AMSTERDAM--Rabobank Group will make privately-held certificates
available to outside investors as the Dutch cooperative lender is
forced to broaden its investor base in the aftermath of a
rate-rigging scandal.
Rabobank plans to list 5.9 billion euros ($8 billion) worth of
so-called member certificates on the Amsterdam exchange as of
January 2014, Chief Financial Officer Bert Bruggink said
Tuesday.
Investors have shown "considerable interest" in the bonds
because of the annual payout, which Rabobank will increase to 6.5%
from 5.2% currently, he said.
The move comes as Rabobank is dogged following a rate-rigging
scandal, which led the bank to pay around $1 billion to settle
accusations related to manipulation of the London interbank offered
rate, or Libor.
The scandal and Rabobank's announcement in October that it would
no longer support the price of the certificates triggered an
unprecedented sell-off this month. Unable to buy back such large
quantities of capital, Rabobank was forced to find outside
investors for the certificates.
"Events in the last months have been extraordinary," Mr.
Bruggink said.
The certificates, perpetual bonds with a subordinate status,
form a key pillar of Rabobank's cooperative structure. Since the
bank cannot issue stock to bolster its capital ratios, the bonds
are an important alternative source of high-quality capital.
The certificates are owned by employees and clients and are
tradable once a month on an internal market.
Mr. Bruggink said the certificates will continue to form a
"crucial part" of Rabobank's capital base and that the listing will
enable the lender to quickly access capital markets when needed, a
move that should reassure rating agencies. "We have that access
now," he said.
Rabobank has already managed to place forty million
certificates--worth some EUR1 billion--with institutional
investors, most of them outside the Netherlands, he said.
Write Archie van Riemsdijk at archie.vanriemsdijk@wsj.com
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