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Inaugural EUR 300 million non-preferred senior transaction

News Release -

Today, NIBC launched its inaugural non-preferred senior transaction with a EUR 300 million deal size. The bond has a fixed rate coupon of 2.00% and a maturity of 5 years. The order book was made up of more than 200 investors and was 6 times oversubscribed. The high oversubscription allowed NIBC to tighten its issuance spread by 50bps to a final pricing of MS+200bps. Interest for the trade was widespread across Europe with investors from Germany, France and Southern Europe being the largest contributors.

In recent years regulators have introduced additional capital requirements for banks, which also included the introduction of a new class of senior debt, so called non-preferred senior debt. This instrument ranks between subordinated debt (Tier 2) and regular senior unsecured debt (i.e. preferred senior debt). Next to banking supervisors, rating agencies also value the issuance of non-preferred senior bonds by banks. In the case of NIBC, S&P changed the outlook for NIBC Bank from ‘stable’ to ‘positive’, amongst other things, on the expectation that NIBC would issue non-preferred senior debt.

Herman Dijkhuizen, CFO:
“We are very pleased with the success of this non-preferred senior transaction. Although NIBC does not yet have a binding MREL target, we are confident that with this EUR 300 million transaction we have taken a big step towards our expected MREL requirement. In addition, this deal is also ALAC-eligible and could be beneficial for our rating with S&P.”

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