N.V. Bank Nederlandse Gemeenten June 2018 Disclaimer THE SLIDES - - PowerPoint PPT Presentation

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N.V. Bank Nederlandse Gemeenten June 2018 Disclaimer THE SLIDES - - PowerPoint PPT Presentation

N.V. Bank Nederlandse Gemeenten June 2018 Disclaimer THE SLIDES USED IN THIS PRESENTATION ARE STRICTLY CONFIDENTIAL AND HAVE BEEN PREPARED EXCLUSIVELY TO SUPPORT RELATED ORAL DISCUSSIONS. THE INFORMATION CONTAINED IN THIS PRESENTATION IS BEING


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N.V. Bank Nederlandse Gemeenten

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June 2018

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Disclaimer

THE SLIDES USED IN THIS PRESENTATION ARE STRICTLY CONFIDENTIAL AND HAVE BEEN PREPARED EXCLUSIVELY TO SUPPORT RELATED ORAL DISCUSSIONS. THE INFORMATION CONTAINED IN THIS PRESENTATION IS BEING FURNISHED TO YOU SOLELY FOR YOUR INFORMATION AND MAY NOT BE REPRODUCED OR REDISTRIBUTED TO ANY OTHER PERSON. This presentation is based on information provided by N.V. Bank Nederlandse Gemeenten (the “Company”) and other publicly available information as indicated herein. The information contained in this presentation does not constitute or form part of any offer for sale or subscription of or solicitation or invitation of any offer to buy or subscribe for any securities in the United States or any

  • ther jurisdiction nor shall it or any part of it form the basis of or be relied on in connection with any contract or commitment whatsoever. Any decision to invest in or acquire securities of the

Company must be based wholly on the information contained in an offering document or prospectus (the “Offering Document”) issued or to be issued by the Company in connection with any such

  • ffer and not on the contents hereof and this presentation should not be considered as a recommendation by the Company that any recipient of this presentation should subscribe for or purchase

any Securities in any jurisdiction in which such offer, sale or invitation is not authorized or to any person to whom it is unlawful to make such an offer, sale or invitation. This presentation does not contain all relevant information relating to the Company or its securities, particularly with respect to the risks and special considerations involved with an investment in the securities of the Company, and is qualified in its entirety by reference to the detailed information which will appear in the Offering Document. No securities of the Company have been or will be registered under the US Securities Act of 1933, as amended (the “Securities Act”). Accordingly, any securities of the Company will only be issued in the United States pursuant to an exemption from or in a transaction not subject to the registration requirements of the Securities Act. This presentation contains “forward-looking statements” (as defined in the U.S. Private Securities Litigation Reform Act of 1995) regarding the intent, belief or current expectations of the Company's management with respect to its financial condition and future results of operations. You can identify forward-looking statements by discussions of strategy, plans or intentions. These statements reflect the Company's current views with respect to future events and by their nature are subject to risks, uncertainties and assumptions because they relate to events and depend on circumstances that may or may not occur in the future. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, the actual results of the Company may vary materially from those expressed in or implied by the forward-looking statements contained or deemed to be contained herein. Given these risks and uncertainties, you are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date of this presentation. For a discussion of some of the important factors that could cause the Company’s results to differ from those expressed in or implied by the forward-looking statements contained herein, please refer to the Offering Document that will be delivered in connection with any securities offering. The Company disclaims any obligation to update, or to announce publicly any revision to, any of the forward-looking statements contained in this presentation.

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June 2018

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Table of Content

  • Macro Economic Data

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  • Key Facts

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  • Developments in Rules and Regulations

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  • Dutch Public Sector

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  • Market Share and Financial Data

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  • Short Term Funding

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  • Funding Strategy

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  • Sustainability

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  • Summary

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  • Contact Information

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  • Appendices

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Macro Economic Data

Netherlands 2018(f) 2017 2016 GDP Growth 3.2 3.1 2.2 Consumer Prices 1.5 1.3 0.1 Unemployment 3.8 4.9 6.0 Current Account 8.6 8.8 8.7 Fiscal Balance 0.9 0.6 0.4 Government Debt 52.8 56.6 61.8

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  • Founded by (local) government in 1914
  • Dutch Government owned
  • Dutch State 50% (since 1921)
  • Dutch local governments 50%
  • Ownership restricted to Dutch public authorities (art. 6 Articles of Association)
  • Registered shares only (not listed)
  • Dutch Promotional Bank
  • Lending restricted to local authorities and public sector institutions in the

Netherlands and the E.U. (art. 2.3 Articles of Association)

  • Mission: to minimize the cost of Dutch local authorities and public sector institutions
  • BNG Bank’s ratings: Aaa (stable) / AAA (stable) / AA+ (stable)

Key Facts

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  • High Quality Liquid Assets (“HQLA”) eligibility for the Liquidity Coverage Ratio (“LCR”)

▪ European Union: level 1, European Commission “Delegated Act of 10.10.2014” : Article 10 (1e ii) ▪ Switzerland: level 2a (confirmed: all currencies) ▪ US: level 2A Liquid Assets (guidelines are subject to individual investor interpretation) Federal Register/Vol. 79, No 197/Friday, October 10, 2014/Rules and Regulations

  • BNG Bank Euro-denominated bonds eligible under ECB Public Sector Purchase Programme (“PSPP”)
  • Dutch Central Bank has designated BNG as a bank of national systemic importance

Developments in Rules and Regulations

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Municipalities

  • credit quality: similar to the State of the Netherlands
  • Municipal Act / Financial Relationship Act
  • 0% BIS risk-weighted by Dutch Central Bank

Housing Associations

  • social housing: subsidizing rent
  • guarantee fund “WSW”: rated Aaa(stable)/AAA(stable)
  • back stop by the State of the Netherlands:

irrevocable/irreversible/unlimited

  • 0% BIS risk-weighted by Dutch Central Bank

Health Care institutions

  • hospitals, elderly homes
  • guarantee fund “WFZ”: rated AAA(stable) by S&P
  • back stop by the State of the Netherlands:

irrevocable/irreversible/unlimited

  • 0% BIS risk-weighted by Dutch Central Bank

Others

  • public utilities, network companies, waste management
  • education sector (universities/colleges),
  • Energy Transition Financing Facility (ETFF)

BNG Long Term Assets: Eur 80.1 bn

(December 2017)

Dutch Public Sector

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Financial Data BNG Bank’s Market Share

(of total outstanding loans to Dutch public sector)

2017 2016 2015 Municipalities 67% 67% 66% Housing Associations 54% 54% 54% Health Care 48% 48% 47% Public Utilities 8% 8% 8% Others 27% 27% 27% 2017 2016 2015 2014 Total Assets (EUR bn) 140.0 154.0 149.5 153.5 Leverage Ratio 3.7% 3.3% 2.9% 2.0% TIER 1 Ratio 36.6% 31.9% 26.7% 23.6% Profit (EUR mn)

  • Profit (before tax)

535 503 314 179

  • Net Profit (after tax)

393 369 226 126 Net Interest Margin 0.31% 0.26% 0.30% 0.29% Cost to Income Ratio 11.3% 11.3% 13.4% 23.0% Return on Equity 10.8% 11.5% 7.3% 4.3% Dividend Pay Out Ratio 37.5% 25.0% 25.0% 25.0%

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Short Term Funding

  • Objective: managing BNG’s short term liquidity
  • Financing instruments:
  • 1. Euro Commercial Paper program EUR 20bn, in all major currencies
  • ratings A-1+/P-1/F1+
  • dealers BoAML, Barclays, Citi, RBS, UBS
  • minimum ticket size EUR 10mn equivalent
  • 2. US Commercial Paper program USD 15bn
  • ratings A-1+/P-1
  • dealers Barclays, Goldman, JPMorgan
  • minimum ticket size USD 10mn
  • 3. Deposits from 1 to 12 months, in all major currencies
  • minimum size EUR 10mn equivalent
  • Investor base:
  • central banks, money market funds, corporates, pension funds
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Funding Strategy

  • Long term funding requirement
  • 2018 (f): EUR 18bn
  • Strategic funding
  • maintenance of a benchmark yield curve in EUR and USD
  • regular issuance of liquid transactions (size >1bn)
  • Sustainability Bonds for Dutch Municipalities and for Dutch Housing Associations
  • Following the ICMA Sustainability Bond Guidelines and UN Sustainable Development Goals
  • Public deals
  • Regular presence in public markets
  • AUD, CAD, CHF

, GBP , JPY, NOK, NZD and SEK

  • Private placements
  • MTN format and Loan format
  • Plain vanilla
  • Callable structures
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BNG Sustainability

  • Sustainability is an integral part of BNG’s strategy
  • BNG Bank awarded a C ‘prime’ sustainability rating by Oekom research AG (2016)
  • The BNG Sustainability Bonds criteria are defined in the ‘Framework for Best-in-Class Municipality

Investment’ and in the ‘Framework for Dutch Housing Associations’

  • Based on the methodology developed by an independent party:

Sustainability Centre of Tilburg University (TSC-Telos)

  • Sustainalytics has provided third party review for both frameworks
  • The proceeds of the sustainability bonds are earmarked and allocated to lending to sustainable

municipalities and sustainable social housing associations.

  • The data used for the annual impact reporting by TSC-Telos comes from official public sources
  • Listed on the Luxembourg Green Exchange
  • Sustainabilty Bonds linked to Dutch Municipalities
  • 2014: EUR

500,000,000 0.375% due October 2019

  • 2015: EUR

650,000,000 0.125% due November 2020

  • 2016: USD

600,000,000 1.625% due November 2019

  • 2017: EUR

750,000,000 0.200% due November 2024

  • Sustainabilty Bonds linked to Dutch Housing Associations
  • 2016: EUR

1,000,000,000 0.050% due July 2024

  • 2017: USD

750,000,000 2.125% due December 2020

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Summary

  • Dutch Promotional Bank
  • Aaa (stable) / AAA (stable) / AA+ (stable)
  • 100% Dutch Government owned
  • Standard & Poor’s (22 December 2017)
  • “Leading lender to Dutch public authorities, supporting

very strong asset quality”

  • “Sound capitalization“
  • “Almost certain likelihood of extraordinary government

support”

  • Moody’s (21 December 2017)
  • “Largest lender to the Dutch public sector,

fully owned by Dutch public entities”

  • “High asset quality”
  • “Very high probability of government support, resulting

in two-notch uplift for debt and deposit ratings”

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Capital Markets Money Markets

  • Public Issuance
  • Commercial Paper
  • Investor Relations
  • Short Term Deposits

Bloomberg Dealing: BNGM

  • Tel. : +31 70 3081 730
  • Tel. : +31 70 3081 760

Email: capital.markets@bngbank.nl Email: moneymarkets@bngbank.nl

www.bngbank.com

Contact Information

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June 2018

14 EUR 1,500,000,000 1.875% 2014 due January 2021 EUR 1,750,000,000 0.375% 2015 due January 2022 EUR 2,050,000,000 0.500% 2015 due August 2022 EUR 2,100,000,000 0.250% 2016 due February 2023 EUR 1,000,000,000 2.250% 2013 due July 2023 EUR 1,350,000,000 0.250% 2017 due January 2024 EUR 1,250,000,000 0.250% 2016 due June 2024 EUR 1,000,000,000 0.050% 2016 due July 2024 - Social Bond EUR 1,500,000,000 0.250% 2015 due May 2025 EUR 2,000,000,000 1.000% 2016 due January 2026 EUR 1,750,000,000 0.625% 2017 due June 2027 EUR 500,000,000 0.750% 2018 due January 2028 EUR 1,100,000,000 1.375% 2015 due October 2030 EUR 500,000,000 0.875% 2016 due October 2036 EUR 650,000,000 1.500% 2017 due March 2038 144a USD 1,250,000,000 1.375% 2016 due January 2019 USD 2,250,000,000 1.500% 2017 due February 2019 USD 1,500,000,000 1.875% 2014 due June 2019 USD 2,000,000,000 1.750% 2017 due October 2019 USD 2,500,000,000 2.500% 2018 due February 2020 USD 2,000,000,000 1.750% 2015 due March 2020 USD 2,250,000,000 1.750% 2017 due October 2020 USD 1,500,000,000 2.500% 2018 due February 2021 USD 1,500,000,000 2.625% 2014 due April 2021 USD 1,500,000,000 1.625% 2016 due April 2021 USD 1,750,000,000 2.375% 2017 due February 2022 USD 1,500,000,000 2.500% 2013 due January 2023 USD 1,000,000,000 2.375% 2016 due March 2026

Appendix 1

Benchmark Curves

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Appendix 2

AUD issuance

Kangaroo program AUD 10 bn Kangaroos AUD 175 mn 3.50% 2014 due Sep 2019 AUD 360 mn 5.50% 2012 due May 2022 AUD 450 mn 4.75% 2013 due Mar 2023 AUD 1,000 mn 5.25% 2013 due May 2024 AUD 965 mn 3.25% 2015 due July 2025 AUD 50 mn 5.00% 2014 due Apr 2026 AUD 350 mn 3.25% 2016 due Aug 2026 AUD 690 mn 3.50% 2017 due July 2027 AUD 1,035 mn 3.30% 2018 due July 2028 Goals

  • issuances of new Kangaroos: Fixed or FRN
  • increase of outstanding Kangaroos
  • mix of domestic / off shore investor
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June 2018

16 2017 2016 2015 2014 2013 Amount (Eur bn) 17.2 18.1 15.8 14.7 14.9

  • EUR

36.2% 45.1% 40.7% 37.4% 45.0%

  • USD

53.9% 46.5% 48.4% 43.9% 45.8%

  • GBP

6.9% 5.7% 5.5% 8.2% 1.7%

  • JPY

0.0% 0.2% 0.0% 0.1% 0.2%

  • CHF

0.0% 0.0% 0.0% 2.1% 0.7%

  • AUD / NZD / CAD / HKD

2.7% 1.8% 4.6% 7.8% 5.3%

  • NOK / SEK

0.3% 0.3% 0.4% 0.4% 0.9%

  • Others

0.0% 0.4% 0.4% 0.1% 0.4% Number of transactions 65 57 71 78 90 Weighted average maturity (yrs) 5.6 6.3 5.7 5.4 6.5 Distribution:

  • Europe / ME / Africa

50% 63% 64% 61% 60%

  • Asia / Australia / New Zealand

20% 23% 19% 19% 22%

  • Americas

30% 14% 17% 20% 18%

  • Central Banks / Official Institutions

43% 42% 39% 30% 28%

  • Asset Managers

22% 22% 24% 21% 21%

  • Insurance / Pension Funds

7% 12% 9% 11% 14%

  • Banks / Bank Treasuries / Corporates / Other

28% 24% 28% 38% 37%

Appendix 3

Overview Funding 2017 - 2013