BLiCOM
deals
Connected strategy
On-track in Australia
What's NewS Issue 3 April/May 2000
So nah, als war man da
Our global media and telecommunica-
tions group lias scored several key
successes in recent weeks including a valu-
able underwriting enabling the takeover
of Cablecom,
Switzerland's lcad-
ing cable com-
pany, plus a large
syndicated loan
transaction for
KPN, both of
which were deliv-
ered in conjunc-
tion with DG
Bank. These were significant signals of
our ability to further expand in this dy-
namic market, and also provide some of
the first hard evidence of successful com
mercial cooperation with the Germans.
'There's a lot going on in the cable mar
ket,' says Gerard van Kaathoven, head of
the Global Media Telecommunications
Group. 'Together with DG Bank, we have
dcveloped a joint strategie approach to
the German cable market. There is a huge
need for financing, which wc will handle
in tandem, plus substantial further oppor-
tunities for M&A advisory. We share a
long-term strategie interest in this market
and its players, and hope to further de-
velop this interest in other concrete ways
as well.'
Acting together with DG Bank, we have
co-arranged an acquisition finance for the
takeover by KPN Mo
bile, together with its
joint venture partner Bell
South of the US, of a
77.5% controlling share
in the German ccllular
operator E-Plus. Wc
have also both been in-
vited to participate in the
IPO of KPN Mobile in
the second quarter of this year. The two
activities help better position KPN in the
European market, providing access to the
still underserved German market and
widening its overall strategie footprint.
Says Kaathoven, 'not only were we able to
help the cliënt meet
strategie objectives, -
but, by acting together
with DG Bank, and by
turning a common face
to the market, we were
able to obtain a higher ranking in the syn-
dicate and thus receive higher fees.' In the
Swiss deal, we underwrote CE1F 160 mil-
lion of a 10-year amortizing loan that
hclps NTL - a leading NASDAQ-listed
broadband Communications company that
operates in the UK and Ireland - to fund
its 1999 acquisition of Cablecom - which
eplus
was establishcd in 1994 by Swisscom,
Veba, and Siemens. We thus supported a
major strategie move by NTE: Cablecom
provides basic cable TV as well as some
pay-TV services to its base of 1.4 niillion
subscribers - plus Internet access via Swiss
Online - and owns the only extensive
broadband local access and national back-
bone in a still underserved market charae-
terized by high per capital wealth and one
of the highest levels of PC penetration in
F.urope.
Our branch in Australia played an im
portant role in financing the privati-
zation of public transport in the State of
Victoria. Its government recently awarded
the National Express Group (NEG), an RI
London cliënt, a franchise to operate the
Bayside and Swanston train and tranilines
for some 12 years. Siemens is to build
rolling stock for the consortium over the
next 5 to 8 years, after which time NEG
will begin operating the franchise. To at-
tract funding necessarv to build this
rolling stock, a consortium of banks is-
sued AAA rated 15 and 20 year bonds.
Part of the bond proceeds were used to is
sue commercial paper, to diversify the
funding base. Rabo Australia played sev
eral roles: it provided the consortium with
a number of swaps to hedge the interest
rate risk over the 20 year life of the trans
action. It also delivered Guaranteed In-
vestment Contracts (GICs) and a liquidity
facility for the life of the commercial pa
per program. The undcrlving risk is dur
ing the period the rolling stock is being
built by Siemens, with Bayerische Landes-
bank AG providing performance bonds
for Siemens. Once the trains are built, the
risk will switch to the NEG consortium
and if, during the operational phase, the
consortium should default, the Victorian
government will step in. Hence, for
Rabobank, the underlying risk lies with
the AAA rated Victorian Government. Af
ter the bond issue, all proceeds were
placcd on deposit using GICs with Rabo
Australia, and during progress of con
struction will be used to niakc payments
for the trains. This deposit provides Rabo
Australia with a cheap and excellent fund
ing source.
This transaction was sourced by Aus-
tralia's Structured Finance, which worked
in close contact with the arranger Mac-
quarie Bank Limited to close the deal.
Structured Finance looked after the under
lying transaction analysis and the liquidity
facility, while GFM Australia and the
Netherlands branch handled the swaps
and GICs. The transaction produced sub
stantial fee income and attractive long
term funding, and also enhances RI's pub
lic recognition and its reputation on the
Australian market.
Due to some miscommuncation in a re
cent NewS Flash, hcre are the names of all
the contributors to the deal: Dienke Her
man de Groot, Sonja Jobberns, and Jackie
Griffiths of corporatc finance/ corporatc
banking/credit in Australia, Allen Mc-
Cristal, Andrew Quoyle, Andrcw Gal-
braith, Henk Rozendaal and Peter Norrie,
all of GFM. John White, Peter Healey,
Vincent Hoogland and Jaap Zwierenbcrg
all did legal work on this transaction, and
Tim Sharkcy (London branch) did the in-
depth analysis on the swaps. Rabo Ger-
many assisted with the analysis of the un
derlying Siemens risk.
