Etterbeek’s municipal bond | Les Marronniers - Les Carrefours School Complex

Risk: The works will be carried out via a centralized public procurement process initiated by Sibelga under its Renoclick missions. The works are planned for summer 2025, subject to the availability of a contractor, who will only be known around May 2025. The works could be delayed.

Consequence: The occurrence of this risk could - in theory - impact the repayment capacity and schedule. It should be noted, however, that the reimbursement is provided for in the local authority's budget, independently of the completion of the project.

Risk: There is a risk that the price of raw materials will rise relative to today's forecasts.

Consequence: If raw material prices rise, the difference will be financed by bank loans. This will have no impact on the renovation of a ‘Les Marronniers – Les Carrefours School Complex’’ but could affect ETTERBEEK's budget for future projects.

Small risk. 

 

The municipality is a public authority whose financing is governed by the New Communal Law.

 

General financing of municipalities is achieved through two allocations, one for compulsory general financing and a third for contractual general financing.

 

In addition, the New Communal Law states the following:  Under no circumstances may the budget for municipal expenditure and revenue show an ordinary or extraordinary deficit, nor may it show a fictitious balance or surplus.

 

If the income entered in the budget is insufficient to pay a recognized and due debt of the municipal, or a debt resulting from a final decision of an administrative or judicial court, the municipal council proposes the means to make up for it. If the revenue entered in the budget is insufficient to pay a recognized and due debt of the municipal, or a debt resulting from a final decision of the administrative or judicial courts, the municipal council proposes the means to make up for it (art. 258 NCL).

 

In other words, a municipality is subject by law to a certain budgetary rigor.

 

Finally, a municipality has a fiscal power recognized by the Constitution (fiscal autonomy of the municipality).

 

Risk 1: The loan issued by ETTERBEEK does not guarantee a return or repayment of the loan. 

Consequence: If ETTERBEEK fails to meet its payment obligations, the investor benefits neither from a personal surety (such as a guarantee) nor a property surety (such as a pledge or mortgage). However, the risk of ETTERBEEK defaulting on its payment obligations is only theoretical, given that repayment is provided for in the municipality's budget, which must be approved by a number of independent bodies (such as the municipal council and the government of the Brussels-Capital Region, which exercises administrative supervision over the Brussels municipalities), and that - as stated above - it is not permitted for a municipality to find itself in default of payment. All payments to be made during a financial year are therefore provided for in the expenditure and revenue budget.

 

Risk 2: The government is currently working on tax reform, and it is possible that the new government will decide that this will involve changes to the tax regime for loans.

Consequence: Such a regulatory change may cause investors' net return to differ from the current target return, either positively or negatively.

 

Risk: There is a risk of cybercrime affecting the platform, or another IT-related problem leading to (temporary) non-functioning of the platform.

Consequence: Should the platform be temporarily or permanently unable to provide its services, subscriptions previously made remain valid. In addition, SPREDS has procedures in place to ensure the continuity of critical services. The probability of permanent failure of SPREDS is very low.

Risk: The loan does not provide for early repayment. 

Consequence: Investors will receive full repayment of the principal at the end of the repayment period, i.e. on 02/01/2031.

Risk: SPREDS has not conducted an analysis of the proposed project.

Consequence: Any investor considering subscribing to the loan should make its own analysis of ETTERBEEK’s solvency, activity, financial situation and prospects.

To the best of the project owner's knowledge, there are no other material risks associated with its activities.