Sustainability Bonds Framework

App3-Constant Strengthening of AFL's Equity Share capital 100% held by local authorities • • Each new local authority becomes a member through an initial capital contribution (ICC), valid for the entire duration of its membership The amount of this ICC is calculated based on the local authority's economic size: Max[kn*0,9%*(total outstanding debt); kn'*0.25%* (total operating revenues)] With kn = 1,125 and kn' = 1,2 No member can become a major shareholder (quick and significant capital dilution) + • Pay-out ratio of 5% maximum Annual profits added to retained earnings • Objective to strengthen the capital base as a priority 53 Regulatory capital CAFL Lo bonque des collectivités

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