Credit Logement has announced that it will not exercise the calls on the first callable dates of the FRES 2004-2 and FRES 2005-1 transactions, which are due on 27 and 21 December respectively. Both deals are synthetic ABS that transfer risk to optimise regulatory capital requirements under Basel 1.

The company indicates that it is expecting further clarification from the French regulator on the adoption of its internal model under the transition period to full Basel 2 implementation. At this stage, Credit Logement has no visibility on the timing of the final decision, which should occur at some point in 2010 - although implementation may not take place until 2011. This would delay redemption of the notes by one more year.