Paris bonds: €4.85Bn raised on the markets in 11 years, to whom and at what rate

When the Ville de Paris takes on debt today, it does not mostly walk over to its banker. It issues public bonds on the financial markets, sold to institutional investors — insurers, investment funds, foreign central banks. This practice, long-standing for the French State, is more recent for local authorities and makes Paris one of the very few French municipalities present regularly on the benchmark bond market.

Over the last twelve fiscal years (2013-2024), the City has carried out 8 bond issues for a cumulative total of €4.85 billion. At end-2024, this bond outstanding represents 76% of the municipality's own financial debt (€8.12Bn out of €10.70Bn). The rest comes from classic bank loans (Banque des Territoires, La Banque Postale) and various financial commitments.

This article documents each issue, the evolution of market conditions, the two themed issues (Social Bond, Green Bond), and the May 2028 maturity that will be the City's first real bond-refinancing test.

The full list of 8 issues

Since 2013, the rhythm has been roughly steady: one issue every 12 to 24 months, for an amount between €450M and €800M. Here is the detail:

The coupon — the annual nominal interest rate the City pays its bondholders — has ranged dramatically from 0.25% in 2020 to 3.375% in 2024. This is not a political choice by the City; it is the direct translation of market conditions: the European Central Bank's monetary policy, which kept benchmark rates close to zero from 2014 to 2022, then sharply raised them in 2022-2023 to fight post-COVID inflation.

The "rear-view mirror" effect: why the average rate stays at 2.1%

Despite that 3.4% on the latest issue, the weighted average rate of the entire bond outstanding is only 2.1%. The reason: 94% of the outstanding is at fixed rate, and the City still benefits from the extremely favourable conditions negotiated between 2019 and 2022 — those bonds will keep their issue coupon until maturity (often 2030-2034).

This is what is called the stock effect vs flow effect:

• Stock (total outstanding) = historical weighted average → 2.1%, the legacy advantage of the decade of low rates
• Flow (each new issue) = current rate → 3.4% in 2024, reflecting the new monetary reality

As long as the City does not issue too often, the stock evolves slowly and the flow effect weighs only marginally each year. But as older issues reach maturity (see below), they will have to be repaid and potentially refinanced — at the market rate of the time.

The two themed issues

Of the 8 bonds issued, two have been labelled to ICMA standards (International Capital Market Association) — a voluntary certification that requires the issuer to use the funds for specific objectives and to publish impact reporting:

Social Bond 2020 (€500M, 0.25%, COVID)

The City took advantage of the ultra-low-rate context of spring 2020 to raise €500M over 10 years at a historically low rate — 0.25%, the lowest level ever obtained by a French local authority on this maturity. The issue was labelled Social Bond in the ICMA sense, channelling funds towards spending in support of vulnerable populations affected by the health crisis (emergency shelter, social action, support for cultural actors in difficulty).

Green Bond 2023 (€600M, 3.125%, thermal renovation)

In September 2023, the City issued its first Green Bond in the ICMA sense for €600M over 10 years, at a much higher rate (3.125%) reflecting the new rate environment. The funds are channelled towards thermal-renovation operations on municipal buildings (mainly schools) and decarbonised mobility. It is one of the first Green Bond issues by a major French local authority.

These labels do not significantly reduce the cost of debt (the pricing benefit — known as greenium — remains in the range of 1 to 5 basis points only, according to Banque de France estimates). What they mainly do is open access to specialised investor pools (ESG funds, dedicated responsible-investment funds) that could not buy a classic bond of similar nature.

The 2028 wall: €750M to repay in one block

The 2028 maturity is the first real bond-refinancing event the City will have to manage. In May 2028, the bond issued in 2013 (Paris 2.125% May 2028) will mature. A particularity: this bond is "bullet" — meaning the principal is repaid in a single block at maturity, not progressively each year. The City will therefore need to find €750M in one go in May 2028.

Three scenarios are theoretically possible:

1. Repayment from cash on hand: unlikely, the City's current cash would not absorb a shock of this size.
2. Refinancing through a new bond issue: the standard scenario. Issue a new bond shortly before maturity, use the proceeds to repay the old one. The cost depends on 2027-2028 market conditions — if rates are around 3% as today, the annual cost will rise from €16M (2.125% × €750M) to about €22M (3% × €750M), an annual increase of €6M strictly tied to the refinancing effect.
3. Mix of refinancing and classic bank loan: Banque des Territoires remains a complementary channel for local authorities, sometimes at conditions more favourable than the bond market for medium-sized amounts.

A second important maturity follows: November 2027, when the 2015 bond (€750M at 1.75%) also matures. That is, over 6 months, €1.5Bn to refinance (15% of total bond debt).

This will be the first time the City faces such a sequence of bond maturities — earlier issues from the 2000s were mostly progressively amortised, not bullets.

Who lends to Paris on the markets?

Public bonds are placed via a bank syndicate (5 to 8 investment banks, including Crédit Agricole CIB, Société Générale, Natixis, BNP Paribas) which then distributes them to end investors. On recent Paris issues, the typical composition of subscribers is documented by the City's post-issue press releases:

• Insurers and pension funds: ~50% of each issue
• Foreign central banks and sovereign institutions: ~20-25%
• Commercial banks (for their HQLA — High Quality Liquid Assets — portfolio): ~15-20%
• Other institutional investors (asset managers, foundations): ~5-10%

This structure — dominated by European insurers — explains why Paris can borrow at conditions very close to those of the French State. Insurers seek euro-denominated paper, long-dated, very low risk. The Ville de Paris, rated Aa2 (Moody's) / AA (Fitch) — the same level as the French State — is one of the very few European local-government signatures to offer this combination.

The 2022 issue, 3× oversubscribed (subscribers asked for €1.5Bn for €500M available), illustrates this appetite: even in a context of rising rates, the Paris signature remains in high demand.

How Paris compares

Very few French local authorities issue public bonds regularly. Over the 2014-2024 decade, the main names identified are:

• Région Île-de-France: annual issues, several billions per year cumulatively
• Métropole de Lyon, Métropole du Grand Paris: occasional issues
• A handful of regions (Auvergne-Rhône-Alpes, Occitanie): occasional issues

Almost all other French local authorities finance themselves through:

• the Agence France Locale (AFL) — a mutualised agency created in 2013 specifically to give mid-sized French local authorities access to the bond market at moderate cost
• Banque des Territoires (Caisse des Dépôts) — long-term amortising loans
• commercial banks — La Banque Postale, Crédit Agricole, etc.

Paris is part of the very small group of French local authorities issuing in their own name on benchmark markets — alongside the Région Île-de-France, which is its main domestic comparator.

What these figures do not say

This analysis stops at what the open-public-data pipeline can measure (issues recorded in bond liabilities, financial conditions published at issue time). It does not say:

• The detail of spreads on the OAT curve (rate gap with the State) — these data are public only at the time of each issue, in Bloomberg communications, and are not systematically archived
• Bond performance on the secondary market — once issued, a bond trades between investors; Paris has no visibility on those transactions and the coupon stays fixed regardless
• The precise identity of end subscribers — post-issue allocation breakdowns provide averages by category, not investor names
• The effectiveness of Social and Green labels — impact reporting exists (published annually) but remains qualitative on many items

What it does say, in one sentence: the Ville de Paris has raised €4.85 billion on the bond markets in 11 years, at a historically low average rate (2.1%) it probably will not be able to reproduce on upcoming refinancings — notably the €1.5Bn wall of May 2027 and May 2028. It is a high-quality financial signature, but the "rear-view mirror" effect of low rates will mechanically wear off as old issues reach maturity.

Sources: open-public-data pipeline, files patrimoine_structure_2019.json to patrimoine_structure_2024.json (bond_issuances and instruments[obligataire] fields extracted from Annexe IV of the Ville de Paris administrative accounts) · Official Ville de Paris issue press releases (2013-2024) · Public Moody's and Fitch ratings · ICMA standards for Social Bonds and Green Bonds. Perimeter: public bonds issued in their own name by the Ville de Paris, excluding bank loans and various financial commitments.