Corporate Bond Issuance in EuroclearInternational Securities Services

Philippe Laurensy, EuroclearEuroclear Collateral ConferenceMay 2014

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Agenda

Corporate Bond Issuance Evolution

Euroclear as Issuer CSD

Issuance overview through Euroclear

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Corporate Bond Issuance Evolution

Financing Options

Advantages

Disadvantages

Raise Equity

• Performance driven profit sharing

• No fixed costs• Small cap markets

• Competitive pricing• Corporate governance

Bank Financing

• Flexible borrowing• Well established market • Acknowledged expertise• Predictable cash flow

• Banks deleveraging • Rates set by lender• Reduced lending

appetite due to increased capital costs

• Syndicated loans less liquid

Capital Markets

• Sophisticated and more liquid market

• Robust Investor base• Predictable cash flow• Tax effectiveness• No influence on

corporate governance

• Increased regulation• Limited access for

small/lower rated issuers

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Growth of International Corporate Bonds2008-2013

Source:Source: Dealogic Nov 2013. Outstanding volumes in EUR equivalent millions

International debt (Dealogic definition): where the borrower is an off-shore entity or if the security is governed by the rules of more than one market or when the security is a cross-border instrument

Bond Issuance Globally Bond Issuance with Euroclear Group

13%24% 18% 18%

28% 34%

76% 53% 61% 58%48% 43%

9%

14% 11% 16% 15% 13%

2% 9% 10% 8% 9% 10%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2008 2009 2010 2011 2012 2013

15%24% 24% 25%

34% 37%

60% 43% 41% 40%34% 35%

22%24% 27% 26% 22% 17%

3% 9% 8% 9% 10% 11%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2008 2009 2010 2011 2012 2013

Sovereign

Public financialinstitutions

Banks & Financialinstitutions

Corporate

Corporate Bond IssuanceCorporate entities will continue to be the main drivers of economic growth in the medium and long term

What do you need ?

• Lowest possible cost of funding

• Secure funding

• Large scope of instruments

• Low cost to market

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Corporate Bond Issuance

• Financial markets bring together:► Issuers seeking funding to meet their business targets► Investors seeking investment returns with well established cash flows

• Business growth results in:►Expansion from domestic to international market focus► Increasing multi-currency funding needs►The search for a broader investor base

• International bond markets facilitate cross border participation and trading flexibility for market participants, globally

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Euroclear as Issuer CSD

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ST008

>99%European domestic

debt coverage

2013 data

Euroclear Group Today

>900,000Securities covered

>€24 trillionAssets in custody

53Settlementcurrencies

>€700 billion

Collateral Highwaytransactions daily

>2000Institutional clients from 90 countries

AA+Rating by S&P andFitch for the past

10 years

>1 millionTransactions settled

per day

>€570 trillionTransactions settled

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We serve clients in their own language across all time zones

Euroclear Around the World…

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Issuance Overview through Euroclear

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Why International Securities ?Benefits

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Corporate issuers Your investors

• Lowest cost of funding • Large customer base and direct

access to the buy side• Robust and well accepted

procedures for all asset classes, including multi-listing, multi-currency, multi-governing laws

• Simultaneous offering to worldwide global investors

• Single point of contact / relationshipfor the issuer for ease of information and process flows

• Full asset servicing for coupon payments, tax certifications, legal certifications, corporate events, etc

• Full asset optimisation to leverage triparty and banking services

• Single point of entry to global range of trading partners

• Internationally recognised asset protection

Low cost to market

Local Worldwide

• Limited to local jurisdiction and governing laws

• Limited currencies or swaps required• Multiple agents required for

issuance and asset servicing • Limited investor base

• One standard for multi legal jurisdiction and framework

• Raise funds in the currency of your choice

• Single agent point of contact through lifetime of security

• International investor access

Why Euroclear?

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We help you move from a local to a worldwide issuance and investor base target

How to Issue International Securities ?

• Involve Euroclear when discussing your new issues with your legal counsel and arrangers

• Let us know what is important to you:►Worldwide distribution►Multi-currency options►Business intelligence

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We will assist you in finding the optimal structure for your needs

Issuance regulations we handle

• Sec Reg• Reg S / 144A • 144A 3c7• REG D

International SecuritiesA wide range of financial instruments

Fixed Income (in Nominal):• Medium Term Notes (MTNs)• (Euro) Bonds• (Euro) Commercial Paper• (Euro) Certificates of Deposit• Notes• Convertible• Collateralised Debt Obligations • Collateralised Mortgage Obligations• Asset Backed Securities• Mortgage Backed Securities• Global Depositaries Notes• Reverse Convertible Bonds• Equity Linked Notes• Risk Linked Notes• Treasury Bills• Debentures• Extendable Bonds• Sukuks (Islamic Financing)

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