deals AGCO securitization - designed for growth Fast work delivery in China noto bene What's NewS Issue 2 March 2000 I 3 As reported in a What's NewS Flash several weeks ago, RI has successfully structured and underwritten a milcstone deal in the US: the USD 250 million assct backed securitization facility for AGCO, an important Rabobank cliënt and strate gie business partner. The Duluth, Georgia- based US firm is one of the world's lead- ing designers, manufacturers, and distributors of agricultural equipment, with yearly sales of USD 2.9 billion. It markets a full line of agricultural machines including tractors, combines, hay tools and farm implements, all of which are sold through a far-reaching international network of dealers and dis tributors under the brand names Massey Fcrguson, Allis, Deutz Allis, and others. What's more, the AGCO group provides retail credit for equipment purchasers through the Agricredit joint venture with Rabobank. The Rabo-structured securiti zation delivers to our cliënt a lower cost of borrowing and a one-time acceleration of cash flow (with a corresponding reduc- tion in outstanding debt). On the markets, it also provides a clear demonstration of RI's credit structuring and execution capa- bilities. 'Rabobank has done a great job of coming through and making the deal very smooth; as always, the bank is consistently easy to work with and it ranks among our most valued business partners,' remarked Patrick Shannon, AGCO's Vice President and Chief Financial Officer. The purchase of AGCO's receivables was financed by issuing asset-backed commercial paper. This paper was marketed as the inaugural transaction of Nieuw Amsterdam Receivables Corporation (New Amsterdam), a new USD 5 billion multiseller program designed for RI clients and prospects. A Delaware-based special purpose company, New Amsterdam was set up to augment our assct securitization capabilities. The first, AGCO-related tranche of commercial paper received solid ratings of A-l/P-l/Fl from S&P, Moody's and Fitch IBCA respectively. The creation of New Amsterdam gives Rabobank relationship managers a powerful, low-solvency, capital markets-based tooi to compete for fresh cliënt business. According to Shcldon Sussman, global co-head of credit structuring bascd in New York, 'the creation of New Amsterdam and the inau gural AGCO transaction were the results of an inten sive collaborative effort in- volving a host of Rabobankers in New York, London, and Utrecht over the past six months.' The principal architects of this transaction include corporate bankers Adriaan Weststrate and Betty Mills in Atlanta, and the structuring team in New York consisting of Eraj Asadi, Wing Ng and Gary Gal. In addition, we would like to acknowledge the guidance and support of members of New York Credit and Mid- dle Offices, whose efforts were instrumen- tal in the establishment of this program. m Recent weeks have seen a spate of high-profile, big dollar deals and What's NewS can report that more will be announced shortly. But amid all of the justifiable pride that these transactions generate, it is important to remember the large number of bread-and-butter transactions regularly generated by Rabobankers throughout our global network - deals that might be small but are equally fine. The focus this month is on China, where our Beijing office recently concluded two transactions that, while modest in dollar terms, advance our ongoing relationship management ambitions and demonstrate our ongoing ability to mobilize expertise in the pursuit of delivering cliënt value. The first deal was a USD 3 million credit in favor of a Chinese local bank to find the local currency working capital needs of Friesland Tianjin (in exchange for which the cliënt deposited a collateral pledge for the santé sum at our Hong Kong branch). While the deal was admittedly a simple one, it was delivered with impressive speed. The cliënt approached Rabo in November, but specified that the funds had to be disbursed before cnd-Dccember 1999. Normally, this would have been impossible - 'even the cliënt thought it was unlikely given the bureaucratie red tape involved' says Lai Chong Tuck of Shanghai - but an intense collaborative effort between China and Utrecht ensured the clicnt's needs could be met. This fast response time 'opened the door to other business possibilities such as M&A in the near term.' Secondly, we acted as arranger and participated to a value of USD 16.5 million in a USD 200 million commercial paper program for SINOCHEM (China National Chemicals Import Export Company). 'Our participation contributed to the If you would like to know more about the complex deal put together for Eurofresh in the US and reported by us last month, you can contact Richard Cerf of our San Francisco offier for details. final success and closing of the commercial paper program and was very niuch appreciated by senior management. This effort, coupled with regular senior-level management contacts, has strengthened our relationship with this important agribusiness group and brought forth further spin-off opportunities.' For example, Rabobank has since been approached to finance SINOCHEM's lucrative fertilizer trade business, where imports alone are valued at some USD 3 billion annually, and potentially to structure certain of the clicnt's barter trade activities in the South East Asian market. Both deals further heighten our profile on this fast-growing market.

Rabobank Bronnenarchief

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