Construction IT Update for SUCCESS 6 working relations What'S NewS Issue 2 February 1996 Continued from page 'Owning Cementbouw, NBM- Amstelland has a much better cyclical profile and will likely earn consistently higher earnings per share/ says Dominique Bech, executive director of E IQ P Equity Capital Markets, explaining why the issue was so well O O oversubscribed. TAX DEDUCTIBLE DIVIDENDS But there was another important dimension to its success, says Bech, who worked together with colleague Marianne Schoemaker to organize the equity aspects of this deal. The new issue marks the first time that Rabobank has mobilized an innovative structure under which the cost of NBM-Amstelland's dividend payments to shareholders has been rendered deductible for the purposes of tax. HYBRID PRODUCT This hitherto unknown device was engineered by Structured Finance in conjunction with an outside tax partner, the international audit and tax firm Moret, Ernst Young. It was a hybrid product that essentially works by offsetting the higher relative cost of a company's after-tax dividend payments with a pre-tax interest rate deduction. An added benefit of this instrument, unlike a conventional loan, is that it simultaneously enhances the balance sheet. Notes Hem Mulders - a member of the Structured Finance team NBM-AMSTELLAND - CONSTRUCTIEVE 0^ INNOVATIE De Rabobank is co-leadmanager in de aandelenemissie van NLG 234 miljoen voor de overname van Cementbouw. Daarnaast heeft de bank een structuur opgezet, waarbij de kosten van NBM-Amstelland's dividendbetalingen aan aandeelhouders fiscaal aftrekbaar zijn gemaakt. Deze structuur is tot op heden nog niet eerder op de markt gebracht. Het is met name aan deze constructie te danken dat de Rabobank concurrent ING, die in 1994 samen met ABN Amro een convertibele obligatie-emissie deed, kon passeren. that also includes Wilfried Mulder - 'this product has never been seen on the market before.' Bech is convinced that it played the decisive role in securing Rabobank its leading role in the deal. 'There's no doubt this was what put us at the top table as co- lead manager,' she says. BOARD SUPPORT Looking back, the NBM-Amstelland co- lead managership provides a good example of how the bank's resources can be creatively synergized. 'I happened to know that NBM were planning this major takeover and so we geared up to advise them on ways to organize the financing from the start,' explains Bech. 'At the same time, I received word that Hem and Wilfried within Structured Finance were working up a special product on their side. So, we put our heads together and decided this would be a perfect place to put it to work. We had firm support from the board from the start. We could piek up the phone and get a green light on the spot.' MULTI-DIVISIONAL COOPERATION At the end of the duy, all the participants agree that in-house communication and multi-divisional cooperation of this kind will play an increasingly important role at a time when the bank is aggressively breaking into already crowded and competitive fields. The result of these open communication lines in this case has been an important step forward for Rabobanks' thrust into investment banking, a well- guarded territory that has been enjoyed by the biggest players for many years as if it were their own, exclusive domain. History has taught warriors a lesson. For those who are intent on penetrating the well-fortified castle of a powerful adversary, a well engineered secret weapon can sometimes do just as well as brute force. Information technology (IT) is becoming an increasingly important part of the Rabobank organization, but has hitherto received little coverage in What's NewS.This month marks the start of an IT column dedicated to reporting the main points of IT development. In the attempt to fully convert Singapore to the Atlas system, a very sizable job involving enormous effort on the part of the teams in Singapore and in Utrecht, management was alerted to software deficiencies in the Atlas Branch Model that needed to be solved before the project could move ahead.These problems have now been debugged. In the meantime, Singapore has also successfully upgraded to release 1.12 ofTrade Atlas, which supports the front office in forex and money market activities. Last year.the Zurich office completed a successful implementation of the Olympic system with great assistance from IT experts at the International Private Banking (IPB) centre in Luxembourg. A more robust Atlas has also now been implemented in Dublin. Reporting difficulties associated with the new system in Madrid were identified and are being addressed as well. Paris is slated for implementation next. Devon was successfully implemented in the Singapore office during the last quarter of 1995 and went live on 1 January 1996. The first two phases of the Eximbills system (collections and import letter of credits), have been successfully implemented in the Hamburg office in Germany A Business Impact Analysis has been conducted in Brazil to identify the extent to which the Atlas concept might be suitable to the local environment.The Business Impact Analysis showed that the Atlas system was in fact unsuitable in the Brazilian context due to extreme local requirements, which include inflation and general accounting principles. In view of this situation, an alternative local software solution will be found in the next few months. As part of the effort to coordinate international IT activities, several members of the international division have been seconded to Holland to form a team that will workon implementation of the MIS/Sybase project.They include Eelco Kaan and Patty Liu from Hong Kong and Lopez Ramirez Robertofrom Curagao. Jesse Brewster has been transferred from Curagao to the International Private Banking IT centre in Luxembourg.

Rabobank Bronnenarchief

blad 'What's news' (EN) | 1996 | | pagina 6