Rabobank Raises €750mn via PerpNC7.66 at 3.1%

Dutch lender Rabobank raised €750mn via Perpetual non-call 7.66Y Additional Tier 1 (AT1) bonds at a yield of 3.1%, 323.4bp over Mid Swaps and 40bp inside initial guidance of 3.5% area. The AT1s are expected to be rated Baa3/BBB vs. Rabobank’s rating of Aa3/A+/A+. If not called on December 29, 2028, the coupon on the perps will reset every 5Y at Mid Swaps plus the initial spread of 323.4bp with no step-up. The AT1s’ trigger event is Rabobank Group’s CET1 Ratio falling below 7% and/or the issuer Cooperatieve Rabobank UA’s CET1 Ratio falls below 5.125%. The new AT1s were priced 70bp over its older EUR 4.375% perps callable in June 2027 that are currently yielding 2.4% (YTC) to account for the lower reset compared to the older perps that reset to 5Y Mid Swaps plus a spread of 467.9bp if not called. The AT1s received orders of €1.75bn, 2.3x the issue size.