Rabobank opens new market with a JPY 50.8bn 10-year Tier 2 Samurai

On 12th December, Tokyo morning, Coöperatieve Centrale Raiffeisen-Boerenleenbank B.A. (Rabobank Nederland) priced the first-ever Basel III compliant Samurai Tier 2 transaction from a European Bank. The transaction is another successful step in reinforcing the issuer’s capital targets to a minimum Total Capital Ratio of at least 20%.

Rabobank is the largest Samurai issuer (with current outstandings of JPY 883.8bn in senior unsecured form) and is seen by Japanese investors as the best positioned European bank to open the Samurai Tier 2 market, given its long-standing commitment to the Samurai market, investors’ familiarity with its strong credit profile, existing Tier 2 curves in Euro and USD and Rabobank’s successful track record at executing innovative bank capital transactions.

On 11th November, Rabobank filed an Amendment to the Shelf with the Kanto Local Financial Bureau of the Ministry of Finance to inform Japanese investors of the terms and conditions. The issuer subsequently conducted a Tier 2 specific roadshow targeting core Japanese investors between 25th and 27th November to facilitate better understanding of the product, and differences between bail-in regimes and regulatory frameworks under Japanese and European jurisdictions.

Given the transaction was the inaugural Basel III Tier 2 Samurai transaction in the market, Rabobank and the Joint Lead Managers proceeded with an in-depth and prudent investor demand identification phase with soft sounding commencing on December 3rd. After confirming sufficient demand to support a benchmark-sized transaction, Rabobank and the Joint Lead Managers decided to start official marketing, beginning on Monday, 8th December, with price guidance of Yen Swap Offer Side (YSO)+ 80-85bps. The marketing range was gradually narrowed down and the transaction was priced on Friday, 12th December, at YSO+83bps. The pricing was carefully set to reflect Rabobank’s Tier 2 secondary curves in EUR and USD as well as the investor feedback collected during the marketing process.

Terms & Conditions

Issuer Coöperatieve Centrale Raiffeisen-Boerenleenbank B.A. (Rabobank Nederland)
Subordinated Bond Ratings A2 (Moody’s) / BBB+ (S&P) / A+ (Fitch)
Issue Size JPY 50.8bn
Tenor 10 year bullet
Re-offer Spread JPY 10 year Swap Offer Side Rate +83 bp
Coupon 1.429%
Pricing Date December 12th, 2014
Payment Date December 19th, 2014
Maturity Date December 19th, 2014
Lead Managers Daiwa Securities Co. Ltd.
Merrill Lynch Japan Securities Co., Ltd.
Mizuho Securities Co., Ltd.
Nomura Securities Co., Ltd.
SMBC Nikko Securities Inc.

 

Rabobank successfully issued the JPY 50.8bn inaugural Samurai Tier 2 transaction despite weaker global market conditions during the last phase of the marketing. The success of the issue is a testament to the strength of the Rabobank credit and the intense level of preparation that went into this breakthrough transaction in the months prior to pricing.

By investor type, the deal was supported by lifers, trust banks, asset managers, shinkins, specialized banks, non-financial investors and non-Japanese investors.

Joint Lead Managers were Daiwa Securities Co. Ltd., Merrill Lynch Japan Securities Co., Ltd., Mizuho Securities Co., Ltd., Nomura Securities Co., Ltd. and SMBC Nikko Securities Inc.

For further information
Press Office Rabobank
René Loman
+31 30 21 62622