Rabobank Nederland has announced that on 30 December 2011 it will proceed to switch 25% of the initial nominal amount of €100 (i.e. €25) per Rabo Extra Ledenobligatie in one Rabobank 'members' certificate. Due to the switch the number of outstanding 'members' certificates will increase by €9m to €268m (+3.46%).
The Rabo Extra Ledenobligaties were initially launched in October 2009 and pay a fixed coupon of 3.5% pa. At the end of each year Rabobank has the right to either switch 25% of the nominal value to one Rabobank 'members' certificate - a subordinated perpetual certificate with a nominal value of €15 which offers an annual variable dividend calculated as the return on the most recent 10-year Dutch government bond, plus 1.5%, which can be called from 29 September 2035 onwards - or return 25% of the nominal value to the investor, but only if the level of the Rabobank 'members' certificates on all three trading days preceding the annual switch date is equal to or above €24. Otherwise the issuer cannot exercise its right to switch and will return 25% of the nominal value to the investor.
Rabobank, which recently saw its credit rating downgraded by S&P to AA, has a market share of 42% in The Netherlands. The bank had seven products (worth €715m) that struck this year, including the Credit Suisse Eurostoxx50 Note December 2018, which was issued in collaboration with Credit Suisse International and is open for subscriptions until 23 December 2011.
These products are available in the Dutch database.