical services provider, from ENGIE SA for an enterprise value of EUR6.7 billion. With this acquisition, Bouygues will have exhausted its financial flexibility at A3, but some benefits to Bouygues’ business profile will mitigate the significant debt increase and weaker credit metrics caused by this transaction. 330In those circumstances, as the parties unanimously acknowledged at the hearing in reply to a question put by the Court, which was duly noted in the minutes of the hearing, there is no need to adjudicate on the claims of the French Republic, FT, the Bouygues companies and AFORS for annulment of Article 2 of the contested decision, or to assess the validity of the pleas and arguments which those applicants have put forward in support of those claims.

That concept has a strictly legal character and is therefore dependent only on whether the beneficiary undertaking receives an economic advantage which it would not have received under normal market conditions. It follows that the Commission does not have any discretion in determining whether a measure constitutes State aid. It is only at the stage of the examination of possible compatibility of aid, as provided for in Article 87 EC, which involves complex economic, social, regional and sectoral assessments, that it has wide discretion. The Commission is therefore bound to characterise as State aid any measure which objectively satisfies the conditions laid down in Article 87 EC. 158In that regard, the Bouygues companies recall that State aid within the meaning of Article 87 EC embraces interventions which, in various forms, mitigate the charges which are normally borne by the budget of an undertaking and which, without being subsidies in the strict meaning of the word, are similar in character and have the same effect. Furthermore, no distinction of principle can be drawn on the basis of the form which the aid may take, since the concept of aid is based on the economic concept of advantage and the formal criterion is immaterial.

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In the light of that definition, declarations by which the shareholder in a company undertakes to take the necessary steps, and in particular to strengthen its capital base, in order that that company does not have financing problems constitutes a form of guarantee granted to its present and potential creditors. Prior to those declarations, FT was an undertaking with serious structural problems and an unbalanced balance sheet . Furthermore, the French State gave its support to FT in July, September and October 2002 without taking any steps to satisfy itself as to the possibility of FT’s recovery and to restore its viability, since such measures were adopted only subsequently .

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316As regards the alleged inconsistency of reasoning, it must be held that the Bouygues companies allege, in essence, a substantive error and not a formal defect in the statement of reasons. 298It must therefore be concluded that the Commission has not demonstrated that the announcement on 4 December 2002 of the shareholder loan proposal involved a transfer of State resources. 289In those circumstances, it must be concluded that the declarations from July 2002 did not involve any commitment of State resources within the meaning of Article 87 EC. 268It is necessary to determine, first of all, the nature of the declarations from July 2002, since it is decisive for their characterisation under both Community law on State aid and the relevant national rules. 195The Commission further rejects the criticisms put forward against the methodology applied in the report of 28 April 2004.

For decades, companies such as Equifax have acquired employee work histories and compensation data from employers to help lenders, landlords, hiring managers and other customers perform background checks of individuals. This document summarizes Moody’s view as of the publication date and will not be updated until the next periodic review announcement, which will incorporate material changes in credit circumstances during the intervening period. After reviewing the relevant authorities Lord Slynn held that the «flexible exception» to the double actionability requirement which had been created by the House of Lords in Boys v Chaplin AC 356 could apply in favour of not only the forum but also in favour of the law of the place where the tort occurred .