Clifford Chance

Clifford Chance congratulates Rabobank on its highly successful debut issue of non-preferred senior notes

Rabobank issued the first-ever Non-Preferred Senior (NPS) bond from The Netherlands (pricing took place on 22 August and settlement on 29 August). The benchmark issue drew in one of the largest books for a euro financial deal year-to-date, successfully establishing this new asset class in the Netherlands.

Rabobank issued the EUR 1 billion non-preferred senior debt under its EUR 160 billion global medium term note (GMTN) programme in order to meet its minimum requirement for own funds and eligible liabilities (MREL).

The five-year Non-Preferred Senior notes will rank junior to preferred senior notes and senior to subordinated notes. However, the Dutch law enabling statutory qualification as non-preferred senior obligations for MREL has not been enacted yet. Therefore, the debt will initially rank equally with other senior unsecured instruments but will automatically become non-preferred senior debt once the relevant Dutch legislation is in place (expected ultimately by year-end 2018).

A Clifford Chance team led by Jurgen van der Meer and comprising Hugo van der Molen and Bauke de Vries acted for Rabobank as issuer counsel in drafting and structuring the Non-Preferred Senior bond terms and conditions for inclusion in the GMTN Programme.