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22.02.07

RZB issued 500 million euros of subordinated capital.

Lower Tier 2 Bond sold within hours. Order book oversubscribed twicewith Citigroup, Morgan Stanley and RZB lead managing the transaction.

Raiffeisen Zentralbank Osterreich AG (RZB) has issued 500 million eurosof subordinated capital in the form of a fixed rate bond with a tenor oftwelve years, first callable after seven years. The 12NC7 fixed tofloating structure which was the first public bank capital transaction by an Austrian financial institution in 2007 and the first Lower Tier 2 bond to enter the iboxx index series of Deutsche Boerse was overwhelmingly well received by investors. The bond was priced at Mid-Swaps plus37 basis points while bearing a coupon of 4.5 per cent p.a. for the first seven years and then switching into a floating rate coupon. It is rated A2 by Moodys and A by S&P, whereas the issuers senior rating is A1 (Moodys) and A+ (S&P).

"The transaction is the second outstanding success for RZB as a topissuer within weeks," said RZBs CEO Walter Rothensteiner, referring to RZBs recently launched Sterling bond."Whats more, RZB achieved benchmark size without an investor roadshow."

"RZBs well-balanced growth strategy has made it one of the 100 largest banks worldwide," added Patrick Butler, RZB-Board Member responsible forTreasury and Investment Banking."It is no surprise that this relativevalue story attracts many of the top 100 investors worldwide."

The transaction was oversubscribed in three hours with investor demandamounting to well over 1 billion euros. It is RZBs second major international issue in the last month. In the course of those transactions RZB increased and diversified its investor base and saw its strategy endorsed by some of the most discerning debt market participants in the world.

With more than 50 investors participating, the transaction achieved avery well diversified regional distribution with demand from non-bankinvestors at a very high level. The lions share of the bond was placed in the UK followed by France and Germany. The pricing at Mid-Swaps +37bp is tight, but RZB transactions tend to tighten further in the secondary market.

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Raiffeisen Zentralbank Osterreich AG (RZB) is the central institution ofthe Austrian Raiffeisen Banking Group, the country''s largest bankinggroup. It is a leading corporate and investment bank in Austria and alsoconsiders Central and Eastern Europe (CEE) as its home market. Vialisted subsidiary Raiffeisen International Bank-Holding AG, it operatesone of the leading banking networks in CEE with subsidiary banks andfinance leasing companies in 16 markets. More than 11.7 millioncustomers are attended to through more than 2,775 business outlets.Representative offices in Lithuania and Moldova complement the group''spresence in the region.

RZB is the only Austrian bank with a global network of business unitsreaching all important finance centres around the globe. It is alsowidely present in Asia via its branches and representative offices.

For further information please contact Michael Palzer (+43-1-71707-1504, michael.palzer@rzb.at) or Wilfried St?ckl (+43-1-71 707-1959,wilfried.stoeckl@rzb.at).

http://www.rzb.at, http://www.ri.co.at

 

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