Maturity: 26 August 2013
Issue price: 100.539
Fixed re-offer price:100.014
Spread at re-offer: 12bp over mid-swaps
Launched: Tuesday 9 August
Payment date:26 August
Joint books:UBS, Sarasin (no books)
Bookrunner’s comment:We identified demand at the short end of the curve following the Raiffeisen Schweiz, Pfandbriefbank Schweizerischer Hypothekarinstitute, Compagnie de Financement Foncier and Nordea Bank’s trades at the beginning of the week. Investors are looking for SNB’s substitute in the money market since the central bank announced last week it will stop issuing bills. Bondholders looked to Rabo as a valid alternative due to its strong rating and agency touch.This is Rabobank’s fifth Swiss franc trade this year. The issuer had not tapped the market since March.
We launched and priced the trade at Sfr200m with a spread of 12bp over mid-swaps. This transaction was based on an absolute yield rather than a spread play. The 0.3% coupon translated into a 0.29% re-offer yield.
Treasury accounts and money market funds drove the trade. Institutional accounts, which were interested in parking money in a safe asset, participated to a smaller extent.Market appraisal: "...investors were interested in buying Rabo paper as it is considered to be a special financial, close to the agency space.""...I think it was a good idea to bring this triple-A name to the market at a time when investors are looking for top rated names.I believe bookrunners were looking to follow Raiffeisen’s and Pfandbriefbank’s trades priced earlier in the week.The only holdback might have been Rabo’s established presence in the market. Some investors might have held back if they were already exposed to this name."