Prize issues 6 financial markets What's NewS Issue 12 December 1996 Rabobank has been presented with the prestigious Eurobond of the Year 1996 award by Corporate Finance magazine, the authoritative London-based monthly for finance professionals which is devoted entirely to corporate financing, mergers and acquisitions (M&A), treasury and capital markets. The award was based on the Eurobond issue for Royal Netherlands PTT (KPN), the Dutch telecoms and postal group, which Rabobank lead-managed in June, and it underlines a growing awareness among market participants of Rabobank's reliable performance and placement power in fixed income issues overall. Because the 10-year, NLG 1 billion senior debt issue The team s Liz Merica - happy was KPN's first call on the capital market as a private corporate player, it was therefore particularly delicate and its success was an absolute necessity. SUPERBJOB The Origination and Syndication Department's placement of the record- breaking Eurobond was so heavily oversubscribed that it was increased by NLG 300 million four days later. 'Syndication went so smoothly that we even had to turn down a few banks who wanted to participate,' said one salesman afterwards. (The issue, which matures in the year 2006 and carries a coupon of 6.5 percent, was co- managed by ABN Amro Hoare Govett, ING Barings, and SBC Warburg.) In the view of Corporate Financewhich announced the award in its December issue which is sent to a readership of more than 10,000 finance professionals, Rabobank 'did a superb job of whipping up investor appetite.' BIGGEST BOND Roughly 60 percent of the paper was placed among institutional (and some retail) clients in Holland, and roughly 40 percent went to investors in other European countries including Switzerland, Germany, Belgium, and Luxembourg. The mandate to lead manage this decisive issue was the outcome of a relationship that Rabobank cemented during the earlier, highly- publicized, and very successful first stage of KPN's two-stage privatization. The bond was about four times the size of the average corporate issue in the Netherlands and indeed constituted one the largest corporate bonds ever launched on the Dutch market. Thus, success was particularly gratifying for Rabobank's team and the proceeds are now helping KPN finance essential investments in new technology and services. TRIPLE SCORE According to Corporate Financethree factors helped seal the issues' success. First, Rabobank very skillfully fueled the market's speculation about KPN's expected credit rating. Investors were only informed of the strong Aal and AA+ rating (from Moody's and Standard Poor's respectively) just after the launch, which served to give an added fillip to the attraction of KPN's already strong household name. Secondly, the extensive scale-back of Dutch government borrowing on the market had produced a situation of pent-up demand for high quality long-term Guilder paper - just at a time when institutional buyers were rewriting their guidelines to permit more substantial investments in Eurobond issues. A third factor, according to Corporate Finance, was the rarity of the issue itself. KPN gave investors an alternative to the usual supranational issuers and the familiar banks that predominate in the 10-year field. PRESTIGE ISSUES Indeed Rabobank has been increasingly active in the long term Eurobond market, where it has recently lead managed issues for Royal Hoogovens (valued at NLG 200 million), for Achmea Hypothekenbank (NLG 200 million), Van Lanschot Bankiers (NLG 350 million), Bank voor Nederlandse Gemeenten (NLG 1.5 billion), Kredietbank International Finance (NLG 200 million), Landeswirtschaftliche Rentenbank (NLG 200) and DePfa-Bank (NLG 200 million). The prestigious Hoogovens deal was sold within half an hour of its launch. The deal for Achmea, a pooled treasury belonging to several Dutch mortgage banks, was also sold quickly on the first days' trading. The highly successful Van I.anschotBankiers exercise was also, like KPN, an important debut issue, while the jumbo Bank voor Nederlandse Gemeenten bond exceeded even KPN's in its sheer size. Of the proceeds from the Kredietbank International Finance subordinated debt issue, which was largely pre-placed among institutional investors and property developers in the Benelux, a portion was swapped into floating-rate guilder funds. CONSISTENT PERFORMANCE As a result of these and other highly successful deals, Rabobank ranked in late October just behind its much larger rival ABN Amro but ahead of ING Bank as one of the top-three bookrunners of guilder-based Euro- and international bond issues, having handled 15 issues valued at a total 6.8 billion (or one-quarter of the total market) since the start of the year. This figure is expected to increase to some NLG 7.5 billion by years' end as issue sizes and overall business volume increase. If there is a common threat that joins this tapestry of deals together, it is that 'investors have clearly come to believe that we can consistently deliver good performance and attractive spreads,' says Johan Roepman, the man who was instrumental in managing the successful KPN deal. News of the Eurobond of the Year 1996 prizes - which were also awarded to Abbot Laboratories, Parmalat, Petronas and Walt M Disney - is now spreading among corporate treasurers of the top 500 corporates both in Europe and the US who form the core of Corporate Finance's international readership base. EUROBOND OF THE YEAR AWARD Het prestigieuze blad 'Corporate Finance'heeft onze bank de 'Eurobond of the Year'-prijs toegekend voor de door ons in juni dit jaar geleidde KPN obligatie-emissie van NLG 1,3 mrd. Deze prijs onderstreept het bewustzijn in de markt van onze kennis en plaatsingskracht op dit gebied. De reden voor de toekenning is dat de emissie vier keer zo groot was als gebruikelijk op de Nederlandse markt, waarbij deze door goede marktbewerking zwaar overtekend werd en zelfs de verhoging van het oorspronkelijke bedrag van NLG 1,0 mrd. tot 1,3 mrd. nog niet toereikend was om aan de vraag te voldoen.

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