Ever since the financial crisis, mortgage-backed securities are known as highly risky instruments. A French financial-services company now has become the first to offer such instruments again.

Crédit Agricole Financements (Suisse) has securitized Swiss mortgages. The French company emitted mortgage-backed securities worth 200 million Swiss francs, the company said in a statement today.

The securitization is based on a cooperation of Crédit Agricole's investment bank and Zuercher Kantonalbank (ZKB). Crédit Agricole emitted the papers in a bid to diversify its portfolio.

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ZKB placed the securities on the market. Moody's and Fitch rated the securities «AAA». The regulator agreed with the placement.

The mortgages backing up the securities are taken out to financed Swiss residential properties only.

First in 15 Years

The issue was the first such transaction in 15 years, the company said, adding that it helped the French bank to differentiate itself from its Swiss rivals.

With a securitization, loans are being bundled and sold on. The transaction serves the purpose of diversifying risks and banks generate liquidity. The products proved highly risky in the financial crisis because many underlying loans turned out to be bad.