New collaborations
Better deal economics
Spotting opportunities
This means new collaborations with
Rabobank's Global Financial Markets
(GFM) and Corporate Banking groups.
Arnold Schraa, Executive Director of
Corporate Finance (CF) in New York,
and Nader Pasdar, Executive Director,
Loan Syndications for GFM, give their
view of the new approach in practice.
'We used to focus on a small niche in the
American market: creating efficiënt
funding solutions for large, highly-rated
companies, some of which did not
represent our core business,' says Schraa.
'Now, we're focusing on the core business-
es, which include food and agribusiness,
media and telecom, and financial
institutions. And we're collaborating in
new ways within Rabobank.'
The foremost objectives are to create
better solutions for Rabobank's core
clients and raise efficiënt funding to
support the bank's activities. What kinds
of finance products are involved and how
are new collaborations helping to
achieve these goals? Schraa gives some
examples: 'We're currently working on a
large transaction that involves the
securitisation of part of the receivables
of a financial institution.Ourown New
York Assets Securitisation Group (part of
GFM) is helping the cliënt to do the
securitisation, in collaboration with
Corporate Finance NY. The transaction
involves consumer loans and leases,
which is a new area for Rabobank. As we
get more exposed to this kind of business,
GFM should be better able to gain the
confidence of the corporate cliënt base
for these kinds of securitisations.
'Another example is our exposure to
paper companies, who are clients of our
corporate bank in the United States. We
have traditionally been involved in the
monetisation of instalment notes that
paper companies receive from buyers of
their forests, in order to provide them
with funding in a structured way. Now,
we've also started helping our corporate
bank by providing an additional product
that will assist paper companies with
restructuring their debt.'
And internally, for Rabobank itself? 'We're
very active in getting more efficiënt
funding for Rabobank,' Schraa says. 'In
cooperation with GFM, Corporate
Finance NY was responsible for the
issuance of Trust-Preferred Securities
(TPS) in the United States, for example.
These TPSs raise funding and at the same
time increase the bank's tier-1 capital.
Rabobank is also becoming increasingly
active in the retail banking market, and
we're helping management to efficiently
fund those activities.'
According to Nader Pasdar, closer
collaboration with other Rabobank
partners brings opportunities that might
otherwise be overlooked: 'Historically,
Corporate Finance has been a buy and
hold book, unable to commit to larger
amounts than they have approval to
hold. Now, we can work with GFM's
Loan Syndications group to sell amounts
above our hold approval, thus achieving
better deal economics for the bank as a
whole. Another example is collaboration
with Rabo Securities USA (RSI). When CF
clients do a bond or equity offering, RSI's
securities underwriting capability will
allow us to underwrite pieces of the
offering. As a top-tier banking
relationship, we should always ask for any
securities business a cliënt may have.'
Other objectives of the new strategy are
to promote knowledge sharing and the
search for new markets. For corporate
clients, however, the main benefit is new,
tailor-made solutions with more than a
single focus.
Schraa continues: 'As we collaborate with
other groups and look for ways to use our
combined expertise effectively, we're also
sharing CF's structuring knowledge. And
we want to take existing products -
instalment notes for forest companies,
wine barrel leases, other products - into
new markets like South America, which
doesn't have a structured finance
business as we know it. But most
important is the ability to expand and
refine the solutions we offer our core
clients. We're now looking at including
leasing products from De Lage Landen,
Rabobank's leasing arm, and American
life insurance products in cooperation
with Interpolis, for example. Our core
food and agri clients are global and have
complex problems. We aim to be able to
create tailored solutions.'
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