Rating: Aaa/AAA/AA+
Amount: £350m
Maturity: 6 June 2014
Issue/re-offer price: 99.912
Coupon: 50bp over three month Libor
Spread at re-offer:53bp over three month Libor
Launched: Friday 27 May
Payment date: 6 June 2011
Joint books: Barclays Capital, Royal Bank of Scotland
Bookrunners’ comment:The Westpac trade on Thursday was well received. We’ve only seen a couple of deals in this curve over past two years. With the market backdrop as it is, investors are defensive, and there is good appetite out there for FRNs. Investors want high quality assets in this environment, so Rabobank was perfect for this.
In euros, NAB have a three year floater, a recent trade, that was bid at around 55bp, Rabo have a three year floater trading round 38bp, so the 17bp differential between Rabo and an Australian major in euros was consistent with what we felt the differential would be in
sterling.
With the Westpac the three year sterling coming at Libor plus 70bp, we felt 53bp was the right number for Rabo, so we went out with 53bp-55bp guidance.
The book was oversubscribed at that level, with limited price sensitivity, so we could do a straightforward £350m deal at 53bp.
Geographical distribution
UK 83%
Other Europe 17%
Distribution by investor type
Money market funds/asset managers 62%
Banks 35%
Others 3%
Market appraisal:
"...this was successful. But investors already have a lot of exposure to Rabobank — they did a 30 year sterling earlier in the year — and some are overweight in that credit. That explains the contrast in volume between Westpac and Rabo in three year sterling."
