(We’ll get our coat)
Since there’s a question-mark over who’s going to buy the circa €200bn of fresh eurozone sovereign debt being sold in the first three months of 2012… Read more
Ahead of Wednesday’s main event – the 3-year Long Term Refinancing Operation – we present a brief preview via Rabobank.
It brings together much of what we have been writing about over the past couple of days – the sharp decline in demand for the Main Refinancing Operation on Tuesday and the take up for the one-day fine tuning, or bridging, facility – to make a couple of points Read more
Rabobank is planning the first bank bond to comply with forthcoming European rules, offering a new type of capital as banks across the continent try to fortify their balance sheets, says the FT. The market for so-called hybrid Tier 1 bonds, which possess features of debt and equity, has been closed since February as banks grappled with market uncertainty and incoming regulation. Basel III rules and the European Commission’s capital requirements directive propose a host of new conditions for hybrid debt. The notes from Rabobank, the Dutch co-operative lender, would act exactly like normal bonds unless the bank breached certain capital limits, at which point they would be written down. This write-down feature is important for new types of bank debt as European regulators move increasingly towards incorporating ‘bail-in’ features into bank debt, meaning bondholders will have to share the losses of a failed bank.
Executives at Swiss private bank Sarasin are pushing majority shareholder Rabobank of the Netherlands to sell its stake in a SFr3bn ($3.4bn) management buy-out, reports the FT. Joachim Straehle, Sarasin chief executive, said no formal negotiations had begun, though there had been informal talks. In the event of an agreement, Straehle told the FT, he was confident of securing funding for a deal from potential financiers in the Middle East, Asia and Switzerland. Rabobank, a mutually owned Dutch lender with its roots in the agricultural industry, has been a key crutch to Sarasin through the financial crisis thanks to its rare triple A credit rating. Read more
Rabobank is planning the first bond to comply with tough new global rules on which securities can count towards regulatory capital, reports the FT. The Dutch mutual, the only private sector bank with a triple-A rating, is marketing a deal for a hybrid in which investors will lose all their money if the bank breaches pre-set capital ratios. The deal comes after the Basel Committee on Banking Supervision last week said that all hybrids must in future contain a mechanism for forcing investors to take losses at the point of that bank’s crisis, either by converting to equity or, as in Rabobank’s deal, writing off the value of the deal. Read more
Investors have rushed back in to fund the activities of Europe’s banks after the publication 10 days ago of the regulator’s stress tests, despite criticism that the checks lacked stringency, reports the FT. A wave of bank bond deals were launched across the continent last week, as markets rallied on both the stress tests’ outcome and loosening of proposed Basel III bank regulations. Spanish banks were among the busiest issuers, while other European banks to launch debt issues included Barclays, BNP Paribas, BPCE, Credit Suisse, HSBC, Intesa Sanpaolo, Rabobank, Royal Bank of Scotland and UBS. Read more
Private investors who lost millions in an alleged German Ponzi scheme have threatened legal action against the UK’s Barclays and HSBC as well as Rabobank of the Netherlands, alleging the banks may have acted irresponsibly, reports the FT. The development adds another twist to the German criminal investigation into Helmut Kiener, founder of the K1 hedge fund group, who state prosecutors allege stole upwards of €300m ($390m) from investors and banks. Read more
We all love a good league table – so here’s one from Rabobank economist Shahim Kamalodin.
No prizes for guessing which major industrialised economy is most vulnerable to a sovereign debt crisis, although interesting to see Japan, the US, Belgium and France all sitting above the UK, Spain and Ireland. Read more
While US investment bankers face congressional grillings and “bonus rage”, Britain – somewhat ironically – is looming as a shining centre of bonus redemption for litigious bankers.
Even as the UK attempts to halt a bonus culture that politicians blame for helping to create the credit crisis, imposing a 50 per cent “super tax” on bank bonuses over £25,000, bankers have been on a winning streak in the courts. Read more
Meet the new (more mysterious) hybrid capital on the block, says FT Alphaville. It comes courtesy of Dutch agri-lender Rabobank and it differs somewhat to the latest versions of the stuff, in particular Lloyds’ contingent convertibles, or CoCos. Instead of converting into equity in times of crisis, the new securities will be written down by 75 per cent of their face value, with the remaining 25 per cent paid to investors. Read more
Rabobank executives will begin marketing a new form of hybrid bond on Monday amid banks’ moves to devise new forms of contingent capital – hybrids combining elements of both debt and equity – to meet stricter criteria expected from new Basle capital requirements. The Rabobank notes would be like normal bonds until the bank breaches pre-set ratios, at which point the value of the notes would be written down by 75% and the remaining quarter returned to investors. Read more
The wits at the Economist have compiled a list of the world’s best banks, which they preface as follows:
Trying to work out which banks are the world’s best is a bit like awarding the prize for prettiest war-torn village. It is a title that carries little kudos. It is also likely to prompt further shelling. Winners of industry awards in the past three years include Ken Lewis, the chief executive of Bank of America, for banker of the year (2008); Société Générale for its risk management; and Angelo Mozilo of Countrywide, a failed mortgage lender, for a “lifetime of achievement”. Read more
The Rothschild family is selling a 7.5% stake in its investment bank business to Rabobank of the Netherlands, as they team up to advise clients on food and agricultural deals. The deal, which could be the first step towards a closer alliance, comes as food manufacturers are investing more heavily in agribusinesses to secure raw material supplies. The two banks described the link-up as “a co-operation agreement”. But the deal, costing Rabobank less than £100m, would give Rothschild’s clients access to Rabobank’s deeper financial pockets. Akeel Sachak, Rothschild’s head of consumer banking, said the link-up would let his bank take advantage of Rabobank’s close ties with Chinese, Indian and South Korean agricultural producers. Rabobank is acquiring the stake in Rothschild Continuation Holdings, one of several holding companies controlled by the family. Read more
Rabobank on Thursday became the third bank in two weeks to bail out a troubled structured investment vehicle in a further sign of the deteriorating conditions in the financial markets. The Dutch bank plans to take assets worth €5.2bn ($7.6bn) onto its balance sheet in January to prevent a fire sale of Tango Finance. The bank, which manages the SIV with Citigroup, has already sold almost half the vehicle’s assets because it could not find sufficient funding. The SIV was worth €9.7bn in July. Standard Chartered, the emerging markets bank, and HSBC, the UK-listed bank, have also unveiled plans to take SIV assets onto their books. Rabobank holds €34m of the vehicle’s assets and has no legal obligation to bail it out, while Citi, which helped set up the SIV and provides back-office services, had not invested in the vehicle. Read more