Despite the eurozone crisis, ABN AMRO has succeeded in raising half a billion euros in additional capital through the sale of uncovered bonds. This means that the bank is borrowing EUR 500 million from investors without pledging any collateral. In the present turbulent market, the success of this bond sale is a strong sign of the bank's creditworthiness.
The bonds have a term to maturity of two years. ABN AMRO is paying investors a premium of 1.3% over and above Euribor – the variable interest rate at which many European banks lend money to each other in euros. According to a spokesperson for the bank, paying a premium of just 1.3% is an exceptional achievement in the current market.
ABN AMRO does not need the EUR 500 million raised by the bond issue in the short term, because the financing for 2012 is virtually in place already. However, the issue fits in perfectly with the bank’s long-term funding strategy, which is aimed at securing a solid financial basis for the longer term and keeping the door open to the capital markets. As part of this strategy, the bank believes it is important to grasp opportunities as and when they arise. In this case, the road to the capital market was opened up by Deutsche Bank, which last Thursday successfully completed a bond issue to the tune of EUR 1.5 billion.