Selling the bank
Safety in letters
FUNDING LIQUIDITY
Euronext and Rabobank launch listing
If you call up any major corporate or financial institution and ask
about Investor Relations (IR), you'll usually be referred to a sepa
rate department. Rabobank does it differently. IR is an integral
part of the Funding team within Group Treasury.
that would give us access to, say, retail
customers in the Asian countries. That is
why we also use intermediaries, other
banks which sell to both their wholesale
and retail customers, supporting
Rabobank with its funding efforts.'
Selling debt successfully depends on a
number of factors. Dijkstra explains,
'Potential investors are looking for spe-
cific components that inform their deci-
sion to buy our bonds or other
instruments. One is our rating and
another is our business model.
Fortunately, Rabobank has one of the
best ratings in the world: AAA from
almost all agencies. And we have the
kind of name recognition that goes with
an AAA rating. We also have a global
presence and distribution capability,
through intermediaries. Furthermore,
we meet an additional criterium: a track
record of strong performance of our
bonds. Put these factors together and we
rate pretty high on anyone's list of
strong, low-risk borrowers. This fact
was confirmed by Euroweek when we
won the 'Best borrower 2002' award
(pictured right), for the first time in
April 2003.'
Transparency is today's buzzword. While many institutions and busitiesses
issue short-term debt instruments, such as Certificates of Deposit (CD) and
Commercial Papers (CP), many potential investors cannot put more than 10% of
their portfolios into these instruments. This is because there has been no regu-
lated market for them. Until now. Rabobank has worked closely with Euronext
Amsterdam to develop a new listing facility for short-term debt instruments.
'In fact,' explains Executive Board member, Hans ten Cate, 'this move is fuelled
by our desire to broaden our investor base. Now we can list our CD funding
program and professional investors will be able to include more money market
instruments in their portfolios because they form part of a regulated market.'
Rabobank was the first issuer to take advantage of the new listing in February
2003 with its €25 billion CP and CD program.
There is a simple reason for the dif
ference. Listed companies have
shareholders, ranging from institutional
to retail investors. IR is usually focused
on the general management of informa-
tion flows to all these groups, to ana-
lysts and press, and as such, it forms
