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

most Recent syndicated deals

pos. bookrunner parents

deal value $ (proceeds) (m)

no. %share

1 RBC Capital Markets

2,887 25 13.0

2 Barclays Capital 2,185 10 9.8

3 BNP Paribas 1,781 5 8.0

4 JPMorgan 1,708 4 7.7

5 UBS 1,533 7 6.9

6 RBS 1,453 9 6.5

7 Bank of America Merrill Lynch

1,450 6 6.5

8 Credit Suisse 1,431 6 6.4

9 Deutsche Bank 1,390 11 6.3

10 Citi 1,359 4 6.1subtotal 17,177 64 77.2total 22,240 83 100.0

Source: Dealogic

top booKRunneRs apRil 2009 – maRcH 2010

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