34 issue 24 ju RI WORLD ACT Earlier this year, GFM and Rabobank Milan completed the bank's first non-deliverable forward (NDF) trade* for Italian coffee giant lllycaffè. Rabobank has been working with llly since 2004, mainly on the commodities trading front, but the NDF deal marks a step up in their relationship. "This is a landmark deal, as it represents a new source of income with an F&A cliënt, one that was only trading with us on the commodities side until recently," says Eliana de Rossi, of GFM's Corporate Risk&Treasury Advisory Europe. The deal consisted of three euro/Brazilian real NDFs with tenors between 4 and 5 months, worth BRL 14 million each, making the total deal size BRL 42 million (EUR 17 million), with llly buying reals and selling euros. llly buys around 300,000 bags of coffee from Brazil annually with an equivalent exposure of BRL 80 million, which means Rabobank has hedged a large portion of llly's total exposure to the Brazilian currency. This new business is a direct result of Rabobank's increased focus on F&A and its strengthening of the Italian sales team, says Marco Pallazzi, Senior Relationship Manager in Milan. Pallazzi joined Rabobank Milan in 2007, when Rabobank was adding to its Milan-based team and intensifying its relationship with llly. Pallazzi: "First, we decided to use FAR to gain access to clients by offering industry intelligence they could not get elsewhere. Our unique focus on the F&A sector, our credit rating and our approach to sustainability, plus our products, give us a unique edge with F&A clients, as we can offer more than any other bank in Italy. llly is proof of that, as the company now sees us as a true strategie partner. We now have regular meetings with the CFO and the heads of Derivatives and Treasury." FAR enables Rabobank to talk to clients at a strategie level and in their own language, says Rossella Schiavini, General Manager of the Milan office. And of course Rabobank's commodity trading relationship with llly - at CFO level - put the bank in the right place at the right time to recognise the opportunity to offer the coffee giant other products, such as the NDF. Of course, none of this would have been possible without the close cooperation between the Milan team and GFM and between the New York, London and Milan offices. As Senior Relationship Manager, Pallazzi is in constant contact with llly's CFO to address any financial issues, while De Rossi and the traders are in touch with llly's head of derivatives and head of raw materials. Pallazzi: 'This enables us to anticipate the client's needs and offer tailor-made solutions. In llly's case, one of their main risks is the price volatility of coffee, as this has a direct impact on margins. The price depends on both commodity prices and the euro-dollar and euro-real exchange rates, and we had to structure a deal that took all of that into account, which is where GFM's expertise comes in." GFM is the most successful provider of services to Rabobank Milan and the collaboration has been excellent, Schiavini says. It is the first of Rabobank's product providers to truly align with the business strategy of individual country offices. Schiavini: 'The llly deal proves just how well the RMs and product managers are working together to identify and seize opportunities with clients, as our daily dialogue with clients develops," she says. The evolving relationship with llly is also a perfect example of how the commodities hedging business can act as a springboard to new business. Right now, Rabobank Milan and llly are in talks about working with Rabobank's Trade Commodity Finance (TCF) business on financing for llly's coffee supplier around the world, Pallazzi says. "And the more Rabobank Milan works with llly, the more parts of RI's business offering they will unlock and use," Schiavini adds. A major factor in the success of the llly collaboration is that Rabobank Milan can call on dedicated resources, across the world, that have a dedicated country focus. "Marco can piek up the phone and talk to Eliana and she knows the customer, their business cycle and their market. And she knows what products they might need," Schiavini says. In fact, it was Eliana De Rossi who pulled everything together, says Andre Kitahara, an Interest Rate Derivatives trader with Rabobank in New York, who played a key role in pricing the

Rabobank Bronnenarchief

blad 'RI World' (EN) | 2010 | | pagina 34