Capital connections
Reputation is all
Frederik Hoek
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on their specialist local and sector knowledge to ensure that it
reaches the widest possible investor base.
Investor Relations plays a key role. 'Investors know us as a Triple A
credit, but not everyone appreciates how active we are as a global
borrower,' says Frederik Hoek, who heads up the department.
'We have to get out there and explain why Rabobank paper is
a good investment for their portfolios. It helps institutional
investors a lot if they can follow our performance over time
so I make sure they get that continuity of information.'
'If we are to keep our existing investors happy,' adds Gower, 'our
paper has to perform well in the secondary market. Rabobank
International is an important ally here. As such, price is never the
sole consideration when we issue. We also want to be satisfied
that any new paper won't harm outstanding debt or damage
our standing amongst the Triple A peer group.'
The Triple A status confers hard-won privileges, but has to be
zealously guarded. 'That,' says Hoek, 'is the main story you need
to convince investors about. It's not just that we are Triple A
today. They have to be confident we will remain that way in
the future.'
They like to know that our balance sheet is solid, but they want
reassurance that the business is on the right track. I talk about
tangible things like our international network of food and agri
research centres and our low loan loss rate in that sector. It helps
them to understand that, at Rabo, banking decisions are founded
on in-depth market knowledge.'
As an active, global borrower, Rabobank looks after a sizeable
population of major international investors. Senior
management, often including the CFO, regularly tour key
territories - China, Switzerland, Japan, Australia, and the States
are just a few - to keep them in the picture. Road shows take in
the main institutions, ideally one at a time, over several days.
The group splits its efforts between existing and new contacts.
In Frederik Hoek's (Head of Investor Relations) view, there is no
substitute for face-to-face contact. 'We don't set out to sell
specific issues. Rather, we introducé investors to the bank. We
try to create a climate where investors will feel comfortable
buying our paper. It really helps if they can ask their questions
and look directly into our eyes.'
'It's a truly global effort', says Floek. 'We visit every major
territory and we target investor communities with specific
opportunities. Take Germany: after the downgrading of
Landesbanks, we think Rabo paper looks like an attractive
alternative. Similarly, in Canada, the government's just got rid
of the 35%foreign content restriction on money and pension
funds. That creates an opportunity.'
Rabobank's strategy of becoming a truly global borrower has
been in motion for some time. Rabobank has excellent market
penetration in Europe and Asia, but the world's largest pool
of liquidity is in the US, and Rabobank has barely scratched the
surface there. This is the logical next step.
