Glossario
Rembrandt bond
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Rembrandt bond is a type of foreign bond issued in the domestic market of the Netherlands by a foreign entity in euros (EUR). The name comes from the name of Rembrandt Harmensz van Rijn, who is one of the greatest Dutch painters.
The concept of Rembrandt bonds is quite similar to other types of foreign bonds, such as: Kangaroo Bond, Yankee Bond, Panda Bond, Samurai Bond, but they have differences in features of state regulation and market territory.
The main characteristics of the Rembrandt bond are as follows:
1. The Issuer is not a resident of the Netherlands.
2. The currency of the issue is always the euro (EUR), before the introduction of the euro, placements were always made in guilders.
3. The organizer of such issues are banks or a group of banks registered in the territory of the Netherlands.
4. It can be freely purchased by non-residents of the countries where the placement takes place.
5. Usually issued for a long time
it is more expedient to separate advantages, as well as disadvantages for the investor and for the issuer.
Benefits for the investor:
1. High liquidity.
2. Leveling of currency risks (if the investor is from abroad).
3. Stability and high level of development of the Dutch securities market.
4. Higher yield compared to domestic corporate bonds.
Disadvantages for the investor:
1. Higher risks of securities depreciation.
2. Formal restrictions on the purchase and sale (nominal value, increased requirements for the investor).
Benefits for the issuer:
1. High liquidity.
2. Leveling the currency risks of the issuing country.
3. Increased demand for the tool.
Disadvantages for the issuer:
1. Higher investor payouts compared to domestic debt securities in the home market.
2. Increased risk of default if the issuer’s currency is volatile.
3. Fewer choices of possible organizers of placements.
4. Longer issuance procedure, as well as less flexible placement options.
Examples:
Natwest Markets plc, 5% 20oct2020, EUR RBS, 6.50% 30sep2017, EUR
The concept of Rembrandt bonds is quite similar to other types of foreign bonds, such as: Kangaroo Bond, Yankee Bond, Panda Bond, Samurai Bond, but they have differences in features of state regulation and market territory.
The main characteristics of the Rembrandt bond are as follows:
1. The Issuer is not a resident of the Netherlands.
2. The currency of the issue is always the euro (EUR), before the introduction of the euro, placements were always made in guilders.
3. The organizer of such issues are banks or a group of banks registered in the territory of the Netherlands.
4. It can be freely purchased by non-residents of the countries where the placement takes place.
5. Usually issued for a long time
it is more expedient to separate advantages, as well as disadvantages for the investor and for the issuer.
Benefits for the investor:
1. High liquidity.
2. Leveling of currency risks (if the investor is from abroad).
3. Stability and high level of development of the Dutch securities market.
4. Higher yield compared to domestic corporate bonds.
Disadvantages for the investor:
1. Higher risks of securities depreciation.
2. Formal restrictions on the purchase and sale (nominal value, increased requirements for the investor).
Benefits for the issuer:
1. High liquidity.
2. Leveling the currency risks of the issuing country.
3. Increased demand for the tool.
Disadvantages for the issuer:
1. Higher investor payouts compared to domestic debt securities in the home market.
2. Increased risk of default if the issuer’s currency is volatile.
3. Fewer choices of possible organizers of placements.
4. Longer issuance procedure, as well as less flexible placement options.
Examples:
Natwest Markets plc, 5% 20oct2020, EUR RBS, 6.50% 30sep2017, EUR
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