Netherlands 162 EuroWeek Financing supranationals and agencies � bn Debt issuance (2005-10) Source: Dealogic (as at April 7, 2010) 2007 2006 2005 2008 2009 2010 0 3 6 9 12 15 public bond issuance Since 2005, BNG’s long-term annual funding requirement has been stable between €13bn and €15bn. Most of the funding is raised through BNG’s 480bn debt issuance programme. BNG also has a A$5bn Kangaroo programme. BNG maintains a benchmark curve in euro and US dollar, and is regularly present in non-benchmark currencies including CHF, GBP, AUD, NZD, NOK and JPY. RATING Aaa, AAA, NR Bank Nederlandse Gemeenten provides financing for public and semi-public Dutch organisations, including municipalities, housing associations and public utilities. It was founded in 1914 in The Hague as the Gemeentelijke Credietbank (Municipal Credit Bureau). Since 1921, BNG has been owned jointly by the Dutch state and local government bodies (municipalities, provinces and one water board). The state holds 50% of BNG’s shares. BNG has a conservative attitude to structured transactions. Minimum size for private placements is around €10m equivalent (eg $10m, ¥1bn). There are no internal or external restrictions on currencies. Risk weighting (basel ii): 20% Guarantee: BNG is not guaranteed, but more than 90% of BNG’s long term assets (Dutch public sector institutions such as municipalities and housing associations) are guaranteed by the Dutch state. oveRview c van eykelenburg Chairman pH verloop Director, Treasury (until June 2010) o labe Director, Treasury (until June 2010) b van dooren Head of funding Issuance by type 2009 Source: BNG Benchmarks (EUR & USD) Other public issues Private placements 66% 22% 12% Outstanding issuance by currency Source: BNG EUR USD GBP CHF JPY Other 2% 50% 9% 30% 5% 4% Total €76bn � bn 0 5 10 15 20 Maturity profile of debt Source: BNG 2010 2015 >2015 2011 2012 2013 2014 Investor base by geography Source: BNG France Germany UK/Ireland Switzerland Benelux Scandinavia Asia ME/Africa Americas Others 20% 13% 3% 8% 5% 3% 12% 18% 10% 8% Source: BNG Central banks Banks Asset managers Agency Insurance/pension funds Others 25% 22% 13% 15% 25% Key officials investoR base by ReGion (2009) pRivate placement policy fundinG pRoGRamme oveRview RisK weiGHtinG / GuaRantee issuance by type 2009 outstandinG issuance by cuRRency matuRity pRofile of debt investoR base by cateGoRy (2009) Bank Nederlandse Gemeenten (BNG)
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Netherlands Bank Nederlandse Gemeenten (BNG)Bank Nederlandse Gemeenten (BNG) 162-163 BNG.indd 162 06/05/2010 13:03. Netherlands Financing supranationals and agencies EuroWeek 163 bn
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Netherlands
162 EuroWeek Financing supranationals and agencies
� bn
Debt issuance (2005-10)
Source: Dealogic (as at April 7, 2010)
2007
2006
2005 20
0820
0920
100
3
6
9
12
15
public bond issuance
Since 2005, BNG’s long-term annual funding requirement has been stable between €13bn and €15bn.
Most of the funding is raised through BNG’s 480bn debt issuance programme. BNG also has a A$5bn Kangaroo programme.
BNG maintains a benchmark curve in euro and US dollar, and is regularly present in non-benchmark currencies including CHF, GBP, AUD, NZD, NOK and JPY.
RATING Aaa, AAA, NR
Bank Nederlandse Gemeenten provides financing for public and semi-public Dutch organisations, including municipalities, housing associations and public utilities. It was founded in 1914 in The Hague as the Gemeentelijke Credietbank (Municipal Credit Bureau).
Since 1921, BNG has been owned jointly by the Dutch state and local government bodies (municipalities, provinces and one water board). The state holds 50% of BNG’s shares.
BNG has a conservative attitude to structured transactions. Minimum size for private placements is around €10m equivalent (eg $10m, ¥1bn). There are no internal or external restrictions on currencies.
Risk weighting (basel ii): 20%
Guarantee: BNG is not guaranteed, but more than 90% of BNG’s long term assets (Dutch public sector institutions such as municipalities and housing associations) are guaranteed by the Dutch state.
oveRview
c van eykelenburgChairman
pH verloop Director, Treasury (until June 2010)
o labeDirector, Treasury (until June 2010)
b van doorenHead of funding
Issuance by type 2009
Source: BNG
Benchmarks (EUR & USD)
Other public issues
Private placements
66%
22%
12%
Outstanding issuance by currency
Source: BNG
EUR
USD
GBP
CHF
JPY
Other
2%
50%
9%
30%
5%4%
Total€76bn
� bn
0
5
10
15
20
Maturity profile of debt
Source: BNG
2010
2015
>2015
2011
2012
2013
2014
Investor base by geography
Source: BNG
France
Germany
UK/Ireland
Switzerland
Benelux
Scandinavia
Asia
ME/Africa
Americas
Others
20%
13%
3%
8%
5%
3%
12%
18%
10%
8%
Investor base by category (2009)
Source: BNG
Central banks
Banks
Asset managersAgency
Insurance/pensionfunds
Others
25%
22%
13%
15%
25%
Key officials
investoR base by ReGion (2009)
pRivate placement policy
fundinG pRoGRamme oveRview
RisK weiGHtinG / GuaRantee
issuance by type 2009outstandinG issuanceby cuRRency matuRity pRofile of debt
investoR base by cateGoRy (2009)
Bank Nederlandse Gemeenten (BNG)
162-163 BNG.indd 162 06/05/2010 13:03
Netherlands
Financing supranationals and agencies EuroWeek 163
� bn
Total assets
* As at June 30 (all other figures for full-year)Source: BNG
2005
2006
2007
2008
2009
*0
20
40
60
80
100
120
total assets
Source: Markit
bp
BNG Asset swap spread4.375% GBP January 2015
-40
-30
-20
-10
0
10
20
30
40
50
60
70
80
19 Fe
b 10
04 Ja
n 10
02 N
ov 0
9
02 Se
p 09
02 Ju
l 09
01 M
ay 0
9
02 M
ar 09
02 Ja
n 09
03 N
ov 0
8
02 Se
p 08
02 Ju
l 08
02 M
ay 0
8
03 M
ar 08
02 Ja
n 08
02 N
ov 07
03 Se
p 07
02 Ju
l 07
02 M
ay 07
02 M
ar 07
02 Ja
n 07
asset swap spRead 4.375% GBP JANUARY 2015
standard & poor’sAAA, stable outlook
strengths• Its 50% ownership by the State of The Netherlands• Leading lender to Dutch public authorities, supporting very strong asset quality• Very strong capital base• Low cost base and good efficiency
weaknesses• Relatively limited diversification of income sources, with high reliance on interest income• Only moderate capital generation due to low lending margins
The stable outlook reflects S&P’s expectation that BNG’s ownership structure and the bank’s implicit support from the Dutch ministry of finance will remain unchanged. The outlook also reflects the expectation that BNG will maintain its strategic focus on the Dutch public sector, robust domestic market position and client franchise, excellent asset quality, and strong capitalisation.A negative rating action could result from a
reassessment of BNG’s public policy role in The Netherlands and the level of support provided by the state. It could also result from a negative rating action on the Dutch government or a weakening of BNG’s stand-alone credit profile.
fitch Ratings
AAA, outlook affirmed at stable (Aug 26, 2009)
BNG’s ratings reflect its relationship with the Dutch public sector, both in its ownership and in its role as a banker to local authorities. The bank’s ratings also take into account the low-risk nature of its activities, its excellent asset quality, good liquidity and strong regulatory capital ratios.
BNG is fully owned by the Dutch public sector (50% by the Dutch central government and 50% by a number of municipal and provincial authorities and a water board). The bank provides loans and related services to Dutch municipal and provincial authorities and other public sector-linked entities, such as housing associations, health care institutions, public utilities and educational and cultural bodies.
Credit risk in the bank’s loan portfolio is extremely low because more than 90% of its exposures are either granted to, or guaranteed by, local or central government entities. The bank has not suffered any loan impairment charges for more than 10 years.
Downside risk to BNG’s ratings would arise from a change in its public sector ownership or role as banker to local authorities. In addition, negative pressure on BNG’s individual rating would arise in the event of a material deterioration in the level and/or quality of its capitalisation, if the bank were to incur significant impairments – particularly in its portfolio of mortgage-backed securities – or if it were to become dependent on short-term funding.
Key Recent RatinG aGency commentaRy
Outstanding loan distribution
Source: BNG (Feb 2010)
Municipalities
Housing associations
Healthcare sector
Public utilities
Mortgage funds
Others
40%
7%
50%
3%2%
2%
Total€75bn
outstandinG loan distRibution
pricing date: March 22, 2010value: €1bnmaturity date: March 30, 2017offer price: 99.584coupon: 3%spread to swaps: 21bpbookrunners: Barclays Capital, BNP Paribas, Credit Agricole, HSBC
pricing date: February 22, 2010value: $1bnmaturity date: March 1, 2013offer price: 99.692coupon: 1.875%spread to benchmark: 49.7bp over USTsbookrunners: Credit Suisse, JPMorgan, RBS
pricing date: January 7, 2010value: €1.75bnmaturity date: January 14, 2020offer price: 99.362coupon: 3.75%spread to swaps: 30bpbookrunners: BNP Paribas, Citi, JPMorgan, UBSSource: Dealogic