i Creative issues
WHAT'S NewS Issue 1 January 1997
new products
11
Rabobank, is a leading player on the domestic Dutch market for private
placements, closing an estimated two out of every three deals made. But its
recent NLG 1 25 million placement for Van Ommeren, a Dutch tanker storage and
shipping group, was unique in several ways.
The latest deal is a follow-on to a
relationship that has been carefully
cultivated over the last two years: indeed,
Rabobank has become the company's
'house bank'. It is an example of how
knowing your customer can produce
tailored products that meet their specific
needs. Rabobank structured the 10-year
'spread locked fixed rate loan facility' -
with a drawing period of three years - in
fcecember 1996. This was done in close
cooperation with Van Ommeren and the
placement was assigned the name
VOLVERA. Earlier, in June, it structured a
private placement for the same firm.
GLOBAL AMBITION
What distinguishes the latest loan facility
from the earlier private placement is that
it offers Van Ommeren a three-year period
in which to decide whether to actually
draw on the available sums. It also
guarantees that these credits will be issued
at a fixed spread above the yield of Dutch
state loans. Why the special structure?
'Van Ommeren is on the verge of a new
expansive phase, after investments not
only in quality, and in new terminals
worldwide, but also in acquisitions and
■oint ventures. It is the company's
Inbition to become one of the world's
Paul Michielsen
leading tank storage and tanker shipping
companies in the shortest possible time,'
explains Ellen Meijer, the Van Ommeren
senior account manager.
ATTRACTIVE SPREADS
'The company has been searching for a
way to broaden its potential funding base
with a wider range of investors,' she
continues. 'They know they will need this
money but they don't know precisely
when. At the same time, they regard the
current market spreads as attractive. In
view of the fact that these might widen,
Van Ommeren wanted to take advantage
•he Fixed Income Sales Team which succeeds time after time in placing our
sues in no time at all. They were responsible for KPN, Floogovens, Achmea,
Van Lanschot, Bank voor Nederlandse Gemeenten and DepFa.
From left: Edsel de Graaf, Marie-José Kayser, Johan van Waart, Michael Jasper,
Jaap Smit, Gert Jan Vliem, Jilles Flerpers, Koos Derksen, Victor van den Heuvel,
Charles Hennen, Theo Verboom (sitting) and Doreen Philips.
of this opportunity. What we were able to
do, by providing an option to borrow
together with guaranteeing a fixed spread,
is to make sure that both of their
requirements were fully addressed.'
BALANCING UP
The new loan facility helps Van Ommeren
to position itself financially for a new
phase of strategie growth, as well as
meeting another, balance sheet related
objective. 'Van Ommeren wants to
balance the long term assets with long
term liabilities. Tankers and terminals
have a long redemption period - often as
long as 20 years,' Meijer explains. 'It is
important to match the two sides of your
balance sheet.' The new structure has been
taken up by five institutional investors.
The nominal spread, in the case of the Van
Ommeren facility, is a fixed spread over
state loans. Actually, because a
commitment fee and a non-utilization fee
is added on, these investors can actually
look forward to this fixed spread plus
some additional basis points over state
loans. Moreover, the private placement is
better documented than a public bond.
CLIENT COMPLIMENTS
The deal itself was engineered in a
remarkably short period of two weeks,
says Paul Michielsen, coordinating
account manager investment banking.
'This arrangement perfectly fitted the
needs of both borrowers and lenders.'
Indeed, the Van Ommeren board of
directors complimented Elenk Visser on
the quick and creative way in which
Rabobank delivered on the deal. But this
is not the end of the affair: the structure of
the Van Ommeren private placement is
potentially attractive to other players on
the market as well. 'Other clients may well
find themselves in the same position,' says
Michielsen, who reveals that he is even
now working on three deals with a similar
structure. 'If we want to remain a leading
player, then we can do so by coming up
with innovative new structures like this.'
PRIVATE
PLACEMENTS
In de markt voor Private
Placements zijn wij een
belangrijke speler. In december werd voor
Van Ommeren een 10-jaars 'spread locked
fixed rate loan facilityopgezet. Het
bijzondere aan deze faciliteit is dat Van
Ommeren gedurende driejaren kan
besluiten of zij hiervan gebruik wil maken
en de rente vastgesteld is met een vaste
marge op de rente van de Nederlandse
staatsleningen.
