Rabobank Nederland - Robeco.com

Offering Circular 

Rabobank Nederland 

Coöperatieve Centrale Raiffeisen-Boerenleenbank B.A. 

(a coöperatie formed under the law of the Netherlands with its statutory seat in Amsterdam) 

Coöperatieve Centrale Raiffeisen-Boerenleenbank B.A. (Rabobank Nederland) Australia Branch 

(Australian Business Number 70 003 917 655) 


Coöperatieve Centrale Raiffeisen-Boerenleenbank B.A. (Rabobank Nederland) Singapore Branch 

(Singapore Company Registration Number F03634W) 


Euro 80,000,000,000 

Global Medium-Term Note Programme 

Due from seven days to perpetuity 

Under the Global Medium-Term Note Programme described in this Offering Circular (the ‘Programme’), Coöperatieve Centrale Raiffeisen- 

Boerenleenbank B.A. (Rabobank Nederland) (‘Rabobank Nederland’, the ‘Bank’ or the ‘Issuer’), may through its head office or through its branches 

listed above, subject to compliance with all relevant laws, regulations and directives, from time to time issue Global Medium-Term Notes (the ‘Notes’). 

References herein to the ‘Issuer’ shall mean Rabobank Nederland, whether issuing Notes through its head office or through its branches listed above. 

The branches through which Rabobank Nederland may issue Notes are Coöperatieve Centrale Raiffeisen-Boerenleenbank B.A. (Rabobank 

Nederland) Australia Branch (‘Rabobank Australia Branch’) and Coöperatieve Centrale Raiffeisen-Boerenleenbank B.A. (Rabobank Nederland) 

Singapore Branch (‘Rabobank Singapore Branch’). The aggregate nominal amount of Notes outstanding will not at any time exceed Euro 

80,000,000,000 (or the equivalent in other currencies). The Programme is, and Notes issued under it may be, denominated in ‘euro’, which means 

the lawful currency of the member states of the European Union that have adopted the single currency in accordance with the Treaty establishing the 

European Community (signed in Rome on March 25, 1957), as amended by the Treaty on European Union (signed in Maastricht on February 7, 1992). 

This Offering Circular is a base prospectus for the purposes of Article 5.4 of Directive 2003/71/EC (the ‘Prospectus Directive’) and the Dutch 

Act on the Supervision of the Securities Trade 1995 (Wet toezicht effectenverkeer 1995) (the ‘Dutch Securities Act’) and regulations thereunder 

(together ‘Dutch securities laws’) and has been approved by the Netherlands Authority for the Financial Markets (Autoriteit Financiële Markten or 

‘AFM’), in its capacity as competent authority under Dutch securities laws, in accordance with the provisions of the Prospectus Directive and Dutch 

securities laws on May 31, 2006. Application will be made for Notes issued under the Programme within 12 months of this Offering Circular to be 

admitted to trading on Eurolist by Euronext Amsterdam N.V. (‘Euronext Amsterdam’) and on the ‘Bourse de Luxembourg’ of the Luxembourg Stock 

Exchange (the ‘Luxembourg Stock Exchange’). Euronext Amsterdam and the Luxembourg Stock Exchange are regulated markets for the purposes 

of Directive 93/22/EC (the ‘Investment Services Directive’). References in this Offering Circular to Notes being ‘listed’ (and all related references) shall 

mean that such Notes have been admitted to trading on a regulated market. Notes may also be listed on another stock exchange and unlisted Notes 

may also be issued under the Programme. The relevant final terms to this Offering Circular (the ‘Final Terms’) in respect of the issue of any Notes will 

specify whether such Notes will be listed on Euronext Amsterdam or the Luxembourg Stock Exchange (or any other stock exchange) or whether the 

Notes will not be listed. In relation to each separate issue of Notes, the price and amount of such Notes will be determined by the Issuer and the 

relevant Dealers in accordance with prevailing market conditions at the time of the issue of the Notes and will be set out in the applicable Final Terms. 

The Notes of each Tranche (as defined herein) in bearer form will initially be represented by a temporary global note in bearer form, without 

interest coupons (each a ‘temporary Global Note’). Notes in registered form will be represented by registered certificates (each a ‘Certificate’), one 

Certificate being issued in respect of each Noteholder’s entire holding of Registered Notes (as defined below) of one Series and may be represented 

by a Global Certificate (as defined below). Global Notes (as defined below) and Certificates may, and temporary Global Notes will, be deposited on 

the issue date either with (a) a common depositary for Euroclear Bank S.A./N.V., as operator of the Euroclear System (‘Euroclear’) and Clearstream 

Banking, société anonyme (‘Clearstream, Luxembourg’) or (b) such other clearing system as agreed between the Issuer and the relevant Dealer. 

Interests in temporary Global Notes will be exchangeable for interests in permanent global notes (each a ‘permanent Global Note’ and, together with 

the temporary Global Notes, the ‘Global Notes’), or if so stated in the relevant Final Terms, definitive Notes (‘Definitive Notes’), after the date falling 

40 days after the completion of the distribution of such Tranche upon certification as to non-U.S. beneficial ownership. Interests in permanent Global 

Notes will be exchangeable for Definitive Notes in whole but not in part as described under ‘Summary of Provisions Relating to the Notes while in 

Global Form’. 

Notes of each Tranche of each Series to be issued in registered form (‘Registered Notes’) and which are sold in an ‘offshore transaction’ 

within the meaning of Regulation S (‘Unrestricted Notes’) under the U.S. Securities Act of 1933 (the ‘Securities Act’) will initially be represented by a 

permanent registered global certificate (each an ‘Unrestricted Global Certificate’), without interest coupons, which may be deposited on the issue 

date (a) in the case of a Tranche intended to be cleared through Euroclear and/or Clearstream, Luxembourg, with a common depositary on behalf of 

Euroclear and Clearstream, Luxembourg and (b) in the case of a Tranche intended to be cleared through a clearing system other than or in addition 

to Euroclear and/or Clearstream, Luxembourg, The Depository Trust Company (‘DTC’) or delivered outside a clearing system, as agreed between the 

Issuer and the relevant Dealer. 

Registered Notes issued by Rabobank Nederland which are sold in the United States to qualified institutional buyers within the meaning of 

Rule 144A under the Securities Act (‘Restricted Notes’) will initially be represented by a permanent registered global certificate (each a ‘Restricted 

Global Certificate’ and, together with the ‘Unrestricted Global Certificate’, the ‘Global Certificates’), without interest coupons, which may be deposited 

on the issue date either with (a) a common depositary on behalf of Euroclear and Clearstream, Luxembourg, or (b) a custodian for, and registered in 

the name of Cede & Co. as nominee for, DTC. 

Beneficial interests in Global Certificates held by Euroclear, Clearstream, Luxembourg and/or DTC will be shown on, and transfers thereof 

will be effected only through, records maintained by Euroclear, Clearstream, Luxembourg and/or DTC and their participants. See ‘Clearing and 

Settlement’. The provisions governing the exchange of interests in the Global Notes and in each Global Certificate are described in ‘Summary of 

Provisions Relating to the Notes while in Global Form’. 

Senior Notes issued under the Programme have been rated AA+ by Fitch Ratings Ltd. Senior long-term Notes have been rated Aaa by 

Moody’s Investors Service, Inc. (‘Moody’s’) and AAA by Standard & Poor’s Ratings Services (‘Standard & Poor’s’). Notes issued pursuant to the 

Programme may be rated or unrated. Where an issue of Notes is rated, its rating will not necessarily be the same as the rating applicable to Senior 

Notes issued under the Programme and will be specified in the relevant Final Terms. None of these ratings is a recommendation to buy, sell or hold 

securities and any of them may be subject to suspension, reduction or withdrawal at any time by the assigning rating agency without prior notice. 

This Offering Circular supersedes and replaces the Offering Circular dated July 11, 2005. 

Rabobank International 

Citigroup 

Daiwa Securities SMBC Europe 

JPMorgan 

Mizuho International plc 

Dealers 

UBS Investment Bank 

Arranger for the Programme 

Credit Suisse 

The date of this Offering Circular is May 31, 2006 

BNP PARIBAS 

Credit Suisse 

Goldman Sachs International 

Merrill Lynch International 

Morgan Stanley

Rabobank Nederland, having taken all reasonable care to ensure that such is the case, confirms 

that, to the best of its knowledge, the information contained in this Offering Circular with respect to 

itself as well as with respect to itself and its members, subsidiaries and affiliates taken as a whole 

(the ‘Group’ or the ‘Rabobank Group’) and the Notes or otherwise is in accordance with the facts 

and does not omit anything likely to affect the import of such information. Rabobank Nederland 

accepts responsibility accordingly. 

No person has been authorised to give any information or to make any representation other 

than those contained in this Offering Circular in connection with the issue or sale of the Notes and, 

if given or made, such information or representation must not be relied upon as having been 

authorised by the Issuer or any of the Dealers or the Arranger (as defined in ‘Summary — The 

Programme’). Neither the delivery of this Offering Circular nor any sale made in connection herewith 

shall, under any circumstances, create any implication that there has been no change in the affairs 

of the Issuer since the date hereof or the date upon which this Offering Circular has been most 

recently amended or supplemented or that there has been no adverse change in the financial 

position of the Issuer since the date hereof or the date upon which this Offering Circular has been 

most recently amended or supplemented or that any other information supplied in connection with 

the Programme is correct as of any time subsequent to the date on which it is supplied or, if different, 

the date indicated in the document containing the same. 

The distribution of this Offering Circular and any Final Terms and the offering or sale of the Notes 

in certain jurisdictions may be restricted by law. Persons into whose possession this Offering 

Circular or any Final Terms comes are required by the Issuer, the Dealers and the Arranger to inform 

themselves about and to observe any such restriction. The Notes have not been and will not be 

registered under the Securities Act or with any securities regulatory authority of any state or other 

jurisdiction of the United States and are being sold pursuant to an exemption from the registration 

requirements of such Act. The Notes include Notes in bearer form that are subject to U.S. tax law 

requirements. Subject to certain exceptions, Notes may not be offered or sold or, in the case of Notes 

in bearer form, delivered within the United States or to, or for the account or benefit of, U.S. persons 

as defined in Regulation S under the Securities Act. 

Your attention is drawn to the important information on pages 16-19. 

3

TABLE OF CONTENTS 

Page 

SUMMARY ..................................................................................................................................... 5 

RISK FACTORS.............................................................................................................................. 9 

IMPORTANT INFORMATION.......................................................................................................... 16 

GENERAL DESCRIPTION OF THE PROGRAMME ....................................................................... 20 

TERMS AND CONDITIONS OF THE NOTES ................................................................................. 26 

SUMMARY OF PROVISIONS RELATING TO THE NOTES WHILE IN GLOBAL FORM ................ 57 

USE OF PROCEEDS ...................................................................................................................... 62 

CLEARING AND SETTLEMENT..................................................................................................... 63 

DESCRIPTION OF BUSINESS OF THE RABOBANK GROUP ...................................................... 67 

THE RABOBANK GROUP STRUCTURE ....................................................................................... 79 

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND 

RESULTS OF OPERATIONS .......................................................................................................... 81 

SELECTED FINANCIAL INFORMATION ........................................................................................ 108 

RISK MANAGEMENT..................................................................................................................... 113 

GOVERNANCE OF THE RABOBANK GROUP .............................................................................. 116 

REGULATION OF THE RABOBANK GROUP................................................................................. 122 

CAPITALISATION OF THE RABOBANK GROUP........................................................................... 126 

RABOBANK AUSTRALIA BRANCH............................................................................................... 127 

RABOBANK SINGAPORE BRANCH.............................................................................................. 128 

TAXATION....................................................................................................................................... 129 

TRANSFER RESTRICTIONS.......................................................................................................... 145 

PLAN OF DISTRIBUTION .............................................................................................................. 147 

GENERAL INFORMATION ............................................................................................................. 152 

FORM OF FINAL TERMS............................................................................................................... 154 

SUMMARY OF PRINCIPAL DIFFERENCES BETWEEN IFRS AND U.S. GAAP ............................ 171 

SUMMARY OF PRINCIPAL DIFFERENCES BETWEEN DUTCH GAAP AND U.S. GAAP............. 175 

INDEX TO FINANCIAL STATEMENTS............................................................................................ F1 

4

SUMMARY 

This summary must be read as an introduction to this Offering Circular. Any decision to invest in 

any Notes should be based on a consideration of this Offering Circular as a whole, including the 

documents incorporated by reference, by any investor. The Issuer has civil liability in respect of this 

summary, if it is misleading, inaccurate or inconsistent when read together with the other parts of this 

Offering Circular. Where a claim relating to information contained in this Offering Circular is brought before 

a court in an EEA State, the claimant may, under the national legislation of the EEA State where the claim 

is brought, be required to bear the costs of translating the Offering Circular before the legal proceedings 

are initiated. 

Unless the context otherwise requires, references in this summary to the ‘Rabobank Group’, 

‘Rabobank’ or the ‘Group’ are to Rabobank Nederland and its members, subsidiaries and affiliates, and 

references to the ‘Bank’ are to Rabobank Nederland. 

Rabobank 

Rabobank, founded over a century ago, is one of the largest banking groups in the Netherlands 

and ranks in the top 25 banking institutions in the world in terms of total assets and Tier I capital. The 

Group is a cooperative banking organisation comprised of Rabobank Nederland (a cooperative entity 

licensed as a credit institution in the Netherlands), Rabobank Nederland’s local member credit institutions 

(the ‘Local Rabobanks’) and numerous specialised finance and other subsidiaries. A system of cross 

guarantees provides for intra-Group credit support among Rabobank Nederland, all Local Rabobanks 

and certain subsidiaries in the event of a shortfall in assets in one of the entities. In the Netherlands, the 

Rabobank Group follows an ‘Allfinanz’ concept, meaning it provides an integrated range of financial 

services comprised primarily of retail banking, wholesale banking and international retail banking, asset 

management and investment, leasing, real estate and distribution of insurance products to a wide range 

of both individual and corporate customers. As an Allfinanz provider, the Group focuses on operations 

that produce fee-based income in addition to the Group’s traditional interest-based income sources. For 

example, Rabobank is active in asset management through Robeco Group N.V., the largest retail 

investment manager in the Netherlands in terms of assets under management, in which Rabobank 

Nederland owns a 100 per cent. equity interest. Internationally, Rabobank pursues a niche strategy in 

investment and international corporate banking through Rabobank International. At December 31, 2005, 

the Rabobank Group operated in the Netherlands through 248 Local Rabobanks and 3,031 points of 

contact and internationally through overseas offices in countries outside the Netherlands. 

Rabobank’s current ratings from Moody’s and Standard & Poor’s are AAA and Aaa, respectively 

and AA+ from Fitch Ratings Ltd. 

At December 31, 2005, Rabobank had total assets of EUR 506 billion, loans outstanding to private 

sector borrowers amounting to EUR 278 billion (net of reserves for loan losses), equity of EUR 26.3 billion, 

due to customers of EUR 186.5 billion and EUR 86.2 billion in savings accounts. Rabobank’s pre-tax 

return on average equity for the year ended December 31, 2005 was 9.1 per cent. 

Objects 

According to article 3 of its Articles of Association, the object of Rabobank Nederland is to promote 

the interests of its members, the Local Rabobanks. It shall do so by: (i) promoting the establishment,

Market Position in the Netherlands 

Rabobank has a customer base of approximately nine million customers, which means that more 

than half the population of the Netherlands buys one or more products from the Rabobank Group. 

Rabobank Nederland acts as central bank for 248 Local Rabobanks (at December 31, 2005), from which 

the Group’s members are drawn. Through these Local Rabobanks and their branches and agencies, 

Rabobank has built a domestic customer franchise with substantial market shares (based on 

management estimates) in the following areas: 

Residential mortgages: as of December 31, 2005 18.9 per cent. of the domestic share by amount 

is provided by Local Rabobanks and another 4.1 per cent. by Obvion N.V., Rabobank’s mortgage loan 

joint venture with the ABPPension Funds, making Rabobank one of the largest residential mortgage 

providers in the Netherlands; 

Savings deposits of individuals: as of December 31, 2005 39 per cent. market share by amount in 

the Dutch private savings deposits market, which provides a substantial part of the Bank’s funding; 

Lending to small and medium-sized Dutch businesses: in 2005 38 per cent. of small enterprises 

with less than 100 employees maintain their principal banking relationship with Rabobank; and 

Agricultural loans: in 2005 83 per cent. by amount of all Dutch agricultural bank loans. 

Focused International Expansion 

Rabobank’s international expansion strategy is focused on following Dutch corporates and 

individual customers overseas, providing financial services in sectors in which Rabobank has traditionally 

operated, such as the food and agriculture industries, and on establishing and developing retail 

operations abroad, or ‘country-banking’. 

Asset Quality Record 

The bad debt expenses/private sector lending ratio provides an indication of the probability of credit 

losses. At Group level, the average for the period 2000 to 2004 was 24 basis points (based on Dutch 

GAAP) and for 2005 was 20 basis points, reflecting Rabobank Group’s favourable credit risk profile. 

At December 31, 2005, economic country risk exposure to non-OECD countries represented 2.2 

per cent. of the Group’s total assets. Having taken into account country risk-reducing components, net 

country risk before provisions amounted to 0.8 per cent. of the Group’s total assets. 

Capitalisation 

As a result of Rabobank’s cooperative ownership structure, it is not allowed to pay dividends, which 

benefits its capital base. Because a large part of Rabobank’s assets is invested in residential mortgages, 

its risk adjusted capital ratios compare favourably to its peer banks. At December 31, 2005, Rabobank 

had a Tier I ratio of 11.6 per cent. 

Form of Notes 

The Notes may be issued in bearer form only, in bearer form exchangeable for Registered Notes or 

in registered form only. 

Currencies 

Subject to compliance with all relevant laws, regulations and directives, Notes may be issued in any 

currency agreed between the Issuer and the relevant Dealers, except that, as at the date hereof, only 

Rabobank Nederland may issue Notes denominated in Sterling. 

Maturities 

Subject to compliance with all relevant laws, regulations and directives, Notes may be issued with 

any maturity between seven days and perpetuity. 

Denomination 

Definitive Notes will be in such denominations as may be specified in the relevant Final Terms. 

6

Redemption 

The Final Terms will specify the basis for calculating the redemption amounts payable, which may 

be by reference to a stock, index or formula or as otherwise provided in the relevant Final Terms. 

Governing Law 

Dutch law. 

Listing 

Euronext Amsterdam, the Luxembourg Stock Exchange, or as otherwise specified in the relevant 

Final Terms. As specified in the relevant Final Terms, a Series of Notes may be unlisted. 

Risk Factors 

The purchase of Notes may involve substantial risks and is suitable only for investors who have the 

knowledge and experience in financial and business matters necessary to enable them to evaluate the 

risks and the merits of an investment in the Notes. Material risks that may affect the Issuer’s ability to fulfil 

its obligations under Notes issued under the Programme include Rabobank Group’s exposure to credit 

risk and credit losses, country risk, interest rate risk, funding and liquidity risk, market risk, currency risk 

and operational risks. Material risks relating to the structure of particular issuance of Notes may 

(depending on the terms of the particular issue) include that the market price of the Notes may be volatile, 

the Notes may not pay interest or the payment of interest may depend on the market value of other 

securities, payment of principal or interest may occur at a different time or in a different currency than 

expected and payment of principal may be in an amount less than the nominal amount of the Notes or 

even zero. Please see the heading ‘Risk Factors’. 

7

SUMMARY FINANCIAL INFORMATION 

The following unaudited table presents certain historical consolidated financial information for the 

Rabobank Group as well as certain selected operating information about the Rabobank Group. This 

information should be read in conjunction with the Rabobank audited consolidated financial statements 

and the section entitled ‘Management’s Discussion and Analysis of Financial Condition and Results of 

Operations’ which appear elsewhere in this Offering Circular. 

The five year key figures at and for the years ended December 31, 2001 to 2005 have been derived 

from the corresponding Rabobank financial statements, which have been audited by Ernst & Young 

Accountants, independent auditor in the Netherlands (‘Ernst & Young’). The Rabobank audited 

consolidated financial statements for 2005 have been prepared in accordance with IFRS and the 

comparative figures of 2004 have been restated accordingly. IFRS differs in certain significant respects 

from U.S. GAAP. See ‘Summary of Principal Differences between IFRS and U.S. GAAP’ for a description 

of the principal differences between IFRS and U.S. GAAP as they relate to Rabobank. The 2004 financial 

figures were also prepared under Dutch GAAP which enables a comparison with the 2001 to 2003 figures 

(prepared under Dutch GAAP). Dutch GAAP also differs in certain significant respects from U.S. GAAP. 

See ‘Summary of Principal Differences between Dutch GAAP and U.S. GAAP’ for a description of the 

principal differences between Dutch GAAP and U.S. GAAP as they relate to Rabobank. 

Key Figures 1 2005 2004 2004 2003 2002 2001 

Volume of services (in EUR millions) 

Total assets 506,234 483,574 475,089 403,305 374,720 363,679 

Private sector lending 278,095 248,958 252,996 235,425 212,323 197,262 

Due to customers 186,459 177,482 192,123 172,571 171,632 172,174 

Assets managed and held in custody 224,200 223,400 195,000 184,000 168,000 194,400 

Financial position and solvency 

(in EUR millions) 

Equity 26,349 23,004 18,143 15,233 14,261 12,380 2 

Tier I capital 24,860 21,404 22,621 19,660 17,202 15,092 2 

Qualifying capital 25,272 21,205 22,586 19,892 17,414 15,542 2 

Total risk-weighted assets 213,901 196,052 198,552 182,820 165,843 152,812 2 

Solvency requirement 17,112 15,684 15,887 14,626 13,268 12,225 2 

Tier I ratio 11.6 10.9 11.4 10.8 10.3 9.9 2 

BIS ratio 11.8 10.8 11.4 10.9 10.5 10.2 2 

Profit and loss account 

(in EUR millions) 

Total income 9,363 9,222 10,055 9,018 8,518 8,388 

Total expenses 6,164 6,177 6,732 6,243 5,839 5,965 

Value adjustments 517 479 514 427 752 539 

Operating profit before taxation 2,682 2,566 2,809 2,348 1,927 1,884 

Net profit 2,083 1,793 1,536 1,370 1,222 1,178 

Ratios 

Return on equity 9.1% 9.0% 10.1% 9.6% 9.9% 9.5% 

Efficiency ratio 65.8% 67.0% 67.0% 69.2% 68.5% 71.1% 

General: Due to consolidation effects, the sum of the figures relating to Group entities will not always correspond with Rabobank Group totals. 

Changes in terms of percentages can vary as a result of rounding. 

1) The first two columns corresponding to the years 2005 and 2004 are based on IFRS. The other columns corresponding to the years 2001 up 

to and including 2004 are based on Dutch GAAP. 

2) The Tier 1 ratio and the BIS ratio for 2001 have been calculated taking into account the effect on equity of the changed accounting policy for 

pensions with effect from January 1, 2002. 

8

RISK FACTORS 

The Issuer believes that the following factors may affect its ability to fulfil its obligations under Notes 

issued under the Programme. Most of these factors are contingencies, which may or may not occur and 

the Issuer is not in a position to express a view on the likelihood of any such contingency occurring. 

In addition, factors which are material for the purpose of assessing the market risks associated with 

Notes issued under the Programme are also described below. 

The Issuer believes that the factors described below represent the principal risks inherent in 

investing in Notes issued under the Programme, but the inability of the Issuer to pay interest, principal 

or other amounts on or in connection with any Notes may occur for other reasons and the Issuer does 

not represent that the statements below regarding the risks of holding any Notes are exhaustive. 

Prospective investors should also read the detailed information set out elsewhere in this Offering Circular 

and reach their own views prior to making any investment decision. 

References in this chapter ‘Risk Factors’ to the ‘Bank’ are to Rabobank Group. 

Factors that may affect the Issuer’s ability to fulfil its obligations under Notes issued under the 

Programme 

Credit risk 

Rabobank Group pursues a prudent acceptation policy, characterised by careful assessment of 

clients and their ability to make repayments. Rabobank Group grants loans only if it expects that a client 

can fully meet its payment commitments. Rabobank Group’s portfolio is divided across a large number 

of business sectors. This creates a large and balanced risk spread, so that the quality of the financing 

portfolio does not significantly deteriorate if one or more business sectors go through a difficult period 

or in the event of an economic recession. Approval of larger financing applications is decided on by 

various committees, the level of the applicable committee depending on the amount of the requested 

financing. The Executive Board itself decides on the largest financing applications. 

An important element in the process of approving financing applications is the assigning of a rating 

that indicates the likelihood of a client being unable to repay the loan. This likelihood is referred to as the 

probability of default (‘PD’). In 2003, Rabobank Group introduced the Rabobank Group Risk Rating 

(‘RRR’), which reflects the counterparty’s probability of default over a one-year period and which is 

applied to all larger corporate clients, financial institutions and public entities. The system comprises 25 

ratings. Ratings R0 to R20 imply that financing commitments are met. R0 means the absence of risk and 

R20 means that the financial position is considered very weak. Ratings D1 to D4 indicate in principle that 

payment commitments are no longer being met and that the collectibility of the loan is doubtful. D4 

stands for bankruptcy or a comparable situation. 

The portfolio’s average rating is between R11 and R14. For 3% of the portfolio, the commitments 

are not being fully met and an adequate provision has been formed for this part of the portfolio. It should 

be noted that the breakdown indicates only the extent to which Rabobank Group expects that clients 

can or cannot meet their commitments. 

Bad debt expenses/private sector lending ratio 

The ‘bad debt expenses/private sector lending ratio’ provides an indication of the probability of 

credit losses. At Group level, the average for the period 2000 to 2004 was 24 basis points 1 and for 2005 

was 20 basis points, reflecting Rabobank Group’s favourable credit risk profile. The ratio was higher in 

2005 for the wholesale and international retail banking operations and for leasing, at 52 and 72 basis 

points, respectively. The ratio for the domestic retail banking operations in 2005 was considerably lower, 

at 9 basis points. 

Country risk 

With respect to country risk, a distinction can be made between transfer risk and collective debtor 

risk. Transfer risk relates to the possibility of foreign governments placing restrictions on funds transfers 

from debtors in that country to creditors abroad. Collective debtor risk relates to the situation when a 

1) One basis point is 0.01% 

9

large number of debtors in a country cannot meet their commitments for the same reason (e.g. war, 

political and social unrest, natural disasters, but including government policy that does not succeed in 

creating macro-economic and financial stability). 

Transfer limits are determined according to the net transfer risk, which is defined as total loans 

granted less loans granted in local currency less guarantees and other collateral obtained to cover 

transfer risk and less a deduction for the lower weighting of specific products. The limits are allocated to 

the offices, which are themselves responsible for the day-to-day monitoring of the loans granted by them. 

At Rabobank Group level, the country risk outstanding, including additional capital requirement and 

provision for country risks, is reported at every meeting of the Balance Sheet and Risk Management 

Committee (‘BRMC’) and the Country Limit Committee. The calculation of the additional capital 

requirement and the provision for country risk is made in accordance with Dutch Central Bank guidelines 

and concerns high-risk countries. 

The net transfer risk before provisions for non-OECD countries is usually less than 1% of total 

assets. 

Interest rate risk 

An important risk component for Rabobank Group is interest rate risk. Interest rate risk is the risk, 

outside the trading environment, of deviations in interest income and/or the market value of capital as a 

result of changes in market interest rates. Interest rate risk results mainly from mismatches between the 

periods for which interest rates are fixed for loans and funds entrusted. If interest rates increase, the rate 

for the liabilities, such as savings, can be adjusted immediately. This does not apply to the majority of 

the assets, such as mortgages, which have longer interest rate fixation periods. 

Funding and liquidity risk 

Liquidity risk is the risk that not all (re)payment commitments can be met. This could happen if 

clients or other professional counterparties suddenly withdraw more funding than expected, which 

cannot be met by the Bank’s cash resources or by selling or pledging assets or by borrowing funds from 

third parties. 

Methods to measure liquidity risk include the CA/CL method (Core Asset/Core Liabilities). This 

analysis is based on the cash flow schedule of assets and liabilities. A quantification is made of the assets 

(and unused facilities) and liabilities that will probably still be or come on the balance sheet after a defined 

stress scenario has taken place. These remaining assets and liabilities are referred to as the core assets 

(‘CA’) and core liabilities (‘CL’) respectively. The CA/CL ratio is the liquidity ratio. Given the highly 

conservative weightings used, a ratio of below 1.2 is considered adequate. In 2005, this was the case 

for the scenarios used. 

Market risk 

Market risk relates to changes in the value of the trading portfolio as a result of price movements 

in the market. Price changes include prices of interest rate products (interest rate), equities, currencies, 

certain commodities and derivatives. The exposure is calculated and consolidated on a daily basis and 

managed using a sophisticated system of limits. At a consolidated level, the exposure is expressed by 

the ‘Value at Risk’. This measure, based on historic market developments, indicates the maximum loss 

that Rabobank Group can suffer subject to a certain confidence level and in ‘normal’ market conditions. 

The level of the Value at Risk reflects market developments and the positions taken by the Bank itself. 

In order to understand the maximum potential risk, the effect of certain extreme events (‘event risk’) 

on the value of the portfolios is calculated. To this end, both actual and hypothetical scenarios are 

analysed. Sensitivity analyses are also used. 

Currency risk 

Currency risk positions are taken in both trading and non-trading books. As other market risks, the 

currency risk in the trading books is controlled using Value at Risk limits. Currency risk in the non-trading 

books relates exclusively to the translation risk 2 on capital invested in foreign activities and issues of 

Trust Preferred Securities not denominated in euros. 

2) Translation risk is the risk that exists when assets or liabilities are denominated in a currency deviating from the presentation currency 

10

Operational risk 

As a risk type, operational risk has acquired its own distinct position in the banking world. It is defined 

as ‘the risk of losses resulting from failure of internal processes, people or systems or from external events’. 

Events of recent decades in modern international banking have shown on several occasions that ineffective 

control of operational risks can lead to substantial losses. Under the Basel II accord, banks must hold capital 

for this risk. Examples of operational risk incidents are highly diverse: fraud, claims relating to inadequate 

products, losses due to poor occupational health and safety conditions, errors in transaction processing, 

non-compliance with the law and system failures. 

Factors which are material for the purpose of assessing the market risks associated with Notes 

issued under the Programme 

The Notes may not be a suitable investment for all investors 

Each potential investor in the Notes must determine the suitability of that investment in light of its own 

circumstances. In particular, each potential investor should: 

• have sufficient knowledge and experience to make a meaningful evaluation of the Notes, the 

merits and risks of investing in the Notes and the information contained or incorporated by 

reference in this Offering Circular or any applicable supplement; 

• have access to, and knowledge of, appropriate analytical tools to evaluate, in the context of its 

particular financial situation, an investment in the Notes and the impact the Notes will have on its 

overall investment portfolio; 

• have sufficient financial resources and liquidity to bear all of the risks of an investment in the Notes, 

including Notes with principal or interest payable in one or more currencies, or where the currency 

for principal or interest payments is different from the potential investor’s currency; 

• understand thoroughly the terms of the Notes and be familiar with the behaviour of any relevant 

indices and financial markets; and 

• be able to evaluate (either alone or with the help of a financial adviser) possible scenarios for 

economic, interest rate and other factors that may affect its investment and its ability to bear the 

applicable risks. 

Some Notes are complex financial instruments. Sophisticated institutional investors generally do not 

purchase complex financial instruments as stand-alone investments. They purchase complex financial 

instruments as a way to reduce risk or enhance yield with an understood, measured, appropriate addition 

of risk to their overall portfolios. A potential investor should not invest in Notes which are complex financial 

instruments unless it has the expertise (either alone or with a financial adviser) to evaluate how the Notes 

will perform under changing conditions, the resulting effects on the value of the Notes and the impact this 

investment will have on the potential investor’s overall investment portfolio. 

Risks related to the structure of a particular issue of Notes 

A wide range of Notes may be issued under the Programme. A number of these Notes may have 

features, which contain particular risks for potential investors. Set out below is a description of the most 

common features: 

Notes subject to optional redemption by the Issuer 

An optional redemption feature of Notes is likely to limit their market value. During any period when the 

Issuer may elect to redeem Notes, the market value of those Notes generally will not rise substantially above 

the price at which they can be redeemed. This also may be true prior to any redemption period. 

The Issuer may be expected to redeem Notes when its cost of borrowing is lower than the interest rate 

on the Notes. At those times, an investor generally would not be able to reinvest the redemption proceeds 

at an effective interest rate as high as the interest rate on the Notes being redeemed and may only be able 

to do so at a significantly lower rate. Potential investors should consider reinvestment risk in light of other 

investments available at that time. 

11

Equity Linked Notes, Index Linked Notes and Dual Currency Notes 

The Issuer may issue Notes with principal or interest determined by reference to an index or formula, 

to changes in the prices of securities or commodities, to movements in currency exchange rates or other 

factors (each, a ‘Relevant Factor’). In addition, the Issuer may issue Notes with principal or interest payable 

in one or more currencies, which may be different from the currency in which the Notes are denominated. 

Potential investors should be aware that: 

1. the market price of such Notes may be volatile; 

2. they may receive no interest or principal; 

3. payment of principal or interest may occur at a different time or in a different currency than expected; 

4. the amount of principal payable on redemption may be less than the nominal amount on such Notes 

or even zero; 

5. a Relevant Factor may be subject to significant fluctuations that may not correlate with changes in 

interest rates, currencies or other indices; 

6. if a Relevant Factor is applied to Notes in conjunction with a multiplier greater than one or contains 

some other leverage factor, the effect of changes in the Relevant Factor on principal or interest payable 

likely will be magnified; and 

7. the timing of changes in a Relevant Factor may affect the actual yield to investors, even if the average 

level is consistent with their expectations. In general, the earlier the change in the Relevant Factor, the 

greater the effect on yield. 

Index Linked Notes differ from ordinary debt securities in that amounts due in respect of principal 

and/or interest will be dependent upon the performance of the underlying index, which itself may contain 

substantial credit, interest rate or other risks. 

Equity Linked Notes differ from ordinary debt securities in that the amount of interest payable by the 

Issuer (whether at maturity or earlier) will depend on the market value of the Underlying Securities (as defined 

in the ‘Terms and Conditions of the Notes’) at such time. If Dual Currency has been declared applicable in 

the relevant Final Terms, payments (whether in respect of repayment or interest and whether at maturity or 

otherwise) will be made in such currencies and based on such rates of exchange as may be specified in the 

relevant Final Terms. The Noteholder may be exposed to currency risk in such event. 

Partly-paid Notes 

The Issuer may issue Notes where the issue price is payable in more than one instalment. Failure to 

pay any subsequent instalment could result in an investor losing all of his investment. 

Variable rate Notes with a multiplier or other leverage factor 

Notes with variable interest rates can be volatile investments. If they are structured to include multipliers 

or other leverage factors, or caps or floors, or any combination of those features or other similar related 

features, their market values may be even more volatile than those for securities that do not include those 

features. 

Inverse Floating Rate Notes 

Inverse Floating Rate Notes have an interest rate equal to a fixed rate minus a rate based upon a 

reference rate such as LIBOR. The market values of those Notes typically are more volatile than market 

values of other conventional floating rate debt securities based on the same reference rate (and with 

otherwise comparable terms). Inverse Floating Rate Notes are more volatile because an increase in the 

reference rate not only decreases the interest rate of the Notes, but may also reflect an increase in prevailing 

interest rates, which further adversely affects the market value of these Notes. 

Fixed/Floating Rate Notes 

Fixed/Floating Rate Notes may bear interest at a rate that the Issuer may elect to convert from a fixed 

rate to a floating rate, or from a floating rate to a fixed rate. The Issuer’s ability to convert the interest rate 

will affect the secondary market and the market value of the Notes since the Issuer may be expected to 

convert the rate when it is likely to produce a lower overall cost of borrowing. If the Issuer converts from a 

12

fixed rate to a floating rate, the spread on the Fixed/Floating Rate Notes may be less favourable than then 

prevailing spreads on comparable Floating Rate Notes tied to the same reference rate. In addition, the new 

floating rate at any time may be lower than the rates on other Notes. If the Issuer converts from a floating 

rate to a fixed rate, the fixed rate may be lower than then prevailing rates on its Notes. 

Notes issued at a substantial discount or premium 

The market values of securities issued at a substantial discount or premium from their principal amount 

tend to fluctuate more in relation to general changes in interest rates than do prices for conventional interestbearing 

securities. Generally, the longer the remaining term of the securities, the greater the price volatility 

as compared to conventional interest-bearing securities with comparable maturities. 

Risks related to Notes generally 

Set out below is a brief description of certain risks relating to the Notes generally: 

Modification, waivers and substitution 

The Conditions of the Notes contain provisions for calling meetings of Noteholders to consider matters 

affecting their interests generally. These provisions permit defined majorities to bind all Noteholders including 

Noteholders who did not attend and vote at the relevant meeting and Noteholders who voted in a manner 

contrary to the majority. 

The Conditions may be amended by the Issuer (i) for the purposes of curing any ambiguity, or for curing, 

correcting or supplementing any defective provision contained therein or (ii) in any manner which the Issuer 

may deem necessary or desirable and which shall not materially adversely affect the interests of the holders 

of the Notes, Receipts and Coupons, to all of which each holder of Notes, Receipts and Coupons shall, by 

acceptance thereof, consent. The Conditions also provide for the substitution of another company as 

principal debtor under any Notes in place of the Issuer, in the circumstances described in Condition 14 of 

the Notes. 

EU Savings Directive 

Under EC Council Directive 2003/48/EC on the taxation of savings income, each Member State is 

required to provide to the tax authorities of another Member State details of payments of interest (or similar 

income) paid by a person within its jurisdiction to, or collected by such a person for, an individual resident 

in that other Member State. However, for a transitional period, Belgium, Luxembourg and Austria are instead 

required (unless during that period they elect otherwise) to operate a withholding system in relation to such 

payments. A number of non-EU countries and territories including Switzerland have adopted similar 

measures (a withholding system in the case of Switzerland) with effect from the same date. 

The transitional period is to terminate at the end of the first full fiscal year following an agreement by 

certain non-EU countries to the exchange of information relating to such payments. 

In addition, the Member States have entered into reciprocal provision of information or withholding 

arrangements with dependent or associated territories (including Switzerland which has adopted a 

withholding system) in relation to payments made by a person in a Member State to, or collected by such 

a person for, an individual resident in one of those territories. 

If, following implementation of this Directive, a payment were to be made or collected through a 

Member State which has opted for a withholding system and an amount of, or in respect of tax were to be 

withheld from that payment, neither the Bank nor any Paying Agent nor any other person would be obliged 

to pay additional amounts with respect to any Note as a result of the imposition of such withholding tax. If 

a withholding tax is imposed on payment made by a Paying Agent following implementation of this Directive, 

the Bank will be required to maintain a Paying Agent in a Member State that will not be obliged to withhold 

or deduct tax pursuant to the Directive. 

Basel Capital Requirements Directive 

The Basel Committee has issued proposals for reform of the 1988 Basel Capital Accord and has 

proposed a framework, which places enhanced emphasis on market discipline and sensitivity to risk. The 

Rabobank Group cannot predict the precise effects of the potential changes that might result from 

implementation of the proposals on both its own financial performance or the impact on the pricing of its 

13

Notes issued under this Programme. Prospective investors in the Notes should consult their own advisers 

as to the consequences for them of the potential application of the New Basel Capital Accord proposals. 

Change of law 

The conditions of the Notes are based on Dutch law in effect as at the date of this Offering Circular. 

No assurance can be given as to the impact of any possible judicial decision or change to Dutch law or 

administrative practice after the date of this Offering Circular. 

Integral multiples of less than € 50,000 

Where Notes have a Minimum Specified Denomination of € 50,000 (or its equivalent in any other 

currency as at the date of issue of the relevant Notes), it is possible that such Notes may be traded in the 

clearing systems in amounts in excess of € 50,000 (or its equivalent) that are not integral multiples of € 

50,000 (or its equivalent). In such case, should definitive Notes be required to be issued, Noteholders who 

hold Notes in the relevant clearing system in amounts that are not integral multiples of a Specified 

Denomination may need to purchase or sell, on or before the relevant Exchange Date, a principal amount 

of Notes such that their holding is an integral multiple of a Specified Denomination. 

Risks related to the market generally 

Set out below is a brief description of the principal market risks, including liquidity risk, exchange rate 

risk, interest rate risk and credit risk: 

The secondary market generally 

Notes may have no established trading market when issued, and one may never develop. If a market 

does develop, it may not be very liquid. Therefore, investors may not be able to sell their Notes easily or at 

prices that will provide them with a yield comparable to similar investments that have a developed secondary 

market. This is particularly the case for Notes that are especially sensitive to interest rate, currency or market 

risks, are designed for specific investment objectives or strategies or have been structured to meet the 

investment requirements of limited categories of investors. These types of Notes generally would have a 

more limited secondary market and more price volatility than conventional debt securities. Illiquidity may 

have a severely adverse effect on the market value of Notes. 

Exchange rate risks and exchange controls 

The Issuer will pay principal and interest on the Notes in the Specified Currency. This presents certain 

risks relating to currency conversions if an investor’s financial activities are denominated principally in a 

currency or currency unit (the ‘Investor’s Currency’) other than the Specified Currency. These include the 

risk that exchange rates may significantly change (including changes due to devaluation of the Specified 

Currency or revaluation of the Investor’s Currency) and the risk that authorities with jurisdiction over the 

Investor’s Currency may impose or modify exchange controls. An appreciation in the value of the Investor’s 

Currency relative to the Specified Currency would decrease (i) the Investor’s Currency-equivalent yield on 

the Notes, (ii) the Investor’s Currency-equivalent value of the principal payable on the Notes and (iii) the 

Investor’s Currency-equivalent market value of the Notes.If the Notes are denominated in another currency 

than the currency of the country in which the Noteholder is resident, the Noteholder is exposed to the risk 

of fluctuations in the exchange rate between the two aforementioned currencies. The Noteholder may also 

be exposed to a foreign exchange risk if the reference obligation is denominated, or based on prices in 

another currency than the currency in which the relevant Note is denominated.Government and monetary 

authorities may impose (as some have done in the past) exchange controls that could adversely affect an 

applicable exchange rate. As a result, investors may receive less interest or principal than expected, or no 

interest or principal. 

Interest rate risks 

Investment in Fixed Rate Notes involves the risk that subsequent changes in market interest rates may 

adversely affect the value of the Fixed Rate Notes. 

Credit ratings may not reflect all risks 

One or more independent credit rating agencies may assign credit ratings to the Notes. The ratings 

may not reflect the potential impact of all risks related to structure, market, additional factors discussed 

14

above, and other factors that may affect the value of the Notes. A credit rating is not a recommendation to 

buy, sell or hold securities and may be revised or withdrawn by the rating agency at any time. 

Legal investment considerations may restrict certain investments 

The investment activities of certain investors are subject to legal investment laws and regulations, or 

review or regulation by certain authorities. Each potential investor should consult its legal advisers to 

determine whether and to what extent (i) Notes are legal investments for it, (ii) Notes can be used as collateral 

for various types of borrowing and (iii) other restrictions apply to its purchase or pledge of any Notes. 

Financial institutions should consult their legal advisors or the appropriate regulators to determine the 

appropriate treatment of Notes under any applicable risk-based capital or similar rules. 

15

IMPORTANT INFORMATION 

Documents incorporated by reference 

This Offering Circular should be read and construed in conjunction with the relevant Final Terms and 

the following documents which have been previously published or are published simultaneously with the 

Offering Circular and that have been approved by the Netherlands Authority for the Financial Markets (AFM) 

or filed with it and shall be deemed to be incorporated in, and to form part of, this Offering Circular: 

(a) the audited consolidated and unconsolidated financial statements of Rabobank Nederland for the 

years ended December 31, 2003, 2004 and 2005 (together with the audit reports thereon and 

explanatory notes thereto); 

(b) the Articles of Association of Rabobank Nederland, last amended on June 25, 2004; 

(c) the Terms and Conditions of the Rabobank Nederland Global Medium Term Note programmes dated 

October 7, 2003, October 15, 2004 and July 11, 2005; 

save that any statement contained in this Offering Circular or in any of the documents incorporated by 

reference in, and forming part of, this Offering Circular shall be deemed to be modified or superseded for 

the purpose of this Offering Circular to the extent that a statement contained in any document which is 

subsequently incorporated by reference herein by way of a supplement prepared in accordance with Article 

16 of the Prospectus Directive modifies or supersedes such statement. 

The Issuer will provide, without charge, to each person to whom a copy of this Offering Circular has 

been delivered, upon the request of such person, a copy of any or all of the documents deemed to be 

incorporated herein by reference unless such documents have been modified or superseded as specified 

above, in which case the modified or superseding version of such document will be provided. Requests for 

such documents should be directed to the Issuer at its office set out at the end of this Offering Circular. In 

addition, such documents will be available, without charge, from the principal office in the Netherlands of 

Rabobank International (as Euronext Amsterdam Listing Agent) for Notes listed on Euronext Amsterdam and 

from the principal office in England of the Arranger and of the paying agent in Luxembourg. 

Supplemental offering circular 

This Offering Circular is a base prospectus for purposes of the Prospectus Directive and Dutch 

securities laws and has been approved by the Netherlands Authority for the Financial Markets (AFM) on 

May 31, 2006 in accordance with the provisions of the Prospectus Directive and Dutch securities laws. 

The Issuer has agreed, in connection with any listing of the Notes on the Luxembourg Stock Exchange, 

to supply the Luxembourg Stock Exchange with such documents and information as may be necessary in 

connection with the listing of the Notes on the Luxembourg Stock Exchange. The Issuer will prepare a 

revised or Supplemental Offering Circular setting out the changes in the operations and financial condition 

of the Issuer at least every year after the date of this Offering Circular and each subsequent Offering Circular. 

The Issuer has given an undertaking to the Dealers that if at any time during the duration of the 

Programme there is a significant new factor, material mistake or inaccuracy relating to information contained 

in this Offering Circular which is capable of affecting the assessment of any Notes and whose inclusion in 

this Offering Circular or removal is necessary for the purpose of allowing an investor to make an informed 

assessment of the assets and liabilities, financial position, profits and losses and prospects of the Issuer and 

of the rights attaching to the Notes, the Issuer shall prepare and publish an amendment or supplement to 

this Offering Circular or a replacement Offering Circular for use in connection with any subsequent offering 

of the Notes and shall supply to each Dealer such number of copies of such supplement hereto as such 

Dealer may reasonably request. 

16

The Notes are being offered and sold outside the United States to non-U.S. persons in reliance on 

Regulation S and (in the case of Restricted Notes issued by Rabobank Nederland) within the United States 

to ‘qualified institutional buyers’ in reliance on Rule 144A under the Securities Act (‘Rule 144A’). Prospective 

purchasers are hereby notified that sellers of Notes may be relying on the exemption from the provisions of 

Section 5 of the Securities Act provided by Rule 144A. For a description of certain restrictions on offers and 

sales of Notes and on distribution of this Offering Circular or any Final Terms or any other offering material 

relating to the Notes, see ‘Plan of Distribution’ and ‘Transfer Restrictions’. 

This Offering Circular does not constitute an offer of, or an invitation by or on behalf of the Issuer or 

the Dealers to subscribe for, or purchase, any Notes. 

The Notes have not been approved or disapproved by the U.S. Securities and Exchange Commission 

(the ‘SEC’), any state securities commission in the United States or any other U.S. regulatory authority, nor 

have any of the foregoing authorities passed upon or endorsed the merits of the offering of the Notes or the 

accuracy or adequacy of this Offering Circular. Any representation to the contrary is a criminal offence in the 

United States. 

The Arranger and the Dealers (excluding Rabobank International) have not separately verified the 

information contained in this Offering Circular. None of the Dealers (excluding Rabobank International) or the 

Arranger makes any representation, express or implied, or accepts any responsibility, with respect to the 

accuracy or completeness of any of the information in this Offering Circular. Neither this Offering Circular nor 

any other financial statements are intended to provide the basis of any credit or other evaluation and should 

not be considered as a recommendation by the Issuer, the Dealers or the Arranger that any recipient of this 

Offering Circular or any other financial statements should purchase the Notes. Prospective investors should 

have regard to the factors described under the section headed ‘Risk Factors’ in this Offering Circular. This 

Offering Circular does not describe all of the risks of an investment in the Notes. Each potential purchaser 

of Notes should determine for itself the relevance of the information contained in this Offering Circular and 

its purchase of Notes should be based upon such investigation as it deems necessary. None of the Dealers 

nor the Arranger undertakes to review the financial condition or affairs of the Issuer during the life of the 

arrangements contemplated by this Offering Circular nor to advise any investor or potential investor in the 

Notes of any information coming to the attention of any of the Dealers or the Arranger. 

In connection with the issue of any tranche of a Series of Notes (a ‘Tranche’), the Dealer or Dealers (if 

any) named as the stabilising manager(s) (the ‘Stabilising Manager(s)’) (or persons acting on behalf of any 

Stabilising Manager(s)) in the applicable Final Terms may over-allot Notes (provided that, in the case of any 

Tranche to be admitted to trading on Euronext Amsterdam or the Luxembourg Stock Exchange, the 

aggregate principal amount of Notes allotted does not exceed 105 per cent. of the aggregate principal 

amount of the relevant Tranche) or effect transactions with a view to supporting the market price of the Notes 

at a level higher than that which might otherwise prevail. However, there is no assurance that the Stabilising 

Manager(s) (or persons acting on behalf of a Stabilising Manager) will undertake stabilisation action. Any 

stabilisation action may begin on or after the date on which adequate public disclosure of the final terms of 

the offer of the relevant Tranche is made and, if begun, may be ended at any time, but it must end no later 

than the earlier of 30 days after the issue date of the relevant Tranche and 60 days after the date of the 

allotment of the relevant Tranche. The audited consolidated financial statements for the year ended 

December 31, 2005 and the corresponding summary figures contained in this Offering Circular have been 

prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the EU 

pursuant to EU Regulation No 1606/2002. The comparative figures for the year ended December 31, 2004 

have been restated accordingly. The financial statements for the year ending December 31, 2004 have also 

been prepared under Dutch GAAP to allow comparison with the 2003 Dutch GAAP figures. 

In this Offering Circular, unless otherwise specified or the context otherwise requires, references to 

‘U.S.$’, ‘US$’, ‘USD’ and ‘U.S. Dollars’ are to the lawful currency of the United States, to ‘AUD’ and 

‘Australian dollars’ are to the lawful currency of Australia, to ‘euro’, ‘EUR’ and ‘€’ are to the lawful currency 

of the member states of the European Union that have adopted the single currency in accordance with the 

Treaty establishing the European Community, as amended by the Treaty on European Union, to ‘sterling’, 

‘pounds sterling’ or ‘£’ are to the lawful currency of the United Kingdom, and to ‘¥’, ‘JPY’ and ‘Yen’ are to 

the lawful currency of Japan. 

TO NEW HAMPSHIRE RESIDENTS: NEITHER THE FACT THAT A REGISTRATION STATEMENT 

OR AN APPLICATION FOR A LICENSE HAS BEEN FILED UNDER CHAPTER 421-B OF THE NEW 

HAMPSHIRE REVISED STATUTES ANNOTATED (‘RSA’) WITH THE STATE OF NEW HAMPSHIRE NOR 

THE FACT THAT A SECURITY IS EFFECTIVELY REGISTERED OR A PERSON IS LICENSED IN THE 

17

STATE OF NEW HAMPSHIRE CONSTITUTES A FINDING BY THE SECRETARY OF STATE OF NEW 

HAMPSHIRE THAT ANY DOCUMENT FILED UNDER RSA 421-B IS TRUE, COMPLETE AND NOT 

MISLEADING. NEITHER ANY SUCH FACT NOR THE FACT THAT AN EXEMPTION OR EXCEPTION IS 

AVAILABLE FOR A SECURITY OR A TRANSACTION MEANS THAT THE SECRETARY OF STATE HAS 

PASSED IN ANY WAY UPON THE MERITS OR QUALIFICATIONS OF, OR RECOMMENDED OR GIVEN 

APPROVAL TO, ANY PERSON, SECURITY OR TRANSACTION. IT IS UNLAWFUL TO MAKE, OR 

CAUSE TO BE MADE, TO ANY PROSPECTIVE PURCHASER, CUSTOMER OR CLIENT ANY 

REPRESENTATION INCONSISTENT WITH THE PROVISIONS OF THIS PARAGRAPH. 

Available information under Rule 144A 

Rabobank Nederland is exempt from reporting pursuant to Rule 12g3-2(b) under the U.S. Securities 

Exchange Act of 1934 (the ‘Exchange Act’). As long as Rabobank Nederland is exempt from reporting 

pursuant to Rule 12g3-2(b) under the Exchange Act, it will furnish its Annual Report and certain other 

periodic reports and information to the SEC. At such time of filing Rabobank Nederland will be exempt from 

providing the information required under Rule 144A(d)(4) described in the paragraph below. Copies of the 

materials furnished to the SEC may be inspected and copied at the public reference facilities maintained by 

the SEC at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549 and will also be 

available for inspection and copying at the regional office of the SEC located at Citicorp Center, 500 West 

Madison Street (Suite 1400), Chicago, Illinois 60661. 

Rabobank Nederland has agreed that, for so long as any Notes issued by it are ‘restricted securities’ 

within the meaning of Rule 144(a)(3) under the Securities Act, it will, during any period in which it is neither 

subject to Section 13 or 15(d) of the Exchange Act nor exempt from reporting pursuant to Rule 12g3-2(b) 

thereunder, provide to any holder or beneficial owner of such restricted securities or to any prospective 

purchaser of such restricted securities designated by such holder or beneficial owner upon the request of 

such holder, beneficial owner or prospective purchaser, the information required to be provided by Rule 

144A(d)(4) under the Securities Act. Rabobank Nederland is not, nor does it intend to become, a reporting 

company under Section 13 or Section 15(d) of the Exchange Act. Any such request for information should 

be directed to Rabobank Nederland at its office set out at the end of this Offering Circular. 

Forward-looking statements 

This Offering Circular includes ‘forward-looking statements’ within the meaning of Section 27A of the 

Securities Act and Section 21E of the Exchange Act. All statements other than statements of historical facts 

included in this Offering Circular, including, without limitation, those regarding the Issuer’s financial position, 

business strategy, plans and objectives of management for future operations (including development plans 

and objectives relating to the Issuer’s products), are forward-looking statements. 

Such forward-looking statements involve known and unknown risks, uncertainties and other factors 

which may cause the actual results, performance or achievements of the Issuer or industry results, to be 

materially different from any future results, performance or achievements expressed or implied by such 

forward-looking statements. Such forward-looking statements are based on numerous assumptions 

regarding the Issuer’s present and future business strategies and the environment in which the Issuer will 

operate in the future. 

The important factors that could cause the Issuer’s actual results, performance or achievements to 

differ materially from those in the forward-looking statements include, among others, changes or downturns 

in the Dutch economy or the economies in other countries in which the Issuer conduct business and the 

impact of fluctuations in foreign exchange rates and interest rates. 

These forward-looking statements speak only as of the date of this Offering Circular. Other than as 

required by law or the rules and regulations of the relevant stock exchange, the Issuer expressly disclaims 

any obligation or undertaking to release publicly any updates or revisions to any forward-looking statement 

contained herein to reflect any change in the Issuer’s expectations with regard thereto or any change in 

events, conditions or circumstances on which any such statement is based. 

Special considerations 

Index Linked Notes are not in any way sponsored, endorsed, sold or promoted by the Sponsor (as 

defined in the ‘Terms and Conditions of the Notes’) and the Sponsor makes no warranty or representation 

whatsoever, express or implied, either as to the results to be obtained from the use of the Index and/or the 

18

figure at which the Index stands at any particular time on any particular day or otherwise. Each Index is 

calculated by a third party independent from the Issuer and, therefore, the Issuer will not accept any liability 

for any act or failure to act by the relevant Sponsor in connection with, among other things, the calculation, 

adjustment, maintenance or cancellation of the Index. 

Equity Linked Notes are not in any way sponsored, endorsed, sold or promoted by the issuer of the 

Underlying Securities and the issuer of the Underlying Securities makes no warranty or representation 

whatsoever, express or implied, as to the future performance of the Underlying Securities. 

The Issuer, including its branches and any group company, is acting solely in the capacity of an arm’s 

length contractual counterparty and not as a purchaser’s financial adviser or fiduciary in any transaction 

unless the Issuer has agreed to do so in writing. 

A prospective purchaser may not rely on the Issuer, the Dealers or any of their respective affiliates in 

connection with its determination as to the legality of its acquisition of the Notes or as to the other matters 

referred to above and none of the Issuer nor the Dealers nor any of their respective affiliates has or assumes 

responsibility for the lawfulness of the acquisition of the Notes by a prospective purchaser of the Notes, 

whether under the laws of the jurisdiction of its incorporation or the jurisdiction in which it operates (if 

different), or for compliance by that prospective purchaser with any law, regulation or regulatory policy 

applicable to it. 

19

GENERAL DESCRIPTION OF THE PROGRAMME 

The following general description does not purport to be complete and is taken from, and is qualified 

in its entirety by, the remainder of this Offering Circular and, in relation to the terms and conditions of any 

particular Tranche of Notes, the applicable Final Terms. Words and expressions defined in ‘Terms and 

Conditions of the Notes’ below shall have the same meanings in this general description. The Bank may 

agree with any Dealer that Notes may be issued in a form other than that contemplated in ‘Terms and 

Conditions of the Notes’ herein, in which event (in the case of listed Notes only) a supplement to this Offering 

Circular, if appropriate, will be made available which will describe the effect of the agreement reached in 

relation to such Notes. 

The following general description is qualified in its entirety by the remainder of this Offering Circular. 

Issuer: Coöperatieve Centrale Raiffeisen-Boerenleenbank B.A. (Rabobank 

Nederland), including issuing through: 

Coöperatieve Centrale Raiffeisen-Boerenleenbank B.A. (Rabobank 

Nederland) Australia Branch 


Nederland) Singapore Branch 

Description: 


Date: May 31, 2006 

Size: 

Use of proceeds: 

Arranger: 

Dealers: 

Fiscal Agent: 

Up to Euro 80,000,000,000 (or the equivalent in other currencies at the 

date of issue) aggregate nominal amount of Notes outstanding at any one 

time. 

The net proceeds from the issues of the Notes will be used by the Issuer 

in connection with its banking business. 

Credit Suisse Securities (Europe) Limited 

BNP PARIBAS 

Citigroup Global Markets Limited 


International) 


Daiwa Securities SMBC Europe Limited 


J.P. Morgan Securities Ltd. 



Morgan Stanley & Co. International Limited 

UBS Limited 

The Issuer may from time to time terminate the appointment of any Dealer 

under the Programme or appoint additional dealers either in respect of one 

or more Tranches or in respect of the whole Programme. References in this 

Offering Circular to ‘Permanent Dealers’ are to the persons listed above as 

Dealers and to such additional persons that are appointed as dealers in 

respect of the whole Programme (and whose appointment has not been 

terminated) and to ‘Dealers’ are to all Permanent Dealers and all persons 

appointed as a dealer in respect of one or more Tranches. 

Deutsche Bank AG, London Branch 

20

Method of Issue: 

Issue Price: 

Form of Notes: 

The Notes will be issued on a syndicated or non-syndicated basis. The 

Notes will be issued in series (each a ‘Series’) having one or more issue 

dates and on terms otherwise identical (or identical other than in respect 

of the first payment of interest), the Notes of each Series being intended 

to be interchangeable with all other Notes of that Series. Each Series may 

be issued in Tranches on the same or different issue dates. The specific 

terms of each Tranche (which will be supplemented, where necessary, with 

supplemental terms and conditions and, save in respect of the issue date, 

issue price, first interest payment and nominal amount, will be identical to 

the terms of other Tranches of the same Series) will be set out in a Final 

Terms. 

Notes may be issued at their nominal amount or at a discount or premium 

to their nominal amount. Partly Paid Notes may be issued, the issue price 

of which will be payable in two or more instalments. 

The Notes may be issued in bearer form only (‘Bearer Notes’), in bearer 

form exchangeable for Registered Notes (‘Exchangeable Bearer Notes’) or 

in registered form only. Each Tranche of Bearer Notes and Exchangeable 

Bearer Notes will initially be represented by a temporary Global Note, 

without interest coupons, which will be deposited on the issue date with a 

common depositary on behalf of Euroclear and Clearstream, Luxembourg 

or otherwise delivered as agreed between the Issuer and the relevant 

Dealer. No interest will be payable in respect of a temporary Global Note 

except as described under ‘Summary of Provisions Relating to the Notes 

while in Global Form’. Interests in a temporary Global Note will be 

exchangeable for interests in a permanent Global Note or, if so stated in 

the relevant Final Terms, for Definitive Notes, after the date falling 40 days 

after the completion of the distribution of the Tranche as certified in writing 

by the relevant Dealer upon certification as to non-U.S. beneficial 

ownership. Interests in a permanent Global Note will be exchangeable for 

Definitive Notes in bearer form or (in the case of Exchangeable Bearer 

Notes) registered form as described under ‘Summary of Provisions 

Relating to the Notes while in Global Form’. 

Registered Notes will be represented by Certificates, one Certificate being 

issued in respect of each Noteholder’s entire holding of Registered Notes 

of one Series and may be represented by a Global Certificate. Unrestricted 

Notes in registered form will initially be represented by an Unrestricted 

Global Certificate, without interest coupons, which may be deposited on 

the issue date (a) in the case of a Tranche intended to be cleared through 

Euroclear and/or Clearstream, Luxembourg, with a common depositary on 

behalf of Euroclear and Clearstream, Luxembourg or (b) in the case of a 

Tranche intended to be cleared through a clearing system other than or in 

addition to Euroclear and/or Clearstream, Luxembourg, DTC or delivered 

outside a clearing system, as agreed between the Issuer and the relevant 

Dealer. Restricted Notes in registered form will initially be represented by a 

Restricted Global Certificate, without interest coupons, which may be 

deposited on the issue date either (a) with a common depositary on behalf 

of Euroclear and Clearstream, Luxembourg, or (b) with a custodian for, and 

registered in the name of Cede & Co. as nominee for, DTC. Only Rabobank 

Nederland may issue Notes which are offered and sold in the United States 

to qualified institutional buyers pursuant to Rule 144A under the Securities 

Act and are issued as Restricted Notes or Notes represented by a 

Restricted Global Certificate. 

Beneficial interests in Global Certificates held by Euroclear, Clearstream, 

Luxembourg and/or DTC will be shown on, and transfers thereof will be 

effected only through, records maintained by Euroclear, Clearstream, 

Luxembourg and/or DTC and their participants. See ‘Clearing and 

Settlement’. 

21

Clearing Systems: 

Initial Delivery of Notes: 

Currencies: 

Maturities: 

Denomination: 

Fixed Rate Notes: 

Floating Rate Notes: 

The provisions governing the exchange of interests in a Global Note for 

another Global Note and Definitive Notes and the exchange of interests in 

each Global Certificate for individual Certificates are described in 

‘Summary of Provisions Relating to the Notes while in Global Form’. 

Interests in Global Certificates may be exchanged for individual Certificates 

in certain circumstances. See ‘Summary of Provisions relating to the Notes 

while in Global Form’ and ‘Clearing and Settlement’. 

Clearstream, Luxembourg, Euroclear, DTC, Clearstream Banking AG and 

Euroclear France and, in relation to any Tranche, such other clearing 

system as may be agreed between the Issuer, the Fiscal Agent and the 

relevant Dealer. 

On or before the issue date for each Tranche, the Global Note representing 

Bearer Notes or Exchangeable Bearer Notes or the Certificate representing 

Registered Notes may (or, in the case of Notes to be listed on the 

Luxembourg Stock Exchange, shall) be deposited with a common 

depositary for Euroclear and Clearstream, Luxembourg. Global Notes or 

Certificates relating to Notes that are not listed on the Luxembourg Stock 

Exchange may also be deposited with Clearstream Banking AG, Euroclear 

France or any other clearing system or may be delivered outside any 

clearing system provided that, save in the case of delivery to Clearstream 

Banking AG or Euroclear France, the method of such delivery has been 

agreed in advance by the Issuer, the Fiscal Agent and the relevant Dealer. 

Registered Notes that are to be credited to one or more clearing systems 

on issue will be registered in the name of nominees or a common nominee 

for such clearing systems. 

Subject to compliance with all relevant laws, regulations and directives, 

Notes may be issued in any currency agreed between the Issuer and the 

relevant Dealers, except that, as at the date hereof, only Rabobank 

Nederland may issue Notes denominated in Sterling. 

Subject to compliance with all relevant laws, regulations and directives, any 

maturity between seven days and perpetuity. 

Definitive Notes will be in such denominations as may be specified in the 

relevant Final Terms. Registered Notes will be in amounts of the 

denomination or integral multiples thereof specified in the relevant Final 

Terms. Additionally unless otherwise permitted by then current laws and 

regulations, Notes (including Notes denominated in sterling) which have a 

maturity of less than one year and in respect of which the issue proceeds 

are accepted by the Issuer in the United Kingdom or whose issue 

otherwise constitutes a contravention of section 19 of the Financial Service 

and Markets Act 2000 will have a minimum denomination of £100,000 (or 

its equivalent). Individual Certificates will only be available, in the case of 

Notes initially represented by an Unrestricted Global Certificate in amounts 

specified in the applicable Final Terms, and, in the case of Notes initially 

represented by a Restricted Global Certificate and sold pursuant to Rule 

144A under the Securities Act, in amounts of U.S.$100,000 (or its 

equivalent rounded upwards as agreed between the Issuer and the 

relevant Dealer(s)), or higher integral multiples of U.S.$1,000, in certain 

limited circumstances described in ‘Summary of Provisions Relating to the 

Notes while in Global Form’ and ‘Clearing and Settlement’. 

Fixed interest will be payable in arrear on the date or dates in each year 

specified in the relevant Final Terms. 

Floating Rate Notes will bear interest determined separately for each 

Series as follows: (i) on the same basis as the floating rate under a notional 

interest rate swap transaction in the relevant Specified Currency governed 

by an agreement incorporating the 2000 ISDA Definitions published by the 

International Swaps and Derivatives Association, Inc. or (ii) by reference to 

22

EURIBOR, LIBOR, LIBID or LIMEAN or (or such other benchmark as may 

be specified in the relevant Final Terms) as adjusted for any applicable 

margin, or (iii) using any other method of determination as may be provided 

in the Final Terms. Interest periods will be specified in the relevant Final 

Terms. 

Original Issue Discount Notes 

(including Zero Coupon Original Issue Discount Notes may be issued at their nominal amount or at 

Notes): 

a discount and may or may not bear interest. 

Dual Currency Notes: Payments (whether in respect of principal or interest and whether at 

maturity or otherwise) in respect of Dual Currency Notes will be made in 

such currencies, and based on such rates of exchange, as may be 


Equity Linked Notes: Equity Linked Notes may be settled at maturity or otherwise by receipt by 

the Noteholder(s) of an equity linked Final Redemption Amount or by 

delivery of the Underlying Securities, in each case as specified in the 

relevant Final Terms. 

Index Linked Notes: Payments of principal in respect of Index Linked Redemption Notes or of 

interest in respect of Index Linked Interest Notes will be calculated by 

reference to such index and/or formula as may be specified in the relevant 

Final Terms. 

Interest Periods and The length of the interest periods for the Notes and the applicable interest 

Interest Rates: 

rate or its method of calculation may differ from time to time or be constant 

for any Series. Notes may have a maximum interest rate, a minimum 

interest rate, or both. The use of interest accrual periods permits the Notes 

to bear interest at different rates in the same interest period. All such 

information will be set out in the relevant Final Terms. 

Redemption: 

The Final Terms will specify the basis for calculating the redemption 

amounts payable, which may be by reference to a stock, index or formula 

or as otherwise provided in the relevant Final Terms. 

Redemption by Instalments: The Final Terms issued in respect of each issue of Notes that are 

redeemable in two or more instalments will set out the dates on which, and 

the amounts in which, such Notes may be redeemed. 

Other Notes: 

Terms applicable to high interest Notes, low interest Notes, step-up Notes, 

step-down Notes, reverse dual currency Notes, optional dual currency 

Notes, partly-paid Notes and any other type of Note that the Issuer and 

any Dealer or Dealers may agree to issue under the Programme will be set 

out in the relevant Final Terms. 

Optional Redemption: The Final Terms issued in respect of each issue of Notes will state whether 

such Notes may be redeemed prior to their stated maturity at the option 

of the Issuer (either in whole or in part) and/or the holders, and if so the 

terms applicable to such redemption. 

Status of Notes: 

Unless otherwise agreed upon by the Issuer and the relevant Dealer or 

Dealers in respect of any issue as set forth in the relevant Final Terms, the 

Notes will constitute unsubordinated and unsecured obligations of the 

Issuer all as described in ‘Terms and Conditions of the Notes’. 

Subordination: 

If the Issuer and the relevant Dealer or Dealers agree and so specify in the 

relevant Final Terms, and subject to compliance with all relevant laws, 

regulations and directives, the Notes may constitute subordinated and 

unsecured obligations of the Issuer. 

Cross Default: 

See ‘Terms and Conditions of the Notes — Events of Default’. 

Negative Pledge: In respect of Senior Notes only, see ‘Terms and Conditions of the Notes — 

Negative Pledge relating to the Senior Notes’. 

23

Rating: 

Early Redemption: 

Taxation: 

Withholding Tax: 

Risk Factors: 

Governing Law: 

Listing: 

Subscription period: 

Effective yield: 

Selling Restrictions: 

Senior Notes issued under the Programme have been rated AA+ by Fitch 

Ratings Ltd. Senior long term Notes issued under the Programme have 

been rated Aaa by Moody’s and AAA by Standard & Poor’s. Tranches of 

Notes issued under the Programme may be rated or unrated. Where a 

Tranche of Notes is rated, such rating will not necessarily be the same as 

the rating applicable to Senior Notes issued under the Programme and will 

be specified in the relevant Final Terms. A security rating is not a 

recommendation to buy, sell or hold securities and may be subject to 

suspension, reduction or withdrawal at any time by the assigning rating 

agency. 

There have been no recent events particular to Rabobank Nederland 

which are, to a material extent, relevant to the evaluation of its solvency. 

Except as provided in ‘Optional Redemption’ above, Notes will be 

redeemable at the option of the Issuer prior to maturity only for tax reasons. 

See ‘Terms and Conditions of the Notes — Redemption, Purchase and 

Options’. 

Rabobank Nederland is a Dutch resident for tax purposes. For the Dutch 

tax consequences of the Noteholders see ‘Taxation’. 

All payments of principal and interest in respect of the Notes will be made 

free and clear of withholding taxes of the Netherlands, Australia or 

Singapore, as the case may be, subject to the exceptions and limitations 

as described in ‘Terms and Conditions of the Notes — Taxation’. 

The purchase of Notes may involve substantial risks and is suitable only for 

investors who have the knowledge and experience in financial and 

business matters necessary to enable them to evaluate the risks and the 

merits of an investment in the Notes. A description of the material risks 

relating to the Notes and to the Issuer is contained under the heading ‘Risk 

Factors’. 

Dutch law. 

Euronext Amsterdam, the ‘Bourse de Luxembourg’ of the Luxembourg 

Stock Exchange, or as otherwise specified in the relevant Final Terms. As 

specified in the relevant Final Terms, a Series of Notes may be unlisted. 

If applicable, see the relevant Final Terms. 

If applicable, see the relevant Final Terms. 

United States, European Economic Area, United Kingdom, the 

Netherlands, Australia, Singapore, the Republic of France and Japan. See 

‘Plan of Distribution’. 

For the purposes of Regulation S under the Securities Act, Category 2 

selling restrictions shall apply. 

In the case of Bearer Notes offered to non-U.S. persons and certain eligible 

U.S. persons, such Notes will be issued in compliance with U.S. Treas. 

Reg. §1.163-5(c)(2)(i)(D) (the ‘D Rules’) unless (i) the relevant Final Terms 

states that the Notes are issued in compliance with U.S. Treas. Reg. 

§1.163-5(c)(2)(i)(C) (the ‘C Rules’) or (ii) the Notes are issued other than in 

compliance with the D Rules or the C Rules but in circumstances in which 

the Notes will not constitute ‘registration required obligations’ under the 

United States Tax Equity and Fiscal Responsibility Act of 1982 (‘TEFRA’), 

which circumstances will be referred to in the relevant Final Terms as a 

transaction to which TEFRA is not applicable. In the case of a distribution 

under Rule 144A of the Securities Act, Notes will be issued in registered 

form, as defined in U.S. Temp. Treas. Reg. §5f.103-1(c). 

24

Transfer Restrictions: 

There are restrictions on the transfer of Registered Notes offered and sold 

pursuant to Rule 144A under the Securities Act. See ‘Transfer Restrictions’ 

and ‘Plan of Distribution’. 

25

TERMS AND CONDITIONS OF THE NOTES 

The following is the text of the terms and conditions that, subject to completion and amendment and 

as supplemented or varied in accordance with the provisions of the relevant Final Terms, shall be applicable 

to the Notes in definitive form (if any) issued in exchange for the Global Note(s) representing each Series. 

These terms and conditions as completed, amended, supplemented or varied by the Final Terms (and 

subject to simplification by the deletion of non-applicable provisions) (the ‘Conditions’) shall be endorsed 

on such Bearer Notes or on the Certificates relating to such Registered Notes. All capitalised terms that are 

not defined in these Conditions will have the meanings given to them in Part A of the relevant Final Terms. 

Those definitions will be endorsed on the Definitive Notes or Certificates, as the case may be. References 

in the Conditions to ‘Notes’ are to the Notes of one Series only, not to all Notes that may be issued under 

the Programme. 

The Notes are issued pursuant to an Agency Agreement (as amended or supplemented as at the date 

of issue of the Notes (the ‘Issue Date’), the ‘Agency Agreement’) dated May 31, 2006, between 

Coöperatieve Centrale Raiffeisen-Boerenleenbank B.A. (Rabobank Nederland) (‘Rabobank Nederland’ or 

the ‘Issuer’), acting through its head office or through one of the following of its branches, Coöperatieve 

Centrale Raiffeisen-Boerenleenbank B.A. (Rabobank Nederland) Australia Branch (‘Rabobank Australia 

Branch’) and Coöperatieve Centrale Raiffeisen-Boerenleenbank B.A. (Rabobank Nederland) Singapore 

Branch (‘Rabobank Singapore Branch’), Deutsche Bank AG, London Branch as fiscal agent and the other 

agents named in it and with the benefit of a Covenant (as amended or supplemented as at the Issue Date, 

the ‘Covenant’) dated May 31, 2006 executed by the Issuer and the fiscal agent in relation to the Notes. 

The fiscal agent, the paying agents, the registrar, the exchange agent, the transfer agents and the calculation 

agent(s) for the time being (if any) are referred to below, respectively, as the ‘Fiscal Agent’, the ‘Paying 

Agents’ (which expression shall include the Fiscal Agent), the ‘Registrar’, the ‘Exchange Agent’, the ‘Transfer 

Agents’ and the ‘Calculation Agent(s)’. The Noteholders (as defined below), the holders of the interest 

coupons (the ‘Coupons’) relating to interest bearing Notes in bearer form and, where applicable in the case 

of such Notes, talons for further Coupons (the ‘Talons’) (the ‘Couponholders’) and the holders of the receipts 

for the payment of instalments of principal (the ‘Receipts’) relating to Notes in bearer form of which the 

principal is payable in instalments (the ‘Receiptholders’) are deemed to have notice of all of the provisions 

of the Agency Agreement applicable to them. 

Copies of the Agency Agreement and the Covenant are available for inspection at the specified offices 

of each of the Paying Agents, the Registrar and the Transfer Agents. 

As used in these Conditions, ‘Tranche’ means Notes which are identical in all respects. 

1. Definitions 

(a) In these Conditions, unless the context otherwise requires, the following defined terms shall have 

the meanings set out below: 

‘Affected Underlying Securities’ has the meaning contained in Condition 7(f)(iii). 

‘Amortisation Yield’ shall have the meaning contained in Condition 7(b)(i)(B). 

‘Amortised Face Amount’ shall have the meaning contained in Condition 7(b)(i)(B). 

‘Basket’ means, in respect of Index Linked Notes, a Basket comprised of each Index specified 

in the Final Terms in the relative weighting specified in the Final Terms, and in respect of Equity 

Linked Notes, a Basket comprised of each Underlying Security specified in the Final Terms in the 

relative proportion/number specified in the Final Terms. 

‘Bearer Notes’ shall have the meaning contained in Condition 2. 

‘Broken Amount’ means, in respect of any Interest Payment Date, the amount specified in the 


‘Business Centre(s)’ shall have the meaning given to it in the relevant Final Terms. 

‘Business Day’ means: 

(i) in the case of a currency other than euro, a day (other than a Saturday or Sunday) on which 

commercial banks and foreign exchange markets settle payments in the principal financial 

centre for such currency (which in the case of Australian Dollars shall be Sydney and in the 

case of New Zealand Dollars shall be Wellington); and/or 

26

(ii) in the case of a currency and/or one or more Business Centres, a day (other than a Saturday 

or Sunday) on which commercial banks and foreign exchange markets settle payments in 

such currency in the Business Centre(s) or, if no currency is indicated, generally in each of 

the Business Centre(s); and/or 

(iii) in the case of euro, a day on which the TARGET system is operating (a ‘TARGET Business 

Day’). 

‘Certificates’ shall have the meaning contained in Condition 2. 

‘Clearing System Business Day’ means, in respect of a clearing system, any day on which such 

clearing system is (or, but for the occurrence of a Settlement Disruption Event, would have been) 

open for the acceptance and execution of settlement instructions. ‘Company’ means, in respect 

of an Underlying Security, the issuer of the Underlying Securities specified as such in the relevant 

Final Terms. 

‘Control’ shall have the meaning contained in Condition 14(e)(v). 

‘Conversion Right’ means, in respect of any Series, the right of the Noteholders, as specified in 

the relevant Final Terms, to have any Notes redeemed either by delivery of the Underlying 

Securities or by payment of the Equity Linked Redemption Amount, all in accordance with and 

subject to the provisions of these Conditions. 

‘Day Count Fraction’ means, in respect of the calculation of an amount of interest on any Note 

for any period of time (from and including the first day of such period to but excluding the last) 

(whether or not constituting an Interest Period, the ‘Calculation Period’): 

(i) if ‘Actual/365’ or ‘Actual/Actual-ISDA’ is specified hereon, the actual number of days in the 

Calculation Period divided by 365 (or, if any portion of that Calculation Period falls in a leap 

year, the sum of: 

(A) the actual number of days in that portion of the Calculation Period falling in a leap year 

divided by 366; and 

(B) the actual number of days in that portion of the Calculation Period falling in a non-leap 

year divided by 365); 

(ii) if ‘Actual/365 (Fixed)’ is specified hereon, the actual number of days in the Calculation Period 

divided by 365; 

(iii) if ‘Actual/360’ is specified hereon, the actual number of days in the Calculation Period 

divided by 360; 

(iv) if ‘30/360’, ‘360/360’ or ‘Bond Basis’ is specified hereon, the number of days in the 

Calculation Period divided by 360 (the number of days to be calculated on the basis of a 

year of 360 days with 12 30-day months (unless (a) the last day of the Calculation Period is 

the 31st day of a month but the first day of the Calculation Period is a day other than the 

30th or 31st day of a month, in which case the month that includes that last day shall not 

be considered to be shortened to a 30-day month, or (b) the last day of the Calculation 

Period is the last day of the month of February, in which case the month of February shall 

not be considered to be lengthened to a 30-day month)); 

(v) if ‘30E/360’ or ‘Eurobond Basis’ is specified hereon, the number of days in the Calculation 

Period divided by 360 (the number of days to be calculated on the basis of a year of 360 

days with 12 30-day months, without regard to the date of the first day or last day of the 

Calculation Period unless, in the case of a Calculation Period ending on the Maturity Date, 

the Maturity Date is the last day of the month of February, in which case the month of 

February shall not be considered to be lengthened to a 30-day month); and 

(vi) if ‘Actual/Actual-ICMA’ is specified hereon, 

(a) if the Calculation Period is equal to or shorter than the Determination Period during 

which it falls, the number of days in the Calculation Period divided by the product of 

(x) the number of days in such Determination Period and (y) the number of 

Determination Periods normally ending in any year; and 

27

(b) if the Calculation Period is longer than one Determination Period, the sum of: 

(x) the number of days in such Calculation Period falling in the Determination Period 

in which it begins divided by the product of (1) the number of days in such 

Determination Period and (2) the number of Determination Periods normally 

ending in any year; and 

(y) the number of days in such Calculation Period falling in the next Determination 

Period divided by the product of (1) the number of days in such Determination 

Period and (2) the number of Determination Periods normally ending in any year. 

‘Delisting’ means, in respect of an Underlying Security, that the Exchange announces that, 

pursuant to the rules of such Exchange, the Underlying Security ceases (or will cease) to be listed, 

traded or publicly quoted on the Exchange for any reason (other than a Merger Event or Tender 

Offer) and is not immediately re-listed, re-traded or re-quoted on an exchange or quotation 

system located in the same country as the Exchange (or, where the Exchange is within the 

European Union, in any member state of the European Union) and such Underlying Security is no 

longer listed on an Exchange acceptable to the Issuer. 

‘Delivery Agent’ means Coöperatieve Centrale Raiffeisen-Boerenleenbank B.A. (Rabobank 

International) or, if different, as specified in the applicable Final Terms. 

‘Delivery Day’ means, in respect of an Underlying Security, a day on which Underlying Securities 

comprised in the Underlying Security Amount may be delivered to Noteholders in the manner 

which the Calculation Agent has determined in its sole and absolute discretion to be appropriate. 

‘Delivery Expenses’ means the expenses, including all costs, taxes, duties and/or expenses 

including stamp duty reserve tax and/or other costs, duties or taxes arising from or in connection 

with the delivery and/or transfer of any Underlying Securities Amount. 

‘Delivery Notice’ means a written notice substantially in such form as the Issuer may determine, 

which must specify the name and address of the relevant Noteholder and the securities account 

in Euroclear, Clearstream, Luxembourg or other clearing system to be credited with the relevant 

Underlying Securities Amount and authorise the production of such notice in any applicable 

administrative or legal proceedings and copies may be obtained from any Agent. 

‘Determination Date’ means the date specified as such hereon or, if none is so specified, the 

Interest Payment Date. 

‘Determination Period’ means the period from and including a Determination Date in any year to 

but excluding the next Determination Date. 

‘Disrupted Day’ means (i) in respect of an Underlying Security or an Index, any Scheduled Trading 

Day on which (a) the Exchange fails to open for trading during its regular trading session, (b) any 

Related Exchange fails to open for trading during its regular trading session or (c) a Market 

Disruption Event has occurred and (ii) in respect of a Multi-Exchange Index, the Sponsor fails to 

publish the level of the Index. 

‘Disruption Cash Settlement Price’ means, in respect of each Note, an amount in the Specified 

Currency equal to the fair market value of the Affected Underlying Securities less the cost to the 

Issuer of unwinding any underlying related hedging arrangements, all as determined by the Issuer 

in its sole and absolute discretion. 

‘Documents’ shall have the meaning contained in Condition 14(c)(i)(a). 

‘DTC’ shall mean the Depository Trust Company or any successor thereto. 

‘Early Closure’ means (i) in respect of an Index, the closure on any Exchange Business Day of 

any relevant Exchange or any Related Exchange prior to its Scheduled Closing Time unless such 

earlier closing time is announced by such Exchange or Related Exchange at least one hour prior 

to the earlier of (a) the actual closing time for the regular trading session on such Exchange or 

Related Exchange on such Exchange Business Day and (b) the submission deadline for orders 

to be entered into the Exchange or Related Exchange system for execution at the Valuation Time 

on such Exchange Business Day and (ii) in respect of an Underlying Security, the closure on any 

Exchange Business Day of any relevant Exchange or any Related Exchange prior to its Scheduled 

Closing Time unless such earlier closing time is announced by such Exchange or Related 

28

Exchange at least one hour prior to the earlier of (a) the actual closing time for the regular trading 

session on such Exchange or Related Exchange on such Exchange Business Day and (b) the 

submission deadline for orders to be entered into the Exchange or Related Exchange system for 

execution at the Valuation Time on such Exchange Business Day. 

‘Equity Linked Interest Note’ means a Note in respect of which the amount in respect of interest 

payable is calculated by reference to an Underlying Security and/or Underlying Securities and/or 

a formula as agreed between the Issuer and the relevant Dealer(s), as indicated in the relevant 

Final Terms. 

‘Equity Linked Note’ means an Equity Linked Interest Note or an Equity Linked Redemption Note. 

‘Equity Linked Redemption Note’ means a Note in respect of which the amount in respect of 

principal payable is calculated by reference to an Underlying Security and/or Underlying Securities 

and/or a formula as agreed between the Issuer and the relevant Dealer(s), as indicated in the 


‘Equity Valuation Date’ means the date or dates specified as such in the relevant Final Terms or 

if that day is not a Scheduled Trading Day for the Underlying Security, the next following day that 

is a Scheduled Trading Day for the Underlying Securities. 

‘Euro-zone’ means the region comprised of member states of the European Union that adopt the 

single currency in accordance with the Treaty establishing the European Community as amended 

by the Treaty on European Union. 

‘Event of Default’ shall have the meaning contained in Condition 13. 

‘Exchange’ means (i) in respect of any securities comprised in an Index, the stock exchange(s) 

(from time to time) on which, in the determination of the Sponsor for the purposes of that Index, 

such securities are listed and (ii) in respect of an Underlying Security, the exchange specified in 

the relevant Final Terms, or such other stock exchange on which such Underlying Security is, in 

the determination of the Calculation Agent, traded or quoted as the Calculation Agent may (in its 

absolute discretion) select and as notified to Noteholders by the Issuer in accordance with 

Condition 17 or (in any such case) any transferee or successor exchange. 

‘Exchange Business Day’ means, in respect of an Underlying Security or an Index, as the case 

may be, any Scheduled Trading Day on which each Exchange and each Related Exchange are 

open for trading during their respective regular trading sessions, notwithstanding any such 

Exchange or Related Exchange closing prior to its Scheduled Closing Time. 

‘Exchange Disruption’ means (i) in respect of an Underlying Security, any event (other than an 

Early Closure) that disrupts or impairs (as determined by the Calculation Agent in its sole and 

absolute discretion) the ability of market participants in general (a) to effect transactions in, or 

obtain market values for, the Underlying Security on the Exchange, or (b) to effect transactions 

in, or obtain market values for, futures or options contracts relating to the Underlying Security on 

any relevant Related Exchange and (ii) in respect of an Index, any event (other than an Early 

Closure) that disrupts or impairs (as determined by the Calculation Agent in its sole and absolute 

discretion) the ability of market participants in general (a) to effect transactions in, or obtain market 

values for, in the case of a Multi-Exchange Index, any security comprised in the Index on any 

relevant Exchange or, in the case of any other Index, securities that comprise 20 per cent. or more 

of the level of the Index on any relevant Exchange or (b) to effect transactions in, or obtain market 

values for, futures or options contracts relating to the relevant Index on any relevant Related 

Exchange. 

‘Exchangeable Bearer Notes’ shall have the meaning contained in Condition 2. 

‘Exercise Notice’ shall have the meaning contained in Condition 7(e). 

‘Extraordinary Dividend’ means, in respect of an Underlying Security, an amount specified or 

otherwise determined as provided in the relevant Final Terms. If no Extraordinary Dividend is 

specified or otherwise determined as provided in the relevant Final Terms, the characterisation of 

a dividend or portion thereof as an Extraordinary Dividend shall be determined by the Calculation 

Agent. 

‘Final Price’ means, in respect of an Underlying Security, the price of one Underlying Security as 

at the Valuation Time on the Valuation Date, determined by the Calculation Agent. 

29

‘Fractional Amount’ means any fractional interest in one Underlying Security to which a 

Noteholder would be entitled pursuant to Condition 7(f)(ii). 

‘Fractional Cash Amount’ means, in respect of each Note and in respect of Underlying Securities 

of a Company, the amount in the Specified Currency (rounded to the nearest smallest transferable 

Unit of such currency, half such a unit being rounded downwards) determined by the Calculation 

Agent in its sole and absolute discretion in accordance with the following formula: 

Fractional Cash Amount = (the Final Price x Fractional Amount x FX Rate). 

Where: 

‘FX Rate’ means, in respect of an Underlying Security, the prevailing spot rate determined by the 

Calculation Agent in its sole and absolute discretion as the number of units of the Specified 

Currency that could be bought with one unit of the currency in which the relevant Underlying 

Security is quoted on the relevant Exchange on the relevant Valuation Date. 

‘Holder’ shall have the meaning contained in Condition 2. 

‘Index’ or ‘Indices’ means, subject to adjustment in accordance with Condition 9, the Index or 

Indices specified as such in the relevant Final Terms. 

‘Index Cancellation’ means, in respect of an Index, that on or prior to any Valuation Date a relevant 

Sponsor cancels the Index and no Successor Index exists. 

‘Index Disruption’ means, in respect of an Index, that on any Valuation Date the Sponsor fails to 

calculate and announce a relevant Index. 

‘Index Linked Interest Note’ means a Note in respect of which the amount in respect of interest 

payable is calculated by reference to an Index and/or Indices and/or a formula as agreed between 

the Issuer and the relevant Dealer(s), as indicated in the relevant Final Terms. 

‘Index Linked Note’ means an Index Linked Interest Note and/or an Index Linked Redemption 

Note. 

‘Index Linked Redemption Note’ means a Note in respect of which the amount in respect of 

principal payable is calculated by reference to an Index and/or Indices and/or a formula as agreed 

between the Issuer and the relevant Dealer(s), as indicated in the relevant Final Terms. 

‘Index Modification’ means, in respect of an Index, that on or prior to any Valuation Date a relevant 

Sponsor announces that it will make (in the opinion of the Calculation Agent) a material change 

in the formula for or the method of calculating that Index or in any other way materially modifies 

that Index (other than a modification prescribed in that formula or method to maintain the Index 

in the event of changes in constituent securities and capitalisation and other routine events). 

‘Index Valuation Date(s)’ means the date or dates specified as such in the relevant Final Terms or 

if that day is not a Scheduled Trading Day for the Underlying Security, the next following day that 

is a Scheduled Trading Day for the Underlying Securities. 

‘Insolvency’ means by reason of the voluntary or involuntary liquidation, bankruptcy, insolvency, 

dissolution or winding-up of, or any analogous proceedings affecting, a Company, at any time (i) 

all the Underlying Securities of such Company are required to be transferred to a trustee, 

liquidator or other similar official or (ii) holders of the Underlying Securities of such Company 

become legally prohibited from transferring them. 

‘Interest’ shall have the meaning contained in Condition 11. 

‘Interest Accrual Period’ means the period beginning on (and including) the Interest 

Commencement Date and ending on (but excluding) the first Interest Period Date and each 

successive period beginning on (and including) an Interest Period Date and ending on (but 

excluding) the next succeeding Interest Period Date. 

‘Interest Amount’ means the amount of interest payable and, in the case of Fixed Rate Notes, 

means the Fixed Coupon Amount or Broken Amount, as the case may be. 

‘Interest Commencement Date’ means the Issue Date or such other date as may be specified in 

the relevant Final Terms. 

30

‘Interest Determination Date’ means, with respect to a Rate of Interest and Interest Accrual 

Period, the date specified in the relevant Final Terms or, if none is so specified, (i) the first day of 

such Interest Accrual Period if the Specified Currency is Sterling, (ii) the day falling two Business 

Days in London for the Specified Currency prior to the first day of such Interest Accrual Period if 

the Specified Currency is neither Sterling nor euro or (iii) the day falling two TARGET Business 

Days prior to the first day of such Interest Accrual Period if the Specified Currency is euro. 

‘Interest Payment Date’ means the date on which interest for the relevant period falls due. 

‘Interest Period’ means the period beginning on (and including) the Interest Commencement Date 

and ending on (but excluding) the first Interest Payment Date and each successive period 

beginning on (and including) an Interest Payment Date and ending on (but excluding) the next 

succeeding Interest Payment Date. 

‘Interest Period Date’ means each Interest Payment Date unless otherwise specified hereon. 

‘ISDA Definitions’ means the 2000 ISDA Definitions published by the International Swaps and 

Derivatives Association, Inc., unless otherwise specified hereon. 

‘Market Disruption Event’ means (i) in respect of an Underlying Security, the occurrence or 

existence on any Scheduled Trading Day of any Trading Disruption or an Exchange Disruption, 

which in either case the Calculation Agent determines in its sole and absolute discretion is 

material, or an Early Closure, and (ii) in respect of an Index, the occurrence or existence on any 

Scheduled Trading Day of a Trading Disruption or an Exchange Disruption, which in either case 

the Calculation Agent determines in its sole and absolute discretion is material, or an Early 

Closure, provided that, in the case of a Multi-Exchange Index, the securities comprised in the 

Index in respect of which a Trading Disruption, Exchange Disruption or an Early Closure occurs 

or exists amount, in the determination of the Calculation Agent, in aggregate to 20 per cent. or 

more of the level of the Index. For the purpose of determining whether a Market Disruption Event 

exists at any time in respect of a security/commodity included in the relevant Index at any time, 

then the relevant percentage contribution of that security/commodity to the level of the Index shall 

be based on a comparison of (i) the portion of the level of the relevant Index attributable to that 

security/commodity relative to (ii) the overall level of the relevant Index, in each case immediately 

before the occurrence of such Market Disruption Event, as determined by the Calculation Agent. 

‘Merger Date’ means the closing date of a Merger Event or, where a closing date cannot be 

determined under the local law applicable to such Merger Event, such other date as determined 

by the Calculation Agent. 

‘Merger Event’ means, in respect of any Underlying Securities, any (i) reclassification or change 

of the Underlying Securities that results in a transfer of or an irrevocable commitment to transfer 

all of such Underlying Securities outstanding, to another entity or person, (ii) consolidation, 

amalgamation, merger or binding share exchange of the relevant Company with or into another 

entity or person (other than a consolidation, amalgamation, merger or binding share exchange in 

which the relevant Company is the continuing entity and which does not result in reclassification 

or change of all of such Underlying Securities outstanding), (iii) takeover offer, tender offer, 

exchange offer, solicitation, proposal or other event by any entity or person to purchase or 

otherwise obtain 100 per cent. of the outstanding Underlying Securities of the relevant Company 

that results in a transfer of or an irrevocable commitment to transfer all of such Underlying 

Securities (other than such Underlying Securities owned or controlled by such other entity or 

person), or (iv) consolidation, amalgamation, merger or binding share exchange of the relevant 

Company or its subsidiaries with or into another entity in which such Company is the continuing 

entity and which does not result in a reclassification or change of all of such Underlying Securities 

outstanding but results in the outstanding Underlying Securities (other than Underlying Securities 

owned or controlled by such other entity) immediately prior to such event collectively representing 

less than 50 per cent. of the outstanding Underlying Securities immediately following such event 

(a ‘Reverse Merger’), in each case if the Merger Date is on or before the relevant Valuation Date. 

‘Multi-Exchange Index’ means an Index in respect of which there is more than one Exchange. 

‘Nationalisation’ means the event in which all the assets or substantially all the assets of a 

Company or the Underlying Securities of such a Company are nationalised, expropriated or are 

otherwise required to be transferred to any governmental agency, authority, entity or 

instrumentality thereof. ‘Noteholder’ shall have the meaning contained in Condition 2. 

31

‘Potential Adjustment Event’ means, with respect to any Company, any of the following: 

(i) a subdivision, consolidation or reclassification of the relevant Underlying Securities (unless 

resulting in a Merger Event) or a free distribution or dividend of any such Underlying 

Securities to existing holders by way of bonus, capitalisation or similar issue; 

(ii) a distribution, issue or dividend to existing holders of the relevant Underlying Securities of 

(a) such Underlying Securities or (b) other share capital or securities granting the right to 

payment of dividends and/or the proceeds of liquidation of the issuer of the Company 

equally or proportionately with such payments to holders of such Underlying Securities or 

(c) share capital or other securities of another issuer acquired or owned (directly or indirectly) 

by the Company as a result of a spin-off or other similar transaction or (d) any other type of 

securities, rights or warrants or other assets, in any case for payment (in cash or otherwise) 

at less than the prevailing market price as determined by the Calculation Agent; 

(iii) an Extraordinary Dividend; 

(iv) a call by it in respect of any Underlying Securities that are not fully paid; 

(v) a repurchase by the Company or any of its subsidiaries of its Underlying Securities, whether 

out of profits or capital and whether the consideration for such repurchase is in cash, new 

shares, securities or otherwise; 

(vi) in respect of the Company, an event that results in any shareholder rights being distributed 

or becoming separated from shares of common stock or other shares of the capital stock 

of the Company pursuant to a shareholder rights plan or arrangement directed against 

hostile takeovers that provides upon the occurrence of certain events for a distribution of 

preferred stock, warrants, debt instruments or stock rights at a price below their market 

value, as determined by the Calculation Agent in its sole and absolute discretion, provided 

that any adjustment effected as a result of such an event shall be readjusted upon any 

redemption of such rights; or 

(vii) any other event that may have, in the opinion of the Calculation Agent, a diluting or 

concentrative effect on the theoretical value of the Underlying Securities. 

‘Presentation Date’ means the date specified in the relevant Final Terms. 

‘Principal’ shall have the meaning contained in Condition 11. 

‘Rate of Interest’ means the rate of interest payable from time to time in respect of this Note and 

that is either specified or calculated in accordance with the provisions hereon. 

‘Record Date’ shall have the meaning contained in Condition 10(b)(ii). 

‘Reference Banks’ means, in the case of a determination of LIBOR, the principal London office 

of four major banks in the London inter-bank market and, in the case of a determination of 

EURIBOR, the principal Euro-zone office of four major banks in the Euro-zone inter-bank market, 

in each case selected by the Calculation Agent or as specified hereon. 

‘Reference Rate’ means the rate specified as such hereon. 

‘Register’ shall have the meaning contained in Condition 2. 

‘Registered Notes’ shall have the meaning contained in Condition 2. 

‘Related Exchange’ means, in respect of an Underlying Security or Index, as the case may be, 

an exchange or quotation system (as specified in the relevant Final Terms or notified from time to 

time to Noteholders in accordance with Condition 17), if any, on which the Underlying Securities, 

the Index or Indices, are traded or quoted, and as may be selected from time to time by the 

Calculation Agent. 

‘Relevant Date’ shall have the meaning contained in Condition 11. 

‘Relevant Screen Page’ means such page, section, caption, column or other part of a particular 

information service as may be specified hereon. 

‘Restricted Global Certificate’ shall mean a permanent registered global certificate which will 

initially represent Registered Notes issued by Rabobank Nederland which are sold in the United 

32

States to qualified institutional buyers within the meaning of Rule 144A under the United States 

Securities Act of 1933 (the ‘Securities Act’). 

‘Reverse Conversion Right’ means the right of the Issuer, as specified in the relevant Final Terms, 

to redeem any Notes either by delivery of Underlying Securities or by payment of the Equity Linked 

Redemption Amount, all in accordance with and subject to the provisions of these Conditions. 

’Reverse Merger’ has the meaning given to it in the definition of Merger Event. 

‘Scheduled Closing Time’ means, in respect of an Exchange or Related Exchange and a 

Scheduled Trading Day, the scheduled weekday closing time of such Exchange and Related 

Exchange on such Scheduled Trading Day, without regard to after hours or any other trading 

outside the hours of the regular trading session. 

‘Scheduled Trading Day’ means, (i) in respect of an Underlying Security or an Index (other than a 

Multi-Exchange Index), any day on which each Exchange and Related Exchange are scheduled 

to be open for trading for their respective trading sessions, and (ii) in respect of a Multi-Exchange 

Index, any day on which the Sponsor is scheduled to publish the level of the Index and each 

Related Exchange is scheduled to be open for trading for its respective trading session. 

‘Senior Note’ means a Note specified as such in the relevant Final Terms. 

‘Settlement Disruption Event’ means, in respect of any Series, (i) an event beyond the control of 

the Issuer as a result of which, in the opinion of the Calculation Agent, delivery of (one of) the 

Underlying Securities comprised in any Underlying Securities Amount by or on behalf of the 

Issuer, in accordance with these Conditions and/or applicable Final Terms, is not reasonably 

practicable; or (ii) the existence of any prohibition or material restriction imposed by applicable 

law (or by order, decree or regulation of any governmental entity, stock exchange or self-regulating 

body having jurisdiction), including prohibitions or restrictions resulting from action taken or not 

taken by the Issuer and/or any Affiliate of the Issuer on the ability of the Issuer or any of its Affiliates 

engaged in hedging transactions relating to the Underlying Securities to transfer the Underlying 

Securities or a particular class of Underlying Securities comprised in any Underlying Securities 

Amount. 

‘Solvency Guidelines’ means the solvency guidelines of the Dutch Central Bank (De 

Nederlandsche Bank N.V.) to which the Issuer is subject. 

‘Specified Currency’ means the currency specified as such hereon or, if none is specified, the 

currency in which the Notes are denominated. 

‘Sponsor’ means, in respect of an Index, the corporation or other entity specified as such in the 


‘Subordinated Notes’ means Tier 2 Notes, Tier 3 Notes and subordinated perpetual Notes. 

‘Substituted Debtor’ shall have the meaning contained in Condition 14(c)(i). 

‘Successor Index’ shall have the meaning contained in Condition 9(a). 

‘Successor Sponsor’ shall have the meaning contained in Condition 9(a). 

‘TARGET Business Day’ means a day on which the TARGET System is open for business. 

‘TARGET System’ means the Trans-European Automated Real-Time Gross Settlement Express 

Transfer (TARGET) System or any successor thereto. 

‘Tender Offer’ means, in respect of any Underlying Security, a takeover offer, tender offer, 

exchange offer, solicitation, proposal or other event by any entity or person that results in such 

entity or person purchasing, or otherwise obtaining or having the right to obtain, by conversion 

or other means, more than 10 per cent. and less than 100 per cent. of the outstanding voting 

shares of the relevant Company, as determined by the Calculation Agent, in its sole and absolute 

discretion, based upon the making of filings with governmental or self-regulatory agencies, or 

such other information as the Calculation Agent determines to be relevant. 

‘Tender Offer Date’ means, in respect of a Tender Offer, the date on which voting shares in the 

amount of applicable thresholds are actually purchased or otherwise obtained, as determined by 

the Calculation Agent in its sole and absolute discretion. 

33

(b) 

‘Tier 2 Notes’ means Subordinated Notes which qualify as ‘Tier 2 Capital’ under the Solvency 

Guidelines. 

‘Tier 3 Notes’ means Subordinated Notes which qualify as ‘Tier 3 Capital’ under the Solvency 

Guidelines. 

‘Trading Disruption’ means (i) in respect of an Underlying Security, any suspension of or limitation 

imposed on trading by the relevant Exchange or Related Exchange or otherwise and whether by 

reason of movements in price exceeding limits permitted by the relevant Exchange or Related 

Exchange or otherwise (a) relating to the Underlying Security on the Exchange or (b) in futures or 

options contracts relating to the Underlying Security on any relevant Related Exchange, and (ii)_in 

respect of an Index, any suspension of or limitation imposed on trading by the relevant Exchange 

or Related Exchange or otherwise and whether by reason of movements in price exceeding limits 

permitted by the relevant Exchange or Related Exchange or otherwise (a) on any relevant 

Exchange(s) relating to (in the case of a Multi-Exchange Index) any security comprised in the Index 

or (in the case of any other Index) securities that compromise 20 per cent. or more of the level of 

the relevant Index or (b) in futures or options contracts relating to the relevant Index on any 

relevant Related Exchange. 

‘Underlying Securities’ means the shares or other securities or different classes of shares or other 

securities specified as such in the relevant Final Terms. 

‘Underlying Securities Amount’ means, subject to Conditions 7 and 8, in respect of each Note, 

the number of Underlying Securities so specified in the relevant Final Terms. 

‘Underlying Securities Delivery Date’ means, in respect of an Underlying Security, subject to 

Condition 7, the Maturity Date or, if such day is not a Delivery Day, the first succeeding day that 

is a Delivery Day. 

‘Unit’ shall have the meaning contained in Condition 6(i)(iii). 

‘Valuation Date’ means each Equity Valuation Date and Index Valuation Date, as applicable. 

‘Valuation Time’ means, the time specified as such in the relevant Final Terms or if no such time 

is specified (i) in respect of an Underlying Security, the close of trading on the relevant Exchange 

in relation to that Underlying Security, or (ii) in respect of an Index the time with reference to which 

the Sponsor calculates the closing level of the Index or, in each case, such other time as the 

Calculation Agent may select and as notified to Noteholders by the Issuer in accordance with 

Condition 17. If the Exchange closes prior to its Scheduled Closing Time and the specified 

Valuation Time is after the actual closing time for its regular trading session, then the Valuation 

Time shall be such actual closing time. 

References to capitalised terms not defined in Condition 1(a) above are to those terms as defined 

in the first paragraph of the preamble to these Conditions or in the relevant Final Terms. 

2. Form, Denomination and Title 

The Notes are issued in bearer form (‘Bearer Notes’, which expression includes Notes that are 

specified to be Exchangeable Bearer Notes), in registered form (‘Registered Notes’) or in bearer form 

exchangeable for Registered Notes (‘Exchangeable Bearer Notes’) in each case in the Specified 

Denomination(s) shown hereon. 

All Registered Notes shall have the same Specified Denomination. Where Exchangeable Bearer 

Notes are issued, the Registered Notes for which they are exchangeable shall have the same Specified 

Denomination as the lowest denomination of Exchangeable Bearer Notes. 

This Note is a Fixed Rate Note, a Floating Rate Note, a Zero Coupon Note, an Index Linked 

Interest Note, an Index Linked Redemption Note, an Equity Linked Interest Note, an Equity Linked 

Redemption Note, an Instalment Note, a Dual Currency Note or a Partly Paid Note, a combination of 

any of the foregoing or any other kind of Note, depending upon the Interest and Redemption/Payment 

Basis shown hereon. 

This Note is a Senior Note or a Subordinated Note, in each case as indicated in the relevant Final 

Terms. 

34

Bearer Notes are serially numbered and are issued with Coupons (and, where appropriate, a 

Talon) attached, save in the case of Zero Coupon Notes in which case references to interest (other than 

in relation to interest due after the Maturity Date), Coupons and Talons in these Conditions are not 

applicable. Instalment Notes are issued with one or more Receipts attached. 

Registered Notes are represented by registered certificates (‘Certificates’) and, save as provided 

in Condition 3(c), each Certificate shall represent the entire holding of Registered Notes by the same 

holder. Notes issued by Rabobank Nederland and sold in the United States to qualified institutional 

buyers pursuant to Rule 144A under the Securities Act will initially be represented by a Restricted 

Global Certificate in registered form. 

Title to the Bearer Notes and the Receipts, Coupons and Talons appertaining thereto shall pass 

by delivery and title to the Registered Notes shall pass by registration in the register which the Issuer 

shall procure to be kept by the Registrar in accordance with the provisions of the Agency Agreement 

(the ‘Register’), unless applicable law provides otherwise or provides for additional formalities for 

transfer of title. In so far as applicable law requires notification to the debtor for a valid transfer of title 

to the Registered Notes, the registration of the transfer by the Registrar shall constitute evidence of 

this notification. Except as ordered by a court of competent jurisdiction or as required by law, the holder 

(as defined below) of any Note, Receipt, Coupon or Talon shall be deemed to be and may be treated 

as its absolute owner for all purposes, whether or not it is overdue and regardless of any notice of 

ownership, trust or an interest in it, any writing on it (or on the Certificate representing it) or its theft or 

loss (or that of the related Certificate) and no person shall be liable for so treating the holder.

shall be issued to the holder to reflect the exercise of such option or in respect of the balance of 

the holding not redeemed. In the case of a partial exercise of an option resulting in Registered 

Notes of the same holding having different terms, separate Certificates shall be issued in respect 

of those Notes of that holding that have the same terms. New Certificates shall only be issued 

against surrender of the existing Certificates to the Registrar or any Transfer Agent. In the case 

of a transfer of Registered Notes to a person who is already a holder of Registered Notes, a new 

Certificate representing the enlarged holding shall only be issued against surrender of the 

Certificate representing the existing holding. 

(d) 

(e) 

(f) 

Delivery of New Certificates 

Each new Certificate to be issued pursuant to Conditions 3(a), (b) or (c) shall be available for 

delivery within three business days of receipt of the request for exchange, form of transfer or 

Exercise Notice or surrender of the Certificate for exchange. Delivery of the new Certificate(s) shall 

be made at the specified office of the Transfer Agent or the Registrar (as the case may be) to 

whom delivery or surrender of such request for exchange, form of transfer, Exercise Notice or 

Certificate shall have been made or, at the option of the holder making such delivery or surrender 

as aforesaid and as specified in the relevant request for exchange, form of transfer, Exercise 

Notice or otherwise in writing, be mailed by uninsured post at the risk of the holder entitled to the 

new Certificate to such address as may be so specified, unless such holder requests otherwise 

and pays in advance to the relevant Agent (as defined in the Agency Agreement) the costs of such 

other method of delivery and/or such insurance as it may specify. In this Condition 3(d), ‘business 

day’ means a day, other than a Saturday or Sunday, on which banks are open for business in the 

place of the specified office of the relevant Transfer Agent or the Registrar (as the case may be). 

Exchange Free of Charge 

Exchange and transfer of Notes and Certificates on registration, transfer, partial redemption or 

exercise of an Option shall be effected without charge by or on behalf of the Issuer, the Registrar 

or the Transfer Agents, but upon payment of any tax or other governmental charges that may be 

imposed in relation to it (or the giving of such indemnity as the Registrar or the relevant Transfer 

Agent may require). 

Closed Periods 

No Noteholder may require the transfer of a Registered Note to be registered or an Exchangeable 

Bearer Note to be exchanged for one or more Registered Note(s) (i) during the period of 15 days 

ending on the due date for redemption of, or payment of any Instalment Amount in respect of, 

that Note, (ii) during the period of 15 days before any date on which Notes may be called for 

redemption by the Issuer at its option pursuant to Condition 7(d), or (iii) after any such Note has 

been called for redemption. An Exchangeable Bearer Note called for redemption may, however, 

be exchanged for one or more Registered Note(s) in respect of which the Certificate is 

simultaneously surrendered not later than the relevant Record Date. 

4. Status of Notes 

(a) 

(b) 

Senior Notes 

The Senior Notes and the Receipts and Coupons relating to them constitute unsubordinated and 

(subject to Condition 5) unsecured obligations of the Issuer and such Senior Notes or, as the case 

may be, Receipts and Coupons of that Issuer shall at all times rank pari passu and without any 

preference among themselves (save for certain mandatory exceptions provided by law). The 

payment obligations of the Issuer under the Senior Notes and the Receipts and Coupons relating 

to them shall, save for such exceptions as may be provided by applicable law and subject to 

Condition 5, at all times rank equally with all other unsecured and unsubordinated indebtedness 

and monetary obligations of the Issuer, present and future. 

Subordinated Notes 

Subject to exceptions provided by mandatory applicable law, the payment obligations under each 

of the Subordinated Notes constitute unsecured obligations of the Issuer and shall, in case of (a) 

the bankruptcy of the Issuer; (b) a situation in which an ‘emergency’ (noodregeling) as 

36

contemplated in Chapter X of the Dutch Act on the Supervision of the Credit System 1992 (Wet 

toezicht kredietwezen 1992), as modified or re-enacted from time to time, (such situation 

hereinafter being referred to as a ‘Moratorium’) is applicable to the Issuer; or (c) dissolution 

(ontbinding) of the Issuer, rank: 

(i) subordinate and junior only to present and future unsubordinated indebtedness of the 

Issuer; 

(ii) pari passu amongst themselves and with any other present and future indebtedness which 

ranks by or under its own terms or otherwise, pari passu with the Subordinated Notes; and 

(iii) senior to any other present and future indebtedness which ranks by or under its own terms 

or otherwise, subordinate or junior to the Subordinated Notes. 

By virtue of such subordination (i) payments to the holders of the Subordinated Notes will, in case 

of bankruptcy or dissolution of the Issuer or in the event of a Moratorium with respect to the Issuer, 

only be made after all payment obligations of the Issuer ranking senior to the Subordinated Notes 

have been satisfied, (ii) any right of set-off by the holder of any Subordinated Note in respect of 

any amount owed to such holder by the Issuer under or in connection with such Subordinated 

Note shall be excluded and (iii) each holder of a Subordinated Note shall, by virtue of being the 

holder of any Subordinated Note, be deemed to have waived all such rights of set-off. 

5. Negative Pledge relating to the Senior Notes 

So long as any of the Senior Notes, Receipts or Coupons remain outstanding (as defined in the 

Agency Agreement), the Issuer undertakes not to secure any of its other indebtedness, whether 

present or future, which is both (a) represented by bonds, notes or other securities which have an initial 

life exceeding two years and which are for the time being, or are intended to be, quoted, listed, 

ordinarily dealt in or traded on any stock exchange or over-the-counter or other similar securities 

market and (b) not Domestic Indebtedness. 

In this Condition 5, ‘Domestic Indebtedness’ means the indebtedness as referred to under (a) 

above of the Issuer which is denominated or payable (at the option of any party) in euro unless 50 per 

cent. or more thereof in aggregate principal amount is initially offered or sold outside the Netherlands. 

6. Interest and other Calculations 

(a) 

(b) 

(i) 

(ii) 

Interest on Fixed Rate Notes 

Each Fixed Rate Note bears interest on its outstanding nominal amount from the Interest 

Commencement Date at the rate per annum (expressed as a percentage) equal to the Rate of 

Interest, such interest being payable in arrear on each Interest Payment Date. 

If a Fixed Coupon Amount or a Broken Amount is specified in the relevant Final Terms, the amount 

of interest payable on each Interest Payment Date will amount to the Fixed Coupon Amount or, 

if applicable, the Broken Amount so specified and in the case of the Broken Amount will be 

payable on the particular Interest Payment Date(s) specified in the relevant Final Terms. 

Interest on Floating Rate Notes, Index Linked Interest Notes and Equity Linked Interest 

Notes 

Interest Payment Dates: Each Floating Rate Note, Index Linked Interest Note and Equity Linked 

Interest Note bears interest on its outstanding nominal amount from the Interest Commencement 

Date at the rate per annum (expressed as a percentage) equal to the Rate of Interest, such interest 

being payable in arrear on each Interest Payment Date. Such Interest Payment Date(s) is/are 

either shown hereon as Specified Interest Payment Date(s) or, if no Specified Interest Payment 

Date(s) is/are specified in the relevant Final Terms, ‘Interest Payment Date’ shall mean each date 

which falls the number of months or other period specified in the relevant Final Terms as the 

Interest Period after the preceding Interest Payment Date or, in the case of the first Interest 

Payment Date, after the Interest Commencement Date. 

Business Day Convention: If any date referred to in these Conditions that is specified to be subject 

to adjustment in accordance with a Business Day Convention would otherwise fall on a day that 

is not a Business Day, then, if the Business Day Convention specified is (A) the Floating Rate 

37

(iii) 

Business Day Convention, such date shall be postponed to the next day that is a Business Day 

unless it would thereby fall into the next calendar month, in which event (x) such date shall be 

brought forward to the immediately preceding Business Day and (y) each subsequent such date 

shall be the last Business Day of the month in which such date would have fallen had it not been 

subject to adjustment, (B) the Following Business Day Convention, such date shall be postponed 

to the next day that is a Business Day, (C) the Modified Following Business Day Convention, such 

date shall be postponed to the next day that is a Business Day unless it would thereby fall into 

the next calendar month, in which event such date shall be brought forward to the immediately 

preceding Business Day or (D) the Preceding Business Day Convention, such date shall be 

brought forward to the immediately preceding Business Day. 

Rate of Interest on Floating Rate Notes: The Rate of Interest in respect of Floating Rate Notes for 

each Interest Accrual Period shall be determined in the manner specified in the relevant Final 

Terms and the provisions below relating to ISDA Determination, Screen Rate Determination or 

any other method of determination which may be provided in the relevant Final Terms shall apply 

if specified in the relevant Final Terms. 

(A) ISDA Determination for Floating Rate Notes 

Where ISDA Determination is specified hereon as the manner in which the Rate of Interest is to 

be determined, the Rate of Interest for each Interest Accrual Period shall be determined by the 

Calculation Agent as a rate equal to the relevant ISDA Rate. For the purposes of this subparagraph 

(A), ‘ISDA Rate’ for an Interest Accrual Period means a rate equal to the Floating Rate 

that would be determined by the Calculation Agent under a Swap Transaction under the terms 

of an agreement incorporating the ISDA Definitions and under which: 

(x) the Floating Rate Option is as specified in the relevant Final Terms; 

(y) the Designated Maturity is a period specified in the relevant Final Terms; and 

(z) the relevant Reset Date is the first day of that Interest Accrual Period unless otherwise 


For the purposes of this sub-paragraph (A), ‘Floating Rate’, ‘Calculation Agent’, ‘Floating Rate 

Option’, ‘Designated Maturity’, ‘Reset Date’ and ‘Swap Transaction’ have the meanings given to 

those terms in the ISDA Definitions. 

(B) Screen Rate Determination for Floating Rate Notes 

(x) Where Screen Rate Determination is specified hereon as the manner in which the Rate of 

Interest is to be determined, the Rate of Interest for each Interest Accrual Period will, subject 

as provided below, be either: 

(1) the offered quotation; or 

(2) the arithmetic mean of the offered quotations, 

(expressed as a percentage rate per annum) for the Reference Rate which appears or 

appear, as the case may be, on the Relevant Screen Page as at either 11.00 a.m. (London 

time in the case of LIBOR or Brussels time in the case of EURIBOR) on the Interest 

Determination Date in question as determined by the Calculation Agent. If five or more of 

such offered quotations are available on the Relevant Screen Page, the highest (or, if there 

is more than one such highest quotation, one only of such quotations) and the lowest (or, if 

there is more than one such lowest quotation, one only of such quotations) shall be 

disregarded by the Calculation Agent for the purpose of determining the arithmetic mean of 

such offered quotations. 

If the Reference Rate from time to time in respect of Floating Rate Notes is specified hereon 

as being other than LIBOR or EURIBOR, the Rate of Interest in respect of such Notes will 

be determined as provided hereon. 

(y) if the Relevant Screen Page is not available or, if sub-paragraph (x)(1) applies and no such 

offered quotation appears on the Relevant Screen Page, or, if sub-paragraph (x)(2) applies 

and fewer than three such offered quotations appear on the Relevant Screen Page, in each 

case as at the time specified above, subject as provided below, the Calculation Agent shall 

request, if the Reference Rate is LIBOR, the principal London office of each of the Reference 

38

(z) 

Banks or, if the Reference Rate is EURIBOR, the principal Euro-zone office of each of the 

Reference Banks, to provide the Calculation Agent with its offered quotation (expressed as 

a percentage rate per annum) for the Reference Rate if the Reference Rate is LIBOR, at 

approximately 11.00 a.m. (London time), or if the Reference Rate is EURIBOR, at 

approximately 11.00 a.m. (Brussels time) on the Interest Determination Date in question. If 

two or more of the Reference Banks provide the Calculation Agent with such offered 

quotations, the Rate of Interest for such Interest Period shall be the arithmetic mean of such 

offered quotations as determined by the Calculation Agent; and 

if paragraph (y) above applies and the Calculation Agent determines that fewer than two 

Reference Banks are providing offered quotations, subject as provided below, the Rate of 

Interest shall be the arithmetic mean of the rates per annum (expressed as a percentage) as 

communicated to (and at the request of) the Calculation Agent by the Reference Banks or 

any two or more of them, at which such banks were offered, if the Reference Rate is LIBOR, 

at approximately 11.00 a.m. (London time) or, if the Reference Rate is EURIBOR, at 

approximately 11.00 a.m. (Brussels time) on the relevant Interest Determination Date, 

deposits in the Specified Currency for a period equal to that which would have been used 

for the Reference Rate by leading banks in, if the Reference Rate is LIBOR, the London interbank 

market or, if the Reference Rate is EURIBOR, the Euro-zone inter-bank market, as the 

case may be, or, if fewer than two of the Reference Banks provide the Calculation Agent 

with such offered rates, the offered rate for deposits in the Specified Currency for a period 

equal to that which would have been used for the Reference Rate, or the arithmetic mean 

of the offered rates for deposits in the Specified Currency for a period equal to that which 

would have been used for the Reference Rate, at which, if the Reference Rate is LIBOR, at 

approximately 11.00 a.m. (London time) or, if the Reference Rate is EURIBOR, at 

approximately 11.00 a.m. (Brussels time), on the relevant Interest Determination Date, any 

one or more banks (which bank or banks is or are in the opinion of the Trustee and the Issuer 

suitable for such purpose) informs the Calculation Agent it is quoting to leading banks in, if 

the Reference Rate is LIBOR, the London inter-bank market or, if the Reference Rate is 

EURIBOR, the Euro-zone inter-bank market, as the case may be, provided that, if the Rate 

of Interest cannot be determined in accordance with the foregoing provisions of this 

paragraph, the Rate of Interest shall be determined as at the last preceding Interest 

Determination Date (though substituting, where a different Margin or Maximum or Minimum 

Rate of Interest is to be applied to the relevant Interest Accrual Period from that which 

applied to the last preceding Interest Accrual Period, the Margin or Maximum or Minimum 

Rate of Interest relating to the relevant Interest Accrual Period, in place of the Margin or 

Maximum or Minimum Rate of Interest relating to that last preceding Interest Accrual Period). 

(c) 

(d) 

(e) 

Rate of Interest for Index Linked Interest Notes 

The Rate of Interest in respect of Index Linked Interest Notes for each Interest Accrual Period 

shall be determined in the manner specified in the relevant Final Terms and interest will accrue by 

reference to an Index or a Basket of Indices or formula as specified in the relevant Final Terms. 

Rate of Interest on Equity Linked Notes 

In the case of Equity Linked Notes, the Rate of Interest or amount of interest payable in respect 

of each Interest Accrual Period or on each specified Interest Payment Date, as the case may be, 

shall be determined by reference to an Underlying Security or a Basket of Underlying Securities 

or formula in the manner specified in the relevant Final Terms. 

Zero Coupon Notes 

Where a Note the Interest Basis of which is specified to be Zero Coupon is repayable prior to the 

Maturity Date and is not paid when due, the amount due and payable prior to the Maturity Date 

shall be the Early Redemption Amount of such Note. As from the Maturity Date, the Rate of 

Interest for any overdue principal of such a Note shall be a rate per annum (expressed as a 

percentage) equal to the Amortisation Yield (as described in Condition 7(b)(i)). 

39

(f) 

(g) 

(h) 

(i) 

(j) 

(k) 

Dual Currency Notes 

In the case of Dual Currency Notes, if the rate or amount of interest falls to be determined by 

reference to a Rate of Exchange or a method of calculating the Rate of Exchange, the rate or 

amount of interest payable shall be determined in the manner specified in the relevant Final Terms. 

Partly Paid Notes 

In the case of Partly Paid Notes (other than Partly Paid Notes which are Zero Coupon Notes), 

interest will accrue as aforesaid on the paid-up nominal amount of such Notes and otherwise as 


Accrual of Interest 

Interest shall cease to accrue on each Note on the due date for redemption unless, upon due 

presentation, payment is improperly withheld or refused, in which event interest shall continue to 

accrue (as well after as before judgment) at the Rate of Interest in the manner provided in this 

Condition 6 to the Relevant Date (as defined in Condition 11). 

Margin, Maximum/Minimum Rates of Interest, Instalment Amounts and Redemption 

Amounts and Rounding 

(i) If any Margin is specified hereon (either (x) generally, or (y) in relation to one or more Interest 

Accrual Periods), an adjustment shall be made to all Rates of Interest in the case of (x), or 

the Rates of Interest for the specified Interest Accrual Periods in the case of (y), calculated 

in accordance with paragraph (b) above by adding (if a positive number) or subtracting the 

absolute value (if a negative number) of such Margin subject always to the next paragraph. 

(ii) If any Maximum or Minimum Rate of Interest, Instalment Amount or Redemption Amount is 

specified hereon, then any Rate of Interest, Instalment Amount or Redemption Amount shall 

be subject to such maximum or minimum, as the case may be. 

(iii) For the purposes of any calculations required pursuant to these Conditions (unless 

otherwise specified), (x) all percentages resulting from such calculations shall be rounded, if 

necessary, to the nearest one hundred-thousandth of a percentage point (with halves being 

rounded up), (y) all figures shall be rounded to seven significant figures (with halves being 

rounded up) and (z) all currency amounts that fall due and payable shall be rounded to the 

nearest unit of such currency (with halves being rounded up), save in the case of yen, which 

shall be rounded down to the nearest yen. For these purposes ‘unit’ means the lowest 

amount of such currency that is available as legal tender in the country of such currency. 

Calculations 

The amount of interest payable in respect of any Note for any period shall be calculated by 

multiplying the product of the Rate of Interest and the outstanding nominal amount of such Note 

by the Day Count Fraction, unless an Interest Amount (or a formula for its calculation) is specified 

in respect of such period, in which case the amount of interest payable in respect of such Note 

for such period shall equal such Interest Amount (or be calculated in accordance with such 

formula). Where any Interest Period comprises two or more Interest Accrual Periods, the amount 

of interest payable in respect of such Interest Period shall be the sum of the amounts of interest 

payable in respect of each of those Interest Accrual Periods. 

Determination and Publication of Rates of Interest, Interest Amounts, Final Redemption 

Amounts, Early Redemption Amounts, Optional Redemption Amounts and Instalment 

Amounts 

The Calculation Agent shall as soon as practicable on such date as the Calculation Agent may 

be required to calculate any rate or amount, obtain any quotation or make any determination or 

calculation, determine such rate and calculate the Interest Amounts in respect of each Specified 

Denomination of the Notes for the relevant Interest Accrual Period, calculate the Final Redemption 

Amount, Early Redemption Amount, Optional Redemption Amount or Instalment Amount, obtain 

such quotation or make such determination or calculation, as the case may be, and cause the 

Rate of Interest and the Interest Amounts for each Interest Period and the relevant Interest 

40

Payment Date and, if required to be calculated, the Final Redemption Amount, Early Redemption 

Amount, Optional Redemption Amount or any Instalment Amount to be notified to the Fiscal 

Agent, the Issuer, each of the Paying Agents, the Noteholders, any other Calculation Agent 

appointed in respect of the Notes that is to make a further calculation upon receipt of such 

information and, if the Notes are listed on a stock exchange and the rules of such exchange so 

require, such exchange as soon as possible after their determination but in no event later than (i) 

the commencement of the relevant Interest Period, if determined prior to such time, in the case 

of notification to such exchange of a Rate of Interest and Interest Amount, or (ii) in all other cases, 

the fourth Business Day after such determination. Where any Interest Payment Date or Interest 

Period Date is subject to adjustment pursuant to Condition 6(b)(ii), the Interest Amounts and the 

Interest Payment Date so published may subsequently be amended (or appropriate alternative 

arrangements made by way of adjustment) without notice in the event of an extension or 

shortening of the Interest Period. If the Notes become due and payable under Condition 13, the 

accrued interest and the Rate of Interest payable in respect of the Notes shall nevertheless 

continue to be calculated as previously in accordance with this Condition 6 but no publication of 

the Rate of Interest or the Interest Amount so calculated need be made. The determination of any 

rate or amount, the obtaining of each quotation and the making of each determination or 

calculation by the Calculation Agent(s) shall (in the absence of manifest error) be final and binding 

upon all parties. 

(l) 

(m) 

Calculation Agent 

The Issuer shall procure that there shall at all times be one or more Calculation Agents if provision 

is made for them hereon and for so long as any Note is outstanding (as defined in the Agency 

Agreement). Where more than one Calculation Agent is appointed in respect of the Notes, 

references in these Conditions to the Calculation Agent shall be construed as each Calculation 

Agent performing its respective duties under the Conditions. If the Calculation Agent is unable or 

unwilling to act as such or if the Calculation Agent fails duly to establish the Rate of Interest for 

an Interest Period or Interest Accrual Period or to calculate any Interest Amount, Instalment 

Amount, Final Redemption Amount, Early Redemption Amount or Optional Redemption Amount, 

as the case may be, or to comply with any other requirement, the Issuer shall appoint a leading 

bank or investment banking firm engaged in the interbank market (or, if appropriate, money, swap 

or over-the-counter index options market) that is most closely connected with the calculation or 

determination to be made by the Calculation Agent (acting through its principal London office or 

any other office actively involved in such market) to act as such in its place. The Calculation Agent 

may not resign its duties without a successor having been appointed as aforesaid. 

Deferral of Interest on Tier 3 Notes 

Notwithstanding anything to the contrary contained elsewhere in this Condition 6, interest on the 

Tier 3 Notes will not be payable on any Interest Payment Date if and to the extent that at the time 

of, or as a result of such payment the Issuer’s actual Own Funds (as defined below) would amount 

to less than 100 per cent. of the Issuer’s required minimum amount of Own Funds under the 

Solvency Guidelines. Any interest in respect of the Tier 3 Notes not paid on an interest payment 

Date on which such interest would otherwise be payable will constitute arrears of interest (‘Arrears 

of Interest’) and will become payable and will be paid by the Issuer as soon as and to the extent 

that the Issuer will, after such payment has been made, meet the solvency test referred to in the 

previous sentence. Any Arrears of Interest will also become fully payable on the date of the 

dissolution of the Issuer, the date on which the Issuer is declared bankrupt or the date on which 

a Moratorium is declared in respect of the Issuer. Where any amount of interest or Arrears of 

Interest is not paid in full, each part payment shall be made pro rata to the Tier 3 Noteholders and 

shall be in respect of the interest accrued furthest from the date of payment. Any Arrears of 

Interest shall not themselves bear interest. 

‘Own Funds’ means the amount of shareholders’ and other funds which qualify as actual own 

funds (toetsingsvermogen) under the Solvency Guidelines. 

41

7. Redemption, Purchase and Options 

(a) 

(i) 

(ii) 

(b) 

(i) 

(ii) 

(c) 

Redemption by Instalments and Final Redemption 

Unless previously redeemed, purchased and cancelled as provided in this Condition 7, each Note 

that provides for Instalment Dates and Instalment Amounts shall be partially redeemed on each 

Instalment Date at the related Instalment Amount. The outstanding nominal amount of each such 

Note shall be reduced by the Instalment Amount (or, if such Instalment Amount is calculated by 

reference to a proportion of the nominal amount of such Note, such proportion) for all purposes 

with effect from the related Instalment Date, unless payment of the Instalment Amount is 

improperly withheld or refused, in which case, such amount shall remain outstanding until the 

Relevant Date relating to such Instalment Amount. 

Unless previously redeemed, purchased and cancelled as provided below, each Note shall be 

finally redeemed on the Maturity Date at its Final Redemption Amount (which, unless otherwise 

provided in these Terms and Conditions or in the relevant Final Terms, is its nominal amount) or, 

in the case of a Note falling within paragraph (i) above, its final Instalment Amount. 

Early Redemption 

Zero Coupon Notes 

(A) The Early Redemption Amount payable in respect of any Zero Coupon Note, the Early 

Redemption Amount of which is not linked to an index and/or a formula, upon redemption 

of such Note pursuant to Condition 7(c) or upon it becoming due and payable as provided 

in Condition 13 shall be the Amortised Face Amount (calculated as provided below) of such 

Note unless otherwise specified in the relevant Final Terms. 

(B) Subject to the provisions of sub-paragraph (C) below, the Amortised Face Amount of any 

such Note shall be the scheduled Final Redemption Amount of such Note on the Maturity 

Date discounted at a rate per annum (expressed as a percentage) equal to the Amortisation 

Yield (which, if none is specified in the relevant Final Terms, shall be such rate as would 

produce an Amortised Face Amount equal to the issue price of the Notes if they were 

discounted back to their issue price on the Issue Date) compounded annually. 

(C) If the Early Redemption Amount payable in respect of any such Note upon its redemption 

pursuant to Condition 7(c) or upon it becoming due and payable as provided in Condition 

13 is not paid when due, the Early Redemption Amount due and payable in respect of such 

Note shall be the Amortised Face Amount of such Note as defined in sub-paragraph (B) 

above, except that such sub-paragraph shall have effect as though the reference therein to 

the date on which the Note becomes due and payable were replaced by a reference to the 

Relevant Date. The calculation of the Amortised Face Amount in accordance with this subparagraph 

shall continue to be made (both before and after judgment) until the Relevant 

Date, unless the Relevant Date falls on or after the Maturity Date, in which case the amount 

due and payable shall be the scheduled Final Redemption Amount of such Note on the 

Maturity Date together with any interest that may accrue in accordance with Condition 6(d). 

Where such calculation is to be made for a period of less than one year, it shall be made on 

the basis of the Day Count Fraction specified in the relevant Final Terms. 

Other Notes: The Early Redemption Amount payable in respect of any Note (other than Notes 

described in (i) above), upon redemption of such Note pursuant to Condition 7(c) or upon it 

becoming due and payable as provided in Condition 13, shall be the Final Redemption Amount 

unless otherwise specified in the relevant Final Terms. 

Redemption for Taxation Reasons 

The Notes may be redeemed at the option of the Issuer in whole, but not in part, on any Interest 

Payment Date (if this Note is either a Floating Rate Note, an Index Linked Note or an Equity Linked 

Note) or at any time (if this Note is neither a Floating Rate Note, an Index Linked Note nor an 

Equity Linked Note) (but subject to consent thereto having been obtained from the Dutch Central 

Bank (De Nederlandsche Bank N.V.) in the case of Subordinated Notes) on giving not less than 

30 nor more than 45 days’ notice to the Noteholders (which notice shall be irrevocable), at their 

Early Redemption Amount (as described in Condition 7(b) above) (together with interest accrued 

42

to the date fixed for redemption), if (i) the Issuer has or will become obliged to pay additional 

amounts as provided or referred to in Condition 11 as a result of any change in, or amendment 

to, the laws or regulations of the Netherlands, in respect of any Issuer, Australia in respect of 

Rabobank Australia Branch and Singapore in respect of Rabobank Singapore Branch or any 

political subdivision or any authority thereof or therein having power to tax, or any change in the 

application or official interpretation of such laws or regulations, which change or amendment 

becomes effective on or after the date on which agreement is reached to issue the first Tranche 

of the Notes, and (ii) such obligation cannot be avoided by the Issuer taking reasonable measures 

available to it, provided that no such notice of redemption shall be given earlier than 90 days prior 

to the earliest date on which the Issuer would be obliged to pay such additional amounts were a 

payment in respect of the Notes then due. Before the publication of any notice of redemption 

pursuant to this paragraph, the Issuer shall deliver to the Fiscal Agent a certificate signed by two 

Directors of the Issuer stating that the Issuer is entitled to effect such redemption and setting forth 

a statement of facts showing that the conditions precedent to the right of the Issuer so to redeem 

have occurred, and an opinion of independent legal advisers of recognised standing to the effect 

that the Issuer has or will become obliged to pay such additional amounts as a result of such 

change or amendment. 

(d) 

(e) 

Redemption at the Option of the Issuer 

If Call Option is specified in the relevant Final Terms, the Issuer may, on giving not less than 15 

nor more than 30 days’ irrevocable notice to the Noteholders (or such other notice period as may 

be specified in the relevant Final Terms) redeem all or, if so provided, some of the Notes on any 

Optional Redemption Date. Any such redemption of Notes shall be at their Optional Redemption 

Amount together with interest accrued to the date fixed for redemption. Any such redemption or 

exercise must relate to Notes of a nominal amount at least equal to the Minimum Redemption 

Amount to be redeemed specified hereon and no greater than the Maximum Redemption Amount 

to be redeemed specified hereon. 

All Notes in respect of which any such notice is given shall be redeemed on the date specified in 

such notice in accordance with this Condition 7. 

In the case of a partial redemption, the notice to Noteholders shall also contain the certificate 

numbers of the Bearer Notes, or in the case of Registered Notes shall specify the nominal amount 

of Registered Notes drawn and the holder(s) of such Registered Notes, to be redeemed, which 

shall have been drawn in such place and in such manner as may be fair and reasonable in the 

circumstances, taking account of prevailing market practices, subject to compliance with any 

applicable laws and stock exchange requirements. So long as the Notes are listed on the 

Luxembourg Stock Exchange and the rules of that stock exchange so require, the Issuer shall, 

once in each year in which there has been a partial redemption of the Notes, cause to be 

published either on the website of the Luxembourg Stock Exchange (www.bourse.lu) or in a 

leading newspaper of general circulation in Luxembourg a notice specifying the aggregate 

nominal amount of Notes outstanding and a list of the Notes drawn for redemption but not 

surrendered. 

Redemption at the Option of Noteholders 

If Put Option is specified in the relevant Final Terms, the Issuer shall, at the option of the holder 

of any such Note, upon the holder of such Note giving not less than 15 nor more than 30 days’ 

notice to the Issuer (or such other notice period as may be specified in the relevant Final Terms), 

redeem such Note on the Optional Redemption Date(s) at its Optional Redemption Amount 

together with interest accrued to the date fixed for redemption. 

To exercise such option the holder must deposit (in the case of Bearer Notes) such Note (together 

with all unmatured Receipts and Coupons and unexchanged Talons) with any Paying Agent or (in 

the case of Registered Notes) the Certificate representing such Note(s) with the Registrar or any 

Transfer Agent at its specified office, together with a duly completed option exercise notice 

(‘Exercise Notice’) in the form obtainable from any Paying Agent, the Registrar or any Transfer 

Agent (as applicable) within the notice period. No Note or Certificate so deposited and option 

exercised may be withdrawn (except as provided in the Agency Agreement) without the prior 

consent of the Issuer. 

43

(f) 

(i) 

(ii) 

Delivery of Underlying Securities 

If the relevant Final Terms specifies that the Notes will be redeemed by way of delivery of 

Underlying Securities, the Issuer will transfer, or procure the delivery by the Delivery Agent of, in 

respect of each Note, the Underlying Securities Amount to or to the order of the Noteholder (as 

specified by the Noteholder). In order to obtain delivery of the Underlying Securities Amount, the 

relevant Noteholder must deliver to any Paying Agent, on or before the Presentation Date, the 

relevant Note(s) and a duly completed Delivery Notice. No Delivery Notice may be withdrawn after 

receipt thereof by a Paying Agent. Any determination as to whether such notice has been properly 

completed and delivered shall be made by the relevant Paying Agent, after consultation with the 

Issuer and shall be conclusive and binding on the Issuer and the relevant Noteholder. If the 

relevant Note and the related Delivery Notice are delivered or are deemed to be delivered to any 

Paying Agent on a day that is not a Business Day, such Note and Delivery Notice shall be deemed 

to be delivered on the next following Business Day. 

If the holder of a Note does not deliver the Note and a Delivery Notice, in each case as set out 

above, on or before the Presentation Date as provided above, then the Issuer shall have no 

obligation to make delivery of the Underlying Securities Amount in respect of such Note unless 

and until a duly completed Delivery Notice (together with the relevant Note) are each delivered as 

provided above and delivery of such Underlying Securities Amount shall be made as soon as 

possible thereafter but not earlier than the Underlying Securities Delivery Date. 

All Delivery Expenses shall be for the account of the relevant Noteholder and no delivery and/or 

transfer of any Underlying Securities Amount shall be required to be made until all Delivery 

Expenses have been paid to the satisfaction of the Issuer by such Noteholder. 

For the avoidance of doubt, the relevant holder of a Note shall not be entitled to any additional or 

further payment by reason of the delivery of the Underlying Securities Amount in respect of such 

Note occurring after the Underlying Securities Delivery Date as a result of such Delivery Notice or 

Note being delivered after the Presentation Date. 

The Issuer shall on the Underlying Securities Delivery Date, deliver or procure the delivery of the 

Underlying Securities Amount in respect of each Note to such account at Clearstream, 

Luxembourg, Euroclear or the other clearing system as may be specified in the relevant Delivery 

Notice at the risk and expense of the relevant Noteholder. As used herein, ‘delivery’ in relation to 

any Underlying Securities Amount means the carrying out of the steps required of the Issuer (or 

such person as it may procure to make the relevant delivery) in order to effect the transfer of the 

relevant Underlying Securities Amount in accordance with the relevant Delivery Notice and 

‘deliver’ shall be construed accordingly. The Issuer shall not be responsible for any delay or failure 

in the transfer of such Underlying Securities Amount once such steps have been carried out, 

whether resulting from settlement periods of clearing systems, acts or omissions of registrars, 

incompatible or incorrect information being contained in the Delivery Notice or otherwise and shall 

have no responsibility for the lawfulness of the acquisition of the Underlying Securities comprising 

the Underlying Securities Amount or any interest therein by any Noteholder or any other person. 

Noteholders should note that the actual date on which they become holders of the Underlying 

Securities comprising the Underlying Securities Amount will depend, among other factors, on the 

procedures of the relevant clearing systems and share registrar and the effect of any Settlement 

Disruption Events. 

No Noteholder will be entitled to receive dividends or other distributions declared or paid in 

respect of the Underlying Securities to which such Note gives entitlement or to any other rights 

relating to or arising out of such Underlying Securities if the date on which the Underlying 

Securities are quoted ex-dividend or ex-the relevant right falls before the date on which the 

Underlying Securities are credited into the securities account of the Noteholder. 

Notes to be redeemed in accordance with this Condition 7 to the same Noteholder will be 

aggregated for the purpose of determining the Underlying Securities Amount to which such Notes 

give entitlement (and, for the avoidance of doubt, in the case of a Basket per particular class of 

Underlying Securities comprised in that Basket). The Noteholders will not be entitled to any 

interest or other payment or compensation if and to the extent that the delivery of the Underlying 

Securities Amount will take place after the earlier of the (a) Optional Redemption Date or (b) the 

Maturity Date (as specified in these Conditions). The number of Underlying Securities comprising 

44

(iii) 

(g) 

(h) 

(i) 

the Underlying Securities Amount in respect of a Note will be calculated on the basis of the 

prevailing formula in the relevant Final Terms rounded down to the next whole integral number of 

Underlying Securities. Entitlement to the remaining fractions of Underlying Securities will be 

settled by payment of the Fractional Cash Amount in respect of those fractions rounded up to 

two decimals, as calculated by the Calculation Agent. 

Settlement Disruption 

If the Calculation Agent determines that delivery of any Underlying Securities Amount in respect 

of any Note by the Issuer in accordance with these Conditions is not practicable or permitted by 

reason of a Settlement Disruption Event subsisting, then the Underlying Securities Delivery Date 

in respect of such Note shall be postponed to the first following Delivery Day in respect of which 

no such Settlement Disruption Event is subsisting and notice thereof shall be given to the relevant 

Noteholder by mail addressed to it at the address specified in the relevant Delivery Notice or in 

accordance with Condition 17 provided that the Calculation Agent may determine in its sole 

discretion that the Issuer satisfy its obligations in respect of the relevant Note by delivering or 

procuring the delivery of such Underlying Securities Amount using such other commercially 

reasonable manner as it may select and in such event the Underlying Securities Delivery Date 

shall be such day as the Calculation Agent deems appropriate in connection with delivery of such 

Underlying Securities Amount in such other commercially reasonable and lawful manner. No 

Noteholder shall be entitled to any payment whether of interest or otherwise on such Note in the 

event of any delay in the delivery of the Underlying Securities Amount pursuant to this paragraph 

and no liability in respect thereof shall attach to the Issuer. 

Where a Settlement Disruption Event affects some but not all of the Underlying Securities 

comprising the Underlying Securities Amount, the Underlying Securities Delivery Date for the 

Underlying Securities comprising such Underlying Securities Amount but not affected by the 

Settlement Disruption Event will be the originally designated Underlying Securities Delivery Date. 

For so long as delivery of part or all of the Underlying Securities comprising the Underlying 

Securities Amount (the ‘Affected Underlying Securities’) in respect of any Note is not practicable 

or permitted by reason of a Settlement Disruption Event, then in lieu of physical delivery of the 

Affected Underlying Securities and notwithstanding any other provision hereof, the Issuer may 

elect in its sole discretion to satisfy its obligations in respect of each relevant Note by payment to 

the relevant Noteholder of the Disruption Cash Settlement Price on the third Business Day 

following the date that notice of such election is given to the Noteholders in accordance with 

Condition 17. Payment of the Disruption Cash Settlement Price will be made in such manner as 

shall be notified to the Noteholders in accordance with Condition 17. 

The Issuer shall give notice as soon as practicable to the Noteholders in accordance with 

Condition 17 that a Settlement Disruption Event has occurred. 

Redemption of Equity Linked Notes following Nationalisation, Delisting or Insolvency 

If the Calculation Agent determines that a Nationalisation, Delisting or Insolvency event has 

occurred, the Issuer may, having given: 

(i) not less than 5 days’ notice to the Noteholders in accordance with Condition 17; and 

(ii) not less than 7 days before the giving of the notice referred to in (i) above, notice to the Fiscal 

Agent, redeem all, but not some only, of the Notes then outstanding on the date specified 

in the notice referred to in (i) above at the Early Redemption Amount specified in the relevant 

Final Terms together, if appropriate, with interest accrued to (but excluding) the date of 

redemption. 


Partly Paid Notes will be redeemed, whether at maturity, early redemption or otherwise, in 

accordance with the provisions of this Condition 7 and the provisions specified hereon. 

Purchases 

The Issuer and any of its subsidiaries (with the consent of the Dutch Central Bank in the case of 

Subordinated Notes) may at any time purchase Notes (provided that all unmatured Receipts and 

45

Coupons and unexchanged Talons relating thereto are attached thereto or surrendered therewith) 

in the open market or otherwise at any price. 

(j) 

(k) 

(l) 

Cancellation 

All Notes purchased by or on behalf of the Issuer or any of its subsidiaries (other than Bearer 

Notes purchased in the ordinary course of business of dealing in securities or in the name of 

another party) may be surrendered for cancellation and, in each case, if so surrendered, will be 

cancelled forthwith together with all Notes redeemed by the Issuer (together with all unmatured 

Receipts and Coupons and unexchanged Talons attached thereto or surrendered therewith), and 

may not be reissued or resold and the obligations of the Issuer in respect of any such Notes shall 

be discharged. Notes may be surrendered for cancellation, in the case of Bearer Notes, by 

surrendering each Note, together with all unmatured Receipts and Coupons and all unexchanged 

Talons to the Fiscal Agent and, in the case of Registered Notes, by surrendering the Certificate 

representing such Notes to the Registrar. 

Deferral of Principal of Tier 3 Notes 

The principal of Tier 3 Notes will not be repayable on the due date thereof if and to the extent that 

at the time or as a result of such payment the Issuer’s actual Own Funds (as defined in Condition 

6(l)) would amount to less than 100 per cent of the Issuer’s required minimum amount of Own 

Funds under the Solvency Guidelines. Any principal of Tier 3 Notes not paid on the date on which 

such principal would otherwise be payable will be paid by the Issuer and to the extent that the 

Issuer will meet the solvency test referred to in the previous sentence. Any arrears of principal will 

also become fully payable on the date of the dissolution of the Issuer, the date on which the Issuer 

is declared bankrupt or the date on which a Moratorium is declared in respect of the Issuer. Where 

any amount of interest or principal is paid in part, each part payment shall be made pro rata to 

the Tier 3 Noteholders. Any arrears of principal shall continue to bear interest at the rate applicable 

to the relevant Tier 3 Notes. 

Condition to Early Redemption 

Early redemption of the Subordinated Notes may only be effected after the Issuer has obtained 

the prior written consent of the Dutch Central Bank (De Nederlandsche Bank N.V.). 

8. Provisions Applicable to Equity Linked Notes 

The following provisions apply to Equity Linked Notes: 

(a) 

Adjustments 

As soon as reasonably practicable, following the occurrence of any Potential Adjustment Event 

or where there has been an adjustment to the settlement terms of listed contracts on any 

Underlying Security traded on a Related Exchange, the Calculation Agent shall, in its sole 

discretion, determine (as soon as practicable thereafter) whether such Potential Adjustment Event 

has a diluting or concentrative effect on the theoretical value of the Underlying Security and, if so, 

the appropriate adjustment, if any, to be made to any of these Conditions (including without 

limitation to the Redemption Amount and/or Underlying Securities Amount) in relation to the 

Notes to account for the diluting or concentrative effect of such event or otherwise necessary to 

preserve the economic equivalent of the rights of the Noteholders under the Notes immediately 

prior to such event, such adjustment to be effective as of the date determined by the Calculation 

Agent (provided that no adjustments will be made to account solely for changes in volatility, 

except dividend, stock loan rate or liquidity). 

In determining whether an adjustment should be made as a result of the occurrence of a Potential 

Adjustment Event or adjustment to the settlement terms of listed contracts on any Underlying 

Security, if options contracts or futures contracts on the Underlying Securities are traded on any 

stock exchange, the Calculation Agent may have regard to, but shall not be bound by, any 

adjustment to the terms of the relevant options contract or futures contract made and announced 

by such stock exchange. Any adjustments made in accordance with this Condition shall be 

notified to Noteholders in accordance with Condition 17. 

46

(b) 

(c) 

Disrupted Days 

If the Calculation Agent determines that any Valuation Date is a Disrupted Day in respect of an 

Underlying Security, then the Valuation Date in respect of that Underlying Security will be the first 

succeeding Scheduled Trading Day that is not a Disrupted Day in respect of that Underlying 

Security, unless each of the eight Scheduled Trading Days immediately following the original date 

that, but for the determination by the Calculation Agent of the occurrence of a Disrupted Day, 

would have been such Valuation Date, is a Disrupted Day. In that case, (i) that eighth Scheduled 

Trading Day will be deemed to be the Valuation Date in respect of that Underlying Security, 

notwithstanding the fact that such day is a Disrupted Day, and (ii) the Calculation Agent shall 

determine the price of one such Underlying Security as its good faith estimate of the value for the 

Underlying Security as at the Valuation Time on that eighth Scheduled Trading Day. Such 

determinations shall be notified to Noteholders and any stock exchange on which the Notes are 

listed (if any). 

Consequences of a Merger Event or Tender Offer 

If a Merger Event or Tender Offer, as the case may be, is specified as applicable in the relevant 

Final Terms then on, or after the relevant Merger Date or Tender Offer Date, as the case may be, 

the Calculation Agent shall (i)(A) make such adjustment to the exercise, settlement, payment or 

any other terms of the Notes, as the Calculation Agent determines appropriate to account for the 

economic effect on the Notes of such Merger Event or Tender Offer, as the case may be, (provided 

that no adjustments will be made to account solely for changes in volatility, excepted dividends, 

stock loan rate or liquidity relevant Underlying Securities or to the Notes), which may, but need 

not be determined by reference to the adjustment(s) made in respect of such Merger Event or 

Tender Offer, as the case may be, by an options exchange to options on the relevant Underlying 

Securities traded on such options exchange, and (B) determine the effective date of any 

adjustment or (ii) if the Calculation Agent determines that no adjustment that it could make under 

(i) will produce a commercially reasonable result, then the Issuer shall redeem the Notes at their 

Early Redemption Amount as at the Merger Date or the Tender Offer Date, as the case may be. 

Any adjustment made in accordance with this Condition or any determination made that the 

Notes are to be redeemed in accordance with this Condition shall be notified to Noteholders in 

accordance with Condition 17, together with, in the case of redemption of the Notes, the date of 

such redemption. 

9. Provisions Applicable to Index Linked Notes 

The following provisions apply to Index Linked Notes: 

(a) 

Adjustment 

If the Index or one of the Indices is (i) not calculated and announced by the Sponsor but is 

calculated and published by a successor to the Sponsor (the ‘Successor Sponsor’) acceptable 

to the Calculation Agent or (ii) replaced by a successor index using, in the determination of the 

Calculation Agent, the same or a substantially similar formula for and method of calculation as 

used in the calculation of the relevant Index or (iii) not in existence on or prior to the Valuation 

Date, but the Calculation Agent considers there to be in existence at such time an alternative 

index which, if substituted for the relevant Index, would materially preserve the economic 

equivalent of the rights of the Noteholders under the Notes immediately prior to such substitution, 

then the relevant successor Index (the ‘Successor Index’) will be deemed to be the Index so 

calculated and published by the Successor Sponsor or that successor or the alternative index, 

as the case may be. 

If the Calculation Agent determines in its sole and absolute discretion that an Index Modification, 

Index Cancellation or Index Disruption has occurred, then the Calculation Agent shall determine 

the Rate of Interest, the Final Redemption Amount and/or any other relevant terms, using, in lieu 

of a published level of the relevant Index, the level for the relevant Index as at the relevant Valuation 

Time at the relevant Valuation Date, as determined by the Calculation Agent in accordance with 

the formula for and method of calculating the relevant Index last in effect prior to that change or 

failure, but using only those securities/commodities that comprised the relevant Index 

immediately prior to that change or failure (other than those securities that have since ceased to 

be listed on the relevant stock exchange). 

47

(b) 

(c) 

Correction of the Index 

In the event that the level of the relevant Index published by the Sponsor which is used by the 

Calculation Agent for any calculation or determination made under the Notes is subsequently 

corrected and the correction is published by the Sponsor within 20 days of the original 

publication, the Calculation Agent shall notify the Issuer and the Fiscal Agent of (a) that correction 

and (b) the amount of principal and/or interest (if any) that is payable as a result of that correction 

and as soon as reasonably practicable thereafter, the Issuer shall make payment of such amount 

in accordance with Condition 10. 

Disrupted Days 

If the Calculation Agent determines that any Valuation Date is a Disrupted Day in respect of an 

Index, then the Valuation Date for such Index shall be the first succeeding Scheduled Trading Day 

that is not a Disrupted Day, unless each of the eight Scheduled Trading Days immediately 

following the original date that, but for the determination by the Calculation Agent of the 

occurrence of a Disrupted Day, would have been such Valuation Date, is a Disrupted Day. In that 

case, (i) that eighth Scheduled Trading Day shall be deemed to be the Valuation Date, 

notwithstanding the fact that such day is a Disrupted Day and (ii) the Calculation Agent shall 

determine the level of the Index as at the Valuation Time on that eighth Scheduled Trading Day 

in accordance with the formula for and method of calculating the Index last in effect prior to the 

occurrence of the first Disrupted Day, using the Exchange traded price or quoted price as of the 

Valuation Time on that eighth Scheduled Trading Day of each security/commodity comprised in 

the Index (or, if an event giving rise to a Disrupted Day has occurred in respect of the relevant 

security/commodity on that eighth Scheduled Trading Day, its good faith estimate of the value for 

the relevant security/commodity as of the Valuation Time on that eighth Scheduled Trading Day. 

Such determinations shall be notified to the Noteholders and any stock exchange on which the 

Notes are listed. 

10. Payments and Talons 

(a) Bearer Notes 

Payments of principal and interest in respect of Bearer Notes shall, subject as mentioned below, 

be made against presentation and surrender of the relevant Receipts (in the case of payments of 

Instalment Amounts other than on the due date for redemption and provided that the Receipt is 

presented for payment together with its relative Note), Notes (in the case of all other payments of 

principal and, in the case of interest, as specified in Condition 10(f)(vi)) or Coupons (in the case 

of interest, save as specified in Condition 10(f)(vi)), as the case may be, at the specified office of 

any Paying Agent outside the United States and Australia by a cheque payable in the relevant 

currency drawn on, or, at the option of the holder, by transfer to an account denominated in such 

currency with, a bank in the principal financial centre for such currency, or in the case of euro, in 

a city in which banks have access to the TARGET System and in the case of Japanese yen, the 

transfer shall be to a non-resident Japanese yen account with a bank in Japan (in the case of 

payment to a non-resident of Japan). 

(b) 

Registered Notes 

(i) Payments of principal (which for the purposes of this Condition 10(b) shall include final 

Instalment Amounts but not other Instalment Amounts) in respect of Registered Notes shall 

be made against presentation and surrender of the relevant Certificates at the specified 

office of any of the Transfer Agents or of the Registrar and in the manner provided in 

paragraph (ii) below. 

(ii) Interest (which for the purpose of this Condition 10(b) shall include all Instalment Amounts 

other than final Instalment Amounts) on Registered Notes shall be paid to the person shown 

on the Register at the close of business on the fifteenth day before the due date for payment 

thereof or in case of Registered Notes to be cleared through DTC, on the fifteenth DTC 

business day before the due date for payment thereof (the ‘Record Date’). For the purpose 

of this Condition 10(b), ‘DTC business day’ means any day on which DTC is open for 

business. Payments of interest on each Registered Note shall be made in the relevant 

currency by cheque drawn on a bank mailed to the holder (or to the first-named of joint 

48

(iii) 

holders) of such Note at its address appearing in the Register, provided that no such cheque 

will be mailed to an address in Australia. Upon application by the holder to the specified 

office of the Registrar or any Transfer Agent before the Record Date, such payment of 

interest may be made by transfer to an account in the relevant currency specified by the 

payee with a bank in the principal financial centre for such currency, or in the case of euro, 

in a city in which banks have access to the TARGET System and in the case of Japanese 

yen, the transfer shall be to a non-resident Japanese yen account with a bank in Japan (in 

the case of payment to a non-resident of Japan). 

Payments through DTC: Registered Notes, if specified in the relevant Final Terms, will be 

issued in the form of one or more Global Certificates and may be registered in the name of, 

or in the name of a nominee for, DTC. Payments of principal and interest in respect of 

Registered Notes denominated in U.S. Dollars will be made in accordance with (i) and (ii) 

above. Payments of principal and interest in respect of Registered Notes registered in the 

name of, or in the name of a Nominee for, DTC and denominated in a Specified Currency 

other than U.S. Dollars will be made or procured to be made by the Fiscal Agent in the 

Specified Currency in accordance with the following provisions. The amounts in such 

Specified Currency payable by the Fiscal Agent or its agent to DTC with respect to 

Registered Notes held by DTC or its nominee will be received from the Issuer by the Fiscal 

Agent who will make payments in such Specified Currency by wire transfer of same day 

funds to the designated bank account in such Specified Currency of those DTC participants 

entitled to receive the relevant payment who have made an irrevocable election to DTC, in 

the case of interest payments, on or prior to the third DTC business day after the Record 

Date for the relevant payment of interest and, in the case of payments or principal, at least 

12 DTC business days prior to the relevant payment date, to receive that payment in such 

Specified Currency. The Fiscal Agent, after the Exchange Agent has converted amounts in 

such Specified Currency into U.S. Dollars, will cause the Exchange Agent to deliver such 

U.S. Dollar amount in same day funds to DTC for payment through its settlement system to 

those DTC participants entitled to receive the relevant payment who did not elect to receive 

such payment in such Specified Currency. The Agency Agreement sets out the manner in 

which such conversions are to be made. 

(c) 

(d) 

(e) 

Payments in the United States 

Notwithstanding the foregoing, if any Bearer Notes are denominated in U.S. Dollars, payments in 

respect thereof may be made at the specified office of any Paying Agent in New York City in the 

same manner as aforesaid if (i) the Issuer shall have appointed Paying Agents with specified 

offices outside the United States with the reasonable expectation that such Paying Agents would 

be able to make payment of the amounts on the Notes in the manner provided above when due, 

(ii) payment in full of such amounts at all such offices is illegal or effectively precluded by exchange 

controls or other similar restrictions on payment or receipt of such amounts and (iii) such payment 

is then permitted by United States law, without involving, in the opinion of the Issuer, any adverse 

tax consequence to such Issuer. 

Payments Subject to Fiscal Laws 

All payments are subject in all cases to any applicable fiscal or other laws, regulations and 

directives in the place of payment, but without prejudice to the provisions of Condition 11. No 

commission or expenses shall be charged to the Noteholders or Couponholders in respect of 

such payments. 

Appointment of Agents 

The Fiscal Agent, the Paying Agents, the Registrar, the Transfer Agents, the Exchange Agent and 

the Calculation Agent initially appointed by the Issuer and its respective specified offices are listed 

below. The Fiscal Agent, the Paying Agents, the Registrar, the Transfer Agents, the Exchange 

Agent and the Calculation Agent(s) act solely as agents of the Issuer and do not assume any 

obligation or relationship of agency or trust for or with any Noteholder or Couponholder. The 

Issuer reserves the right at any time to vary or terminate the appointment of the Fiscal Agent, any 

Paying Agent, the Registrar, any Transfer Agent, the Exchange Agent or the Calculation Agent(s) 

and to appoint additional or other Paying Agents or Transfer Agents, provided that the Issuer shall 

49

at all times maintain (i) a Fiscal Agent, (ii) a Registrar in relation to Registered Notes, (iii) a Transfer 

Agent in relation to Registered Notes in Luxembourg, (iv) one or more Calculation Agent(s) where 

the Conditions so require, (v) Paying Agents having specified offices in at least two major 

European cities (including Luxembourg) so long as the Notes are listed on the Luxembourg Stock 

Exchange, (vi) an Exchange Agent, (vii) such other agents as may be required by the rules of any 

other stock exchange on which the Notes may be listed and (viii) a Paying Agent with a specified 

office in a European Union member state that will not be obliged to withhold or deduct tax 

pursuant to European Council Directive 2003/48/EC or any other European Union Directive 

implementing the conclusions of the ECOFIN Council meeting of 26-27 November 2000 on the 

taxation of savings income or any law implementing or complying with, or introduced in order to 

conform to, such Directive. 

In addition, the Issuer shall forthwith appoint a Paying Agent in New York City in respect of any 

Bearer Notes denominated in U.S. Dollars in the circumstances described in paragraph (c) above. 

Notice of any such change or any change of any specified office shall promptly be given to the 

Noteholders. 

(f) 

(g) 

Unmatured Coupons and Receipts and unexchanged Talons 

(i) Upon the due date for redemption of Bearer Notes which comprise Fixed Rate Notes (other 

than Dual Currency Notes, Index Linked Notes or Equity Linked Notes), they should be 

surrendered for payment together with all unmatured Coupons (if any) relating thereto, failing 

which an amount equal to the face value of each missing unmatured Coupon (or, in the case 

of payment not being made in full, that proportion of the amount of such missing unmatured 

Coupon that the sum of principal so paid bears to the total principal due) shall be deducted 

from the Final Redemption Amount, Early Redemption Amount or Optional Redemption 

Amount, as the case may be, due for payment. Any amount so deducted shall be paid in 

the manner mentioned above against surrender of such missing Coupon within a period of 

10 years from the Relevant Date for the payment of such principal (whether or not such 

Coupon has become void pursuant to Condition 12). 

(ii) Upon the due date for redemption of any Bearer Note comprising a Floating Rate Note, Dual 

Currency Note, Index Linked Note or an Equity Linked Note, unmatured Coupons relating 

to such Note (whether or not attached) shall become void and no payment shall be made 

in respect of them. 

(iii) Upon the due date for redemption of any Bearer Note, any unexchanged Talon relating to 

such Note (whether or not attached) shall become void and no Coupon shall be delivered 

in respect of such Talon. 

(iv) Upon the due date for redemption of any Bearer Note that is redeemable in instalments, all 

Receipts relating to such Note having an Instalment Date falling on or after such due date 

(whether or not attached) shall become void and no payment shall be made in respect of 

them. 

(v) Where any Bearer Note that provides that the relative unmatured Coupons are to become 

void upon the due date for redemption of those Notes is presented for redemption without 

all unmatured Coupons and any unexchanged Talon relating to it, and where any Bearer 

Note is presented for redemption without any unexchanged Talon relating to it, redemption 

shall be made only against the provision of such indemnity as the Issuer may require. 

(vi) If the due date for redemption of any Note is not a due date for payment of interest, interest 

accrued from the preceding due date for payment of interest or the Interest Commencement 

Date, as the case may be, shall only be payable against presentation (and surrender if 

appropriate) of the relevant Bearer Note or Certificate representing it, as the case may be. 

Interest accrued on a Note that only bears interest after its Maturity Date shall be payable 

on redemption of such Note against presentation of the relevant Note or Certificate 

representing it, as the case may be. 

Talons 

On or after the Interest Payment Date for the final Coupon forming part of a Coupon sheet issued 

in respect of any Bearer Note, the Talon forming part of such Coupon sheet may be surrendered 

50

at the specified office of the Fiscal Agent in exchange for a further Coupon sheet (and if necessary 

another Talon for a further Coupon sheet) (but excluding any Coupons that may have become 

void pursuant to Condition 12). 

(h) 

Non-Business Days 

If any date for payment in respect of any Note, Receipt or Coupon is not a business day, the 

holder shall not be: 

(A) entitled to payment until the next following business day nor to any interest or other sum in 

respect of such postponed payment; or 

(B) entitled to payment until the next following business day, unless it would thereby fall into the 

next calendar month, in which event such date for payment shall be brought forward to the 

immediately preceding business day, nor to any interest or other sum in respect of such early 

or postponed payment, 

in each case as specified hereon. 

In this paragraph, ‘business day’ means a day (other than a Saturday or a Sunday) on which 

banks and foreign exchange markets are open for business in the relevant place of presentation, 

in such jurisdictions as shall be specified as ‘Financial Centres’ in the relevant Final Terms and: 

(i) (in the case of a payment in a currency other than euro) where payment is to be made by 

transfer to an account maintained with a bank in the relevant currency, on which foreign 

exchange transactions may be carried on in the relevant currency in the principal financial 

centre of the country of such currency (which in the case of Australian Dollars shall be 

Sydney and in the case of New Zealand Dollars shall be Wellington); or 

(ii) (in the case of a payment in euro) which is a TARGET Business Day. 

11. Taxation 

All payments of principal and interest in respect of the Notes, the Receipts and the Coupons shall 

be made free and clear of, and without withholding or deduction for, any taxes, duties, assessments 

or governmental charges of whatever nature imposed, levied, collected, withheld or assessed by or 

within the Netherlands (in the case of Rabobank Nederland, Rabobank Australia Branch and 

Rabobank Singapore Branch), Australia (in the case of Rabobank Australia Branch) and Singapore (in 

the case of Rabobank Singapore Branch), or any authority therein or thereof having power to tax, 

unless such withholding or deduction is required by law. In that event, the Issuer shall pay such 

additional amounts (the ‘Additional Amounts’) as shall result in receipt by the Noteholders and the 

Couponholders of such amounts as would have been received by them had no such withholding or 

deduction been required, except that no Additional Amounts shall be payable with respect to any Note, 

Receipt or Coupon presented for payment: 

(i) in the country of incorporation of the Issuer (or in the case of Rabobank Australia Branch, 

Australia, or in the case of Rabobank Singapore Branch, Singapore) (each, as the case may be, 

a ‘Relevant Taxing Jurisdiction’); 

(ii) In a Relevant Taxing Jurisdiction of the Issuer (wherein and whereof the Issuer is obliged to 

withhold tax) by or on behalf of a holder who is liable to such taxes, duties, assessments or 

governmental charges of whatever nature imposed, levied, collected, withheld or assessed by or 

within such Relevant Taxing Jurisdiction in respect of such Note, Receipt or Coupon by reason 

of such holder having some connection with the Relevant Taxing Jurisdiction of the Issuer other 

than by reason only of holding such Note or Coupon or the receipt of the relevant payment in 

respect thereof; 

(iii) by or on behalf of a holder who could lawfully avoid (but has not so avoided) such deduction or 

withholding by complying, or procuring that any third party complies, with any statutory 

requirements or by making or procuring that a third party makes a declaration of non-residence 

or other similar claim for exemption to any tax authority in the place where the relevant Note (or 

the Certificate representing it), Receipt or Coupon is presented for payment; 

(iv) where such deduction or withholding is imposed on a payment to an individual and is required to 

be made pursuant to European Council Directive 2003/48/EC or any other Directive implementing 

51

the conclusions of the ECOFIN Council meeting of 26-27 November 2000 on the taxation of 

savings income or any law implementing or complying with, or introduced in order to conform to, 

such Directive; 

(v) (except in the case of Registered Notes) by or on behalf of a holder who would have been able 

to avoid such withholding or deduction by presenting the relevant Note, Receipt or Coupon to 

another Paying Agent in a Member State of the European Union; 

(vi) more than 30 days after the Relevant Date except to the extent that the holder thereof would have 

been entitled to such Additional Amounts on presenting the same for payment on the expiry of 

such period of 30 days; 

(vii) if the Issuer and the relevant Dealer or Dealers in respect of any issue as set forth in the relevant 

Final Terms provide hereon that the Notes are Domestic Notes for the purpose of this Condition; 

or 

(viii) in relation to Notes issued by Rabobank Australia Branch, if such Additional Amounts are payable 

by reason of the Noteholder being an associate of the Issuer for the purposes of Section 128F(6) 

of the Income Tax Assessment Act 1936 of Australia. 

As used in these Conditions, ‘Relevant Date’ in respect of any Note, Receipt or Coupon means 

the date on which payment in respect of it first becomes due or (if any amount of the money payable 

is improperly withheld or refused) the date on which payment in full of the amount outstanding is made 

or (if earlier) the date on which notice is duly given to the Noteholders that, upon further presentation 

of the Note (or relative Certificate), Receipt or Coupon being made in accordance with the Conditions, 

such payment will be made, provided that payment is in fact made upon such presentation. References 

in these Conditions to (i) ‘principal’ shall be deemed to include any premium payable in respect of the 

Notes, all Instalment Amounts, Final Redemption Amounts, Early Redemption Amounts, Optional 

Redemption Amounts, Amortised Face Amounts and all other amounts in the nature of principal 

payable pursuant to Condition 7 or any amendment or supplement to it, (ii) ‘interest’ shall be deemed 

to include all Interest Amounts and all other amounts payable pursuant to Condition 6 or any 

amendment or supplement to it and (iii) ‘principal’ and/or ‘interest’ shall be deemed to include any 

Additional Amounts that may be payable under this Condition 11. 

12. Prescription 

Claims against the Issuer for payment of principal or interest in respect of the Notes, Receipts 

and Coupons (which for this purpose shall not include Talons) shall be prescribed and become void 

unless made within five years from the date on which such payment first becomes due. 

13. Events of Default 

If, in the case of an issue of Senior Notes, any of the following events (each an ‘Event of Default’) 

occurs or, in the case of an issue of Subordinated Notes, the event specified in (iv) occurs, the holder 

of any Note may by written notice to the Issuer at its specified office declare such Note to be forthwith 

due and payable, whereupon the Early Redemption Amount of such Note together with accrued 

interest to the date of payment shall become immediately due and payable, unless such Event of 

Default shall have been remedied prior to the receipt of such notice by the Issuer and provided that 

repayment of any Subordinated Note under this Condition will only be effected after the Issuer has 

obtained the prior written consent of the Dutch Central Bank (De Nederlandsche Bank N.V.): 

(i) default by the Issuer is made for more than 30 days in the payment of interest or principal in 

respect of any of the Notes; or 

(ii) the Issuer fails to perform or observe any of its other obligations under the Notes and such failure 

continues for the period of 60 days next following the service on the Issuer of notice requiring the 

same to be remedied; or 

(iii) the Issuer fails in the due repayment of borrowed money which exceeds euro 35,000,000 or its 

countervalue and such failure continues for a period of 30 days after notice of such failure has 

been received by the Issuer or the Issuer fails to honour any guarantee or indemnity in excess of 

euro 35,000,000 or its countervalue and such failure continues for a period of 30 days after notice 

of such failure has been received by the Issuer, provided that in each case no Event of Default 

52

(iv) 

(v) 

(vi) 

shall be deemed to have occurred if the Issuer shall contest its liability in good faith or shall have 

been ordered not to make such payment by a competent court; or 

the Issuer becomes bankrupt, an administrator is appointed, or an order is made or an effective 

resolution is passed for the winding-up, liquidation or administration of the Issuer (except for the 

purposes of a reconstruction or merger the terms of which have previously been approved by a 

meeting of Noteholders) or an application is filed for a declaration (which is not revoked within a 

period of 30 days), or a declaration is made, under Article 71 of the Act on the Supervision of the 

Credit System 1992 (Wet toezicht kredietwezen 1992), as modified or re-enacted from time to 

time, of the Netherlands in respect of Rabobank Nederland, Rabobank Australia Branch or 

Rabobank Singapore Branch; or 

the Issuer compromises with its creditors generally or such measures are officially decreed; or 

the Issuer shall cease to carry on the whole or a substantial part of its business (except for the 

purposes of a reconstruction or merger the terms of which have previously been approved by a 

meeting of the Noteholders). 

14. Meeting of Noteholders, Modifications and Substitutions 

(a) 

(b) 

Meetings of Noteholders 

The Agency Agreement contains provisions for convening meetings of Noteholders to consider 

any matter affecting their interests, including the sanctioning by Extraordinary Resolution (as 

defined in the Agency Agreement) of a modification of any of these Conditions. Such a meeting 

may be convened by the Issuer or Noteholders holding not less than 10 per cent. in nominal 

amount of the Notes for the time being outstanding. The quorum for any meeting convened to 

consider an Extraordinary Resolution shall be two or more persons holding or representing a clear 

majority in nominal amount of the Notes for the time being outstanding, or at any adjourned 

meeting two or more persons being or representing Noteholders whatever the nominal amount 

of the Notes held or represented, unless the business of such meeting includes consideration of 

proposals, inter alia, (i) to amend the dates of maturity or redemption of any of the Notes, any 

Instalment Date or any date for payment of interest or Interest Amounts on the Notes, (ii) to reduce 

or cancel the nominal amount of, or any Instalment Amount of, or any premium payable on 

redemption of, the Notes, (iii) to reduce the rate or rates of interest in respect of the Notes or to 

vary the method or basis of calculating the rate or rates or amount of interest or the basis for 

calculating any Interest Amount in respect of the Notes, (iv) if a Minimum and/or a Maximum Rate 

of Interest is shown hereon, to reduce any such Minimum and/or Maximum, (v) to vary any 

method of, or basis for, calculating the Final Redemption Amount, the Early Redemption Amount 

or the Optional Redemption Amount including the method of calculating the Amortised Face 

Amount, (vi) to vary the currency or currencies of payment or denomination of the Notes or (vii) 

to modify the provisions concerning the quorum required at any meeting of Noteholders or any 

adjournment of such meeting or the majority required to pass the Extraordinary Resolution. Any 

Extraordinary Resolution duly passed shall be binding on Noteholders (whether or not they were 

present at the meeting at which such resolution was passed) and on all Couponholders. 

These Conditions may be amended, modified or varied in relation to any Series of Notes by the 

terms of the relevant Final Terms in relation to such Series. 

Modification and Amendment of Agency Agreement 

The Issuer shall only permit any modification of, or any waiver or authorisation of any breach or 

proposed breach of, or any failure to comply with, the Agency Agreement, if to do so could not 

reasonably be expected to be prejudicial to the interests of the Noteholders. 

The Agency Agreement may be amended by the Issuer and the Fiscal Agent, without the consent 

of the Registrar or any Paying Agent, Transfer Agent, Exchange Agent, Calculation Agent or 

holder, for the purpose of curing any ambiguity or of curing, correcting or supplementing any 

defective provision contained therein or in any manner which the Issuer and the Fiscal Agent may 

mutually deem necessary or desirable and which does not adversely affect the interests of the 

holders. 

53

(c) 

(i) 

Substitution of the Issuer 

The Issuer or any previous substitute of the Issuer under this Condition 14 may, and the 

Noteholders and the Couponholders hereby irrevocably agree in advance that the Issuer or any 

previous substitute of the Issuer under this Condition may, at any time, substitute any company 

(incorporated in any country in the world) controlling, controlled by or under common control with 

Rabobank Nederland as the principal debtor in respect of the Notes or to undertake its 

obligations in respect of the Notes through any of its branches (any such company or branch, the 

‘Substituted Debtor’), provided that: 

(a) such documents shall be executed by the Substituted Debtor and (if the Substituted Debtor 

is not the Issuer) the Issuer or any previous substitute as aforesaid as may be necessary to 

give full effect to the substitution (together the ‘Documents’) and (without limiting the 

generality of the foregoing) pursuant to which the Substituted Debtor shall undertake in 

favour of each Noteholder to be bound by these Conditions and the provisions of the Agency 

Agreement as fully as if the Substituted Debtor had been named in the Notes and the 

Agency Agreement as the principal debtor in respect of the Notes in place of the Issuer or 

any previous substitute as aforesaid; 

(b) without prejudice to the generality of sub-paragraph (a) above, where the Substituted 

Debtor is incorporated, domiciled or resident for taxation purposes in a territory other than 

the Netherlands (where the Issuer is Rabobank Nederland acting through its head office), 

Australia (where the Issuer is Rabobank Australia Branch) or Singapore (where the Issuer is 

Rabobank Singapore Branch), or is undertaking its obligations with respect to the Notes 

through a branch in another such territory, the Documents shall contain a covenant and/or 

such other provisions as may be necessary to ensure that each Noteholder has the benefit 

of a covenant in terms corresponding to the provisions of Condition 11 above with the 

substitution for the references to the Netherlands, Australia or Singapore as appropriate (or 

any previously substituted territory as the case may be) with territories in which the 

Substituted Debtor is incorporated, domiciled and/or resident for taxation purposes or, 

where such Issuer is undertaking its obligations with respect to the Notes through a branch, 

with the addition of references to the territory in which such branch is located; 

(c) the Documents shall contain a warranty and representation (1) that the Substituted Debtor 

and the Issuer (or any previous substitute as aforesaid) have obtained all necessary 

governmental and regulatory approvals and consents for such substitution and (if the 

Substituted Debtor is not Rabobank Nederland) for the giving by Rabobank Nederland of 

the Substitution Guarantee (as defined below) in respect of the obligations of the Substituted 

Debtor, that the Substituted Debtor has obtained all necessary governmental and regulatory 

approvals and consents for the performance by the Substituted Debtor of its obligations 

under the Documents and that all such approvals and consents are in full force and effect 

and (2) that the obligations assumed by the Substituted Debtor and (if the Substituted 

Debtor is not Rabobank Nederland) the Substitution Guarantee (as defined below) given by 

Rabobank Nederland are each valid and binding in accordance with their respective terms 

and enforceable by each Noteholder and that, in the case of the Issuer undertaking its 

obligations with respect to the Notes through a branch, the Notes remain the valid and 

binding obligations of such Issuer; 

(d) Condition 13 shall be deemed to be amended so that it shall also be an Event of Default 

under the said Condition if the Substitution Guarantee (as defined below) shall cease to be 

valid or binding on or enforceable against Rabobank Nederland; and 

(e) a Supplemental Offering Circular produced and (i) submitted to the AFM for approval, and 

(ii) following such approval be published in accordance with Article 14 of the Prospectus 

Directive, 

and (if the Substituted Debtor is not Rabobank Nederland) upon the Documents becoming 

valid and binding obligations of the Substituted Debtor, Rabobank Nederland hereby 

irrevocably and unconditionally guarantees in favour of each Noteholder the payment of all 

sums payable by the Substituted Debtor as such principal debtor (such guarantee of 

Rabobank Nederland herein referred to as the ‘Substitution Guarantee’ and being 

substantially in the form of the Guarantee contained in Schedule 9 of the Agency Agreement, 

which shall apply mutatis mutandis to issues of Notes by the Substituted Debtor). 

54

(ii) 

(iii) 

(iv) 

(v) 

Upon the Documents becoming valid and binding obligations of the Substituted Debtor and (if 

the Substituted Debtor is not the Issuer) the Issuer and subject to notice having been given in 

accordance with paragraph (iv) below, the Substituted Debtor shall be deemed to be named in 

the Notes and Coupons as the principal debtor in place of the Issuer as issuer (or of any previous 

substitute under these provisions) and the Notes and Coupons shall thereupon be deemed to be 

amended to give effect to the substitution. The execution of the Documents together with the 

notice referred to in paragraph (iv) below shall, in the case of the substitution of any other 

company as principal debtor, operate to release the Issuer as issuer (or such previous substitute 

as aforesaid) from all of its obligations as principal debtor in respect of the Notes and Coupons. 

The Documents referred to in paragraph (i) above shall be deposited with and held by the Fiscal 

Agent for so long as any Notes remain outstanding and for so long as any claim made against 

the Substituted Debtor or (if the Substituted Debtor is not the Issuer) the Issuer by any Noteholder 

and Couponholder in relation to the Notes or the Documents shall not have been finally 

adjudicated, settled or discharged. The Substituted Debtor and (if the Substituted Debtor is not 

the Issuer) the Issuer acknowledge the right of every Noteholder to the production of the 

Documents for the enforcement of any of the Notes and Coupons or the Documents. 

Not later than 15 business days after the execution of the Documents, the Substituted Debtor 

shall give notice thereof to the Noteholders in accordance with Condition 17. 

For the purposes of this Condition 14, the term ‘control’ means the possession, directly or 

indirectly, of the power to direct or cause the direction of the management and policies of a 

company, whether by contract or through the ownership, directly or indirectly, of voting shares in 

such company which, in the aggregate, entitle the holder thereof to elect a majority of its directors, 

and includes any company in like relationship to such first-mentioned company, and for this 

purpose ‘voting shares’ means shares in the capital of a company having under ordinary 

circumstances the right to elect the directors thereof, and ‘controlling’, ‘controlled’ and ‘under 

common control’ shall be construed accordingly. 

15. Replacement of Notes, Certificates, Receipts, Coupons and Talons 

If a Note, Certificate, Receipt, Coupon or Talon is lost, stolen, mutilated, defaced or destroyed, it 

may be replaced, subject to applicable laws, regulations and stock exchange regulations, at the 

specified office of the Fiscal Agent (in the case of Bearer Notes, Receipts, Coupons or Talons) and of 

the Registrar (in the case of Certificates) or such other Paying Agent or Transfer Agent, as the case 

may be, as may from time to time be designated by the Issuer for the purpose and notice of whose 

designation is given to Noteholders, in each case on payment by the claimant of the fees and costs 

incurred in connection therewith and on such terms as to evidence, security and indemnity (which may 

provide, inter alia, that if the allegedly lost, stolen or destroyed Note, Certificate, Receipt, Coupon or 

Talon is subsequently presented for payment or, as the case may be, for exchange for further Coupons, 

there shall be paid to the Issuer on demand the amount payable by such Issuer in respect of such 

Notes, Certificates, Receipts, Coupons or further Coupons) and otherwise as such Issuer may require. 

Mutilated or defaced Notes, Certificates, Receipts, Coupons or Talons must be surrendered before 

replacements will be issued. 

16. Further Issues 

The Issuer may from time to time without the consent of the Noteholders or Couponholders 

create and issue further notes which have the same terms and conditions as the Notes (except for the 

Issue Price, the Issue Date and the first Interest Payment Date) and so that the same shall be 

consolidated and form a single series with such Notes, and references in these Conditions to ‘Notes’ 

shall be construed accordingly. 

17. Notices 

Notices to the holders of Registered Notes shall be published in accordance with the procedure 

set out in this Condition for Bearer Notes and shall be mailed to them at their respective addresses in 

the Register and shall be deemed to have been given on the fourth weekday (being a day other than 

a Saturday or a Sunday) after the date of mailing. Notices to the holders of Bearer Notes shall be valid 

if published in a daily newspaper of general circulation in London (which is expected to be the Financial 

Times) and so long as the Notes are listed on Euronext Amsterdam and the rules of such exchange 

55

so require, in the Euronext Daily Official List and a daily newspaper with general circulation in the 

Netherlands and so long as the Notes are listed on the Luxembourg Stock Exchange, published either 

on the website of the Luxembourg Stock Exchange (www.bourse.lu) or in a daily newspaper with 

general circulation in Luxembourg (which is expected to be the d’Wort) respectively. If any such 

publication is not practicable, notice shall be validly given if published in another leading daily English 

language newspaper with general circulation in Europe. The Issuer shall also ensure that notices are 

duly published in a manner which complies with the rules and regulations of any stock exchange on 

which the Notes are for the time being listed. Any such notice shall be deemed to have been given on 

the date of such publication or, if published more than once or on different dates, on the date of the 

first publication as provided above. 

Couponholders and Receiptholders shall be deemed for all purposes to have notice of the 

contents of any notice given to the holders of Bearer Notes in accordance with this Condition 17. 

18. Governing Law and Jurisdiction 

(a) Governing Law 

The Notes, the Receipts, the Coupons and the Talons are governed by, and shall be construed 

in accordance with, the laws of the Netherlands. 

(b) 

(c) 

Jurisdiction 

The competent courts of Amsterdam, the Netherlands (and, in the case of Rabobank Nederland, 

also the United States Federal and New York State courts sitting in New York City, the Borough 

of Manhattan) are to have non-exclusive jurisdiction to settle any disputes which may arise out of 

or in connection with any Notes, Receipts, Coupons or Talons and, accordingly, any legal action 

or proceedings arising out of or in connection with any Notes, Receipts, Coupons or Talons 

(‘Proceedings’) may be brought in such courts. These submissions are made for the benefit of 

each of the holders of the Notes, Receipts, Coupons and Talons and shall not affect the right of 

any of them to take Proceedings in any other court of competent jurisdiction. 

Service of Process 

Rabobank Nederland irrevocably appoints its New York branch at 245 Park Avenue, New York, 

New York 10167 as its agent in New York to receive, for it and on its behalf, service of process 

in any Proceedings in New York. For the avoidance of doubt, service of process upon Rabobank 

Nederland at Croeselaan 18, 3521 CB Utrecht, the Netherlands will also constitute service of 

process upon Rabobank Australia Branch and Rabobank Singapore Branch. Such service shall 

be deemed completed on delivery to the relevant process agent (whether or not it is forwarded 

to and received by Rabobank Nederland). If for any reason either process agent ceases to be 

able to act as such or no longer has an address in Utrecht or New York City, Rabobank Nederland 

irrevocably agrees to appoint a substitute process agent and shall immediately notify Noteholders 

of such appointment in accordance with Condition 17. Nothing shall affect the right to serve 

process in any manner permitted by law. 

56

SUMMARY OF PROVISIONS RELATING TO THE NOTES WHILE IN GLOBAL FORM 

Initial Issue of Notes 

Each Tranche of Notes in bearer form will be initially represented by a temporary Global Note, in bearer 

form without coupons, which will be deposited on behalf of the subscribers of the relevant Notes (a) in the 

case of a Tranche intended to be cleared through Euroclear and/or Clearstream, Luxembourg with a 

common depositary (the ‘Common Depositary’) for Euroclear and Clearstream, Luxembourg, or (b) in the 

case of a Tranche intended to be cleared through an alternative clearing system, as otherwise agreed 

between the Issuer and the relevant Dealer, on or about the issue date of the relevant Notes. No interest will 

be payable in respect of a temporary Global Note except as provided below. Each Tranche of Notes in 

registered form will be represented by Certificates and may be represented by a Global Certificate. 

Upon deposit of the temporary Global Note(s) with the Common Depositary or registration of 

Registered Notes in the name of any nominee for Euroclear and/or Clearstream, Luxembourg and delivery 

of the relevant Global Certificate to the Common Depositary, Euroclear or Clearstream, Luxembourg will 

credit each subscriber with a nominal amount of Notes equal to the nominal amount thereof for which it has 

subscribed and paid and, in the case of Notes held through Euroclear France, the ‘intermédiaires habilités’ 

(each an ‘Approved Intermediary’) who are entitled, directly or indirectly, to hold such Notes according to 

the records of Euroclear France) will likewise credit each subscriber with a principal amount of Notes equal 

to the principal amount thereof for which it has subscribed and paid. Upon the initial deposit of a Global 

Certificate in respect of and registration of Registered Notes in the name of a nominee for DTC and delivery 

of the relevant Global Certificate to the Custodian for DTC, DTC will credit each subscriber with a nominal 

amount of Notes equal to the nominal amount thereof for which it has subscribed and paid. 

Any payment due in respect of a Global Note or a Global Certificate will be made to each of Euroclear, 

Clearstream, Luxembourg, DTC or an Approved Intermediary in respect of the portion of the Global Note 

or a Global Certificate held for its account. An accountholder with Euroclear, Clearstream, Luxembourg or 

Approved Intermediary with an interest in a temporary Global Note will be required, in order to have credited 

to its account any portion of any payment, to present a certificate in the form set out in the Agency 

Agreement substantially to the effect that the beneficial owner of the relevant interest in the Global Note is 

not within the United States or a U.S. person as such terms are defined by the U.S. Internal Revenue Code 

and the regulations thereunder. 

Relationship of Accountholders with Clearing Systems 

Each of the persons shown in the records of Euroclear, Clearstream, Luxembourg, DTC or Approved 

Intermediary, or any other clearing system as the holder of a Note represented by a Global Note or a Global 

Certificate must look solely to Euroclear, Clearstream, Luxembourg, DTC or such Approved Intermediary or 

clearing system (as the case may be) for his share of each payment made by the Issuer to the bearer of 

such Global Note or the holder of the underlying Registered Notes, as the case may be, and in relation to 

all other rights arising under the Global Notes or Global Certificates, subject to and in accordance with the 

respective rules and procedures of Euroclear, Clearstream, Luxembourg, DTC, Euroclear France or such 

clearing system (as the case may be). Such persons shall have no claim directly against the Issuer in respect 

of payments due on the Notes for so long as the Notes are represented by such Global Note or Global 

Certificate and such obligations of the Issuer will be discharged by payment to the bearer of such Global 

Note or the holder of the underlying Registered Notes, as the case may be, in respect of each amount so 

paid. 

Exchange 

1. Temporary Global Notes. Each temporary Global Note will be exchangeable, free of charge to the 

holder, on or after its Exchange Date: 

1.1 if the relevant Final Terms indicate that such Global Note is issued in compliance with the C Rules 

or in a transaction to which TEFRA is not applicable (as to which, see ‘Summary of the 

Programme — Selling Restrictions’), in whole, but not in part, for the Definitive Notes defined and 

described below and 

1.2 otherwise, in whole or in part upon certification as to non-U.S. beneficial ownership in the form 

set out in the Agency Agreement for interests in a permanent Global Note or, if so provided in the 

relevant Final Terms, for Definitive Notes. 

57

Each temporary Global Note that is also an Exchangeable Bearer Note will be exchangeable for 

Registered Notes in accordance with the Conditions in addition to any permanent Global Note or 

Definitive Notes for which it may be exchangeable and, before its Exchange Date, will also be 

exchangeable in whole or in part for Registered Notes only. 

2. Permanent Global Notes. Each permanent Global Note will be exchangeable, free of charge to the 

holder, on or after its Exchange Date in whole but not, except as provided under ‘Partial Exchange of 

Permanent Global Notes’, in part for Definitive Notes or, in the case of 2.1 below, Registered Notes: 

2.1 if the permanent Global Note is an Exchangeable Bearer Note, by the holder giving notice to the 

Fiscal Agent of its election to exchange the whole or a part of such Global Note for Registered 

Notes and 

2.2 otherwise, (1) if the permanent Global Note is held on behalf of Euroclear or Clearstream, 

Luxembourg or any other clearing system (an ‘Alternative Clearing System’) and any such clearing 

system is closed for business for a continuous period of 14 days (other than by reason of holidays, 

statutory or otherwise) or announces an intention permanently to cease business or in fact does 

so or (2) if principal in respect of any Notes is not paid when due, by the holder giving notice to 

the Fiscal Agent of its election for such exchange. 

3. Unrestricted Global Certificates. If the Final Terms state that the Unrestricted Notes are to be 

represented by an Unrestricted Global Certificate on issue, transfers of the holding of such Notes 

represented by any Unrestricted Global Certificate pursuant to Condition 3(b) may only be made in 

part: 

3.1 if such Notes are held on behalf of Euroclear or Clearstream, Luxembourg or an Alternative 

Clearing System and any such clearing system is closed for business for a continuous period of 

14 days (other than by reason of holidays, statutory or otherwise) or announces an intention 

permanently to cease business or does in fact do so; or 

3.2 if principal in respect of any Note is not paid when due; or 

3.3 with the consent of the Issuer, 

provided that, in the case of the first transfer of part of a holding pursuant to 3.1 or 3.2 above, 

the Registered Holder has given the Registrar not less than 30 days’ notice at its specified office 

of the Registered Holder’s intention to effect such transfer. 

4. Restricted Global Certificates. If the Final Terms state that the Restricted Notes issued by Rabobank 

Nederland are to be represented by a Restricted Global Certificate on issue, transfers of the holding 

of Notes represented by that Restricted Global Certificate pursuant to Condition 3(b) may only be made 

in part: 

4.1 if such Notes are held on behalf of Euroclear or Clearstream, Luxembourg or an Alternative 

Clearing System (except for DTC) and any such clearing system is closed for business for a 

continuous period of 14 days (other than by reason of holidays, statutory or otherwise) or 

announces an intention permanently to cease business or does in fact do so; or 

4.2 if such Notes are held on behalf of a Custodian for DTC and if DTC notifies the Issuer that it is no 

longer willing or able to discharge properly its responsibilities as depositary with respect to that 

Restricted Global Certificate or DTC ceases to be a ‘clearing agency’ registered under the 

Exchange Act or is at any time no longer eligible to act as such, and the Issuer is unable to locate 

a qualified successor within 90 days of receiving notice of such ineligibility on the part of DTC; or 

4.3 if principal in respect of any Note is not paid when due; or 

4.4 with the consent of the Issuer, 

provided that, in the case of the first transfer of part of a holding pursuant to 4.1 or 4.2 above, 

the Registered Holder has given the Registrar not less than 30 days’ notice at its specified office 

of the Registered Holder’s intention to effect such transfer. Individual Certificates issued in 

exchange for a beneficial interest in a Restricted Global Certificate shall bear the legend applicable 

to such Notes as set out under ‘Transfer Restrictions’. 

5. Partial Exchange of Permanent Global Notes. For so long as a permanent Global Note is held on behalf 

of a clearing system and the rules of that clearing system permit, such permanent Global Note will be 

exchangeable in part on one or more occasions (1) for Registered Notes if the permanent Global Note 

58

is an Exchangeable Bearer Note and the part submitted for exchange is to be exchanged for 

Registered Notes, or (2) for Definitive Notes (i) if principal in respect of any Notes is not paid when due 

or (ii) if so provided in, and in accordance with, the Conditions (which will be set out in the relevant Final 

Terms) relating to Partly Paid Notes. 

6. Delivery of Notes. On or after any due date for exchange the holder of a Global Note may surrender 

such Global Note or, in the case of a partial exchange, present it for endorsement to or to the order of 

the Fiscal Agent. In exchange for any Global Note, or the part thereof to be exchanged, the Issuer will 

(i) in the case of a temporary Global Note exchangeable for a permanent Global Note, deliver, or 

procure the delivery of, a permanent Global Note in an aggregate nominal amount equal to that of the 

whole or that part of a temporary Global Note that is being exchanged or, in the case of a subsequent 

exchange, endorse, or procure the endorsement of, a permanent Global Note to reflect such exchange 

or (ii) in the case of a Global Note exchangeable for Definitive Notes or Registered Notes, deliver, or 

procure the delivery of, an equal aggregate nominal amount of duly executed and authenticated 

Definitive Notes and/or Certificates, as the case may be. In this Offering Circular, ‘Definitive Notes’ 

means, in relation to any Global Note, the definitive Bearer Notes for which such Global Note may be 

exchanged (if appropriate, having attached to them all Coupons and Receipts in respect of interest or 

Instalment Amounts that have not already been paid on the Global Note and a Talon). Definitive Notes 

will be security printed and Certificates will be printed in accordance with any applicable legal and stock 

exchange requirements in or substantially in the form set out in the Schedules to the Agency 

Agreement. On exchange in full of each permanent Global Note, the Issuer will, if the holder so 

requests, procure that it is cancelled and returned to the holder together with the relevant Definitive 

Notes. 

In the event that a Global Note is exchanged for Definitive Notes, such Notes shall be issued in 

Specified Denomination(s) only. Noteholders who hold Notes in the relevant clearing systems in 

amounts that are not integral multiples of a Specified Denomination may need to purchase or sell, on 

or before the relevant Exchange Date, a principal amount of Notes such that their holding is an integral 

multiple of a Specified Denomination. 

7. Exchange Date. ‘Exchange Date’ means, in relation to a temporary Global Note, the day falling after 

the expiry of 40 days after its issue date and, in relation to a permanent Global Note, a day falling not 

less than 60 days, or in the case of an exchange for Registered Notes five days, or in the case of failure 

to pay principal in respect of any Notes when due 30 days, after that on which the notice requiring 

exchange is given and on which banks are open for business in the city in which the specified office 

of the Fiscal Agent is located and in the city in which the relevant clearing system is located. 

8. Legend. Each Global Note and any Bearer Note, Talon, Coupon or Receipt issued in compliance with 

the D Rules under TEFRA will bear the following legend: 

‘Any United States person who holds this obligation will be subject to limitations under the United 

States income tax laws, including the limitations provided in Sections 165(j) and 1287(a) of the Internal 

Revenue Code.’ 

The sections of the U.S. Internal Revenue Code referred to in the legend provide that a United States 

taxpayer, with certain exceptions, will not be permitted to deduct any loss, and will not be eligible for 

capital gains treatment with respect to any gain realised on any sale, exchange or redemption of Bearer 

Notes or any related Coupons. 

In the case of Restricted Notes issued by Rabobank Nederland, each Restricted Global Certificate and 

each Certificate issued in exchange for a beneficial interest in a Restricted Global Certificate will bear 

a legend applicable to purchasers who purchase the Registered Notes pursuant to Rule 144A as 

described under ‘Transfer Restrictions’. 

Amendment to Conditions 

The Global Notes and Global Certificates contain provisions that apply to the Notes that they represent, 

some of which modify the effect of the terms and conditions of the Notes set out in this Offering Circular. 

The following is a summary of certain of those provisions as set forth in the Global Notes and, where 

indicated, the Global Certificates: 

1. Payments. No payment falling due after the Exchange Date will be made on any Global Note unless 

exchange for an interest in a permanent Global Note or for Definitive Notes or Registered Notes is 

improperly withheld or refused. Payments on any temporary Global Note issued in compliance with the 

59

D Rules before the Exchange Date will only be made against presentation of certification as to non- 

U.S. beneficial ownership in the form set out in the Agency Agreement. All payments in respect of 

Notes represented by a Global Note will be made against presentation for endorsement and, if no 

further payment falls to be made in respect of the Notes, surrender of that Global Note to or to the 

order of the Fiscal Agent or such other Paying Agent as shall have been notified to the Noteholders for 

such purpose. A record of each payment so made will be endorsed on each Global Note, which 

endorsement will be prima facie evidence that such payment has been made in respect of the Notes. 

Conditions 10(e)(viii) and 11(v) will apply to Definitive Notes only. 

2. Prescription. Claims against the Issuer in respect of Notes that are represented by a permanent Global 

Note will become void unless it is presented for payment within a period of five years from the date on 

which such payment first becomes due. 

3. Meetings. The holder of a permanent Global Note or of the Notes represented by a Global Certificate 

shall (unless such permanent Global Note or Global Certificate represents only one Note) be treated 

as being two persons for the purposes of any quorum requirements of a meeting of Noteholders and, 

at any such meeting, the holder of a permanent Global Note shall be treated as having one vote in 

respect of each minimum Specified Denomination of Notes for which such Global Note may be 

exchanged. (All holders of Registered Notes are entitled to one vote in respect of each Note comprising 

such Noteholder’s holding, whether or not represented by a Global Certificate.) 

4. Cancellation. Cancellation of any Note represented by a permanent Global Note that is required to be 

cancelled will be effected by reduction in the nominal amount of the relevant permanent Global Note. 

5. Purchase. Notes represented by a permanent Global Note may only be purchased by the Issuer or any 

of its subsidiaries if they are purchased together with the rights to receive all future payments of interest 

and Instalment Amounts (if any) thereon. 

6. Issuer’s Option. Any option of the Issuer provided for in the Conditions of any Notes while such Notes 

are represented by a permanent Global Note shall be exercised by the Issuer giving notice to the 

Noteholders within the time limits set out in and containing the information required by the Conditions, 

except that the notice shall not be required to contain the serial numbers of Notes drawn in the case 

of a partial exercise of an option and accordingly no drawing of Notes shall be required. In the event 

that any option of the Issuer is exercised in respect of some but not all of the Notes of any Series, the 

rights of accountholders with a clearing system or Approved Intermediary in respect of the Notes will 

be governed by the standard procedures of Euroclear, Clearstream, Luxembourg, Clearstream 

Banking AG, Euroclear France or any other clearing system (as the case may be). 

7. Noteholders’ Options. Any option of the Noteholders provided for in the Conditions of any Notes while 

such Notes are represented by a permanent Global Note may be exercised by the holder of the 

permanent Global Note giving notice to the Fiscal Agent within the time limits relating to the deposit of 

Notes with a Paying Agent set out in the Conditions substantially in the form of the notice available 

from any Paying Agent, except that the notice shall not be required to contain the serial numbers of 

the Notes in respect of which the option has been exercised, and stating the nominal amount of Notes 

in respect of which the option is exercised and at the same time presenting the permanent Global Note 

to the Fiscal Agent, or to a Paying Agent acting on behalf of the Fiscal Agent, for notation. 

8. Events of Default. Each Global Note provides that the holder may cause such Global Note, or a portion 

of it, to become due and repayable in the circumstances described in Condition 13 by stating in the 

notice to the Fiscal Agent the nominal amount of such Global Note that is becoming due and repayable. 

If principal in respect of any Note is not paid when due, the holder of a Global Note or Registered Notes 

represented by a Global Certificate may elect for direct enforcement rights against the Issuer under the 

terms of a Covenant executed by the Issuer and the Fiscal Agent on May 31, 2006 to come into effect 

in relation to the whole or a part of such Global Note or one or more Registered Notes in favour of the 

persons entitled to such part of such Global Note or such Registered Notes represented by such 

Global Certificate, as the case may be, as accountholders with a clearing system. Following any such 

acquisition of direct rights, the Global Note or, as the case may be, the Global Certificate and the 

corresponding entry in the register kept by the Registrar will become void as to the specified portion 

or Registered Notes, as the case may be. However, no such election may be made in respect of Notes 

represented by a Global Certificate unless the transfer of the whole or a part of the holding of Notes 

represented by that Global Certificate shall have been improperly withheld or refused. 

60

9. Notices. So long as any Notes are represented by a Global Note and such Global Note is held on behalf 

of a clearing system, notices to the holders of Notes of that Series may be given by delivery of the 

relevant notice to that clearing system for communication by it to entitled accountholders in 

substitution for publication as required by the Conditions or by delivery of the relevant notice to the 

holder of the Global Note except that so long as the Notes are listed on Euronext Amsterdam or on 

the Luxembourg Stock Exchange and the rules of such exchange so require, notices shall also be 

published in the Euronext Daily Official List and a daily newspaper having general circulation in the 

Netherlands and/or either on the website of the Luxembourg Stock Exchange (www.bourse.lu) or in a 

leading newspaper having general circulation in Luxembourg (which is expected to be d’Wort). 


The provisions relating to Partly Paid Notes are not set out in this Offering Circular, but will be contained 

in the relevant Final Terms and thereby in the Global Notes. While any instalments of the subscription moneys 

due from the holder of Partly Paid Notes are overdue, no interest in a Global Note representing such Notes 

may be exchanged for an interest in a permanent Global Note or for Definitive Notes (as the case may be). 

If any Noteholder fails to pay any instalment due on any Partly Paid Notes within the time specified, the Issuer 

may forfeit such Notes (subject to the provisions of the applicable Final Terms and relevant provisions of law) 

and shall have no further obligation to their holder in respect of them. 

61

USE OF PROCEEDS 

The net proceeds from the issues of the Notes will be used by the Issuer in connection with its banking 

business. 

62

CLEARING AND SETTLEMENT 

Book-Entry Ownership 

Bearer Notes 

The Issuer may make applications to Clearstream, Luxembourg and/or Euroclear for acceptance in 

their respective book-entry systems in respect of any Series of Bearer Notes. In respect of Bearer Notes, a 

temporary Global Note and/or a permanent Global Note in bearer form without coupons may be deposited 

with a common depositary for Clearstream, Luxembourg and/or Euroclear or an alternative clearing system 

as agreed between the Issuer and Dealer. Transfers of interests in such temporary Global Notes or 

permanent Global Notes will be made in accordance with the normal Euromarket debt securities operating 

procedures of Clearstream, Luxembourg and Euroclear or, if appropriate, the alternative clearing system. 

Each Global Note deposited with a common depositary on behalf of Euroclear and Clearstream, 

Luxembourg will have an ISIN and a Common Code. 

Registered Notes 

The Issuer may make applications to Clearstream, Luxembourg and/or Euroclear for acceptance in 

their respective book-entry systems in respect of the Notes to be represented by an Unrestricted Global 

Certificate or (in the case of Restricted Notes issued by Rabobank Nederland) a Restricted Global 

Certificate. Each Unrestricted Global Certificate or (in the case of Restricted Notes issued by Rabobank 

Nederland) Restricted Global Certificate deposited with a nominee for Clearstream, Luxembourg and/or 

Euroclear will have an ISIN and a Common Code. 

Rabobank Nederland and a relevant U.S. agent appointed for such purpose that is an eligible DTC 

participant may make application to DTC for acceptance in its book-entry settlement system of the 

Registered Notes issued by Rabobank Nederland represented by a Restricted Global Certificate. Each such 

Restricted Global Certificate will have a CUSIP number. Each Restricted Global Certificate will be subject to 

restrictions on transfer contained in a legend appearing on the front of such Global Certificate, as set out 

under ‘Transfer Restrictions’. In certain circumstances, as described below in ‘Transfers of Registered 

Notes’, transfers of interests in a Restricted Global Certificate may be made as a result of which such legend 

may no longer be required. 

In the case of a Tranche of Registered Notes to be cleared through the facilities of DTC, the Custodian, 

with whom the Restricted Global Certificates are deposited, and DTC will electronically record the nominal 

amount of the Restricted Notes held within the DTC system. Investors in Notes of such Tranche may hold 

their beneficial interests in an Unrestricted Global Certificate only through Clearstream, Luxembourg or 

Euroclear. Investors may hold their beneficial interests in a Restricted Global Certificate directly through DTC 

if they are participants in the DTC system, or indirectly through organisations which are participants in such 

system. 

Payments of the principal of, and interest on, each Restricted Global Certificate registered in the name 

of DTC’s nominee will be to or to the order of its nominee as the registered owner of such Restricted Global 

Certificate. Rabobank Nederland expects that the nominee, upon receipt of any such payment, will 

immediately credit DTC participants’ accounts with payments in amounts proportionate to their respective 

beneficial interests in the nominal amount of the relevant Restricted Global Certificate as shown on the 

records of DTC or the nominee. Rabobank Nederland also expects that payments by DTC participants to 

owners of beneficial interests in such Restricted Global Certificate held through such DTC participants will 

be governed by standing instructions and customary practices, as is now the case with securities held for 

the accounts of customers registered in the names of nominees for such customers. Such payments will 

be the responsibility of such DTC participants. None of Rabobank Nederland, any Paying Agent or any 

Transfer Agent will have any responsibility or liability for any aspect of the records relating to or payments 

made on account of ownership interests in the Restricted Global Certificates or for maintaining, supervising 

or reviewing any records relating to such ownership interests. 

All Registered Notes will initially be in the form of an Unrestricted Global Certificate and/or (in the case 

of Restricted Notes issued by Rabobank Nederland) a Restricted Global Certificate. Individual Certificates 

will only be available, in the case of Notes initially represented by an Unrestricted Global Certificate, in 

amounts specified in the applicable Final Terms, and, in the case of Notes initially represented by a 

Restricted Global Certificate, in amounts of U.S.$100,000 (or its equivalent rounded upwards as agreed 

between the Issuer and the relevant Dealer(s)), or higher integral multiples of U.S.$1,000, in certain limited 

circumstances described below. 

63

Transfers of Registered Notes 

Transfers of interests in Global Certificates within DTC, Clearstream, Luxembourg and Euroclear will 

be in accordance with the usual rules and operating procedures of the relevant clearing system. The laws 

of some states in the United States require that certain persons take physical delivery in definitive form of 

securities. Consequently, the ability to transfer interests in a Restricted Global Certificate to such persons 

may be limited. Because DTC can only act on behalf of participants, who in turn act on behalf of indirect 

participants, the ability of a person having an interest in a Restricted Global Certificate to pledge such 

interest to persons or entities that do not participate in DTC, or otherwise take actions in respect of such 

interest, may be affected by the lack of a physical certificate in respect of such interest. 

Beneficial interests in an Unrestricted Global Certificate may only be held through Clearstream, 

Luxembourg or Euroclear. In the case of Registered Notes to be cleared through Euroclear, Clearstream, 

Luxembourg and/or DTC, transfers may be made at any time by a holder of an interest in an Unrestricted 

Global Certificate to a transferee who wishes to take delivery of such interest through the Restricted Global 

Certificate for the same Series of Notes provided that any such transfer made on or prior to the expiration 

of the distribution compliance period (as used in ‘Plan of Distribution’) relating to the Notes represented by 

such Unrestricted Global Certificate will only be made upon receipt by the Registrar or any Transfer Agent 

of a written certificate from Euroclear or Clearstream, Luxembourg, as the case may be, (based on a written 

certificate from the transferor of such interest) to the effect that such transfer is being made to a person 

whom the transferor reasonably believes is a qualified institutional buyer within the meaning of Rule 144A in 

a transaction meeting the requirements of Rule 144A and in accordance with any applicable securities law 

of any state of the United States or any other jurisdiction. Any such transfer made thereafter of the Notes 

represented by such Unrestricted Global Certificate will only be made upon request through Clearstream, 

Luxembourg or Euroclear by the holder of an interest in the Unrestricted Global Certificate to the Fiscal Agent 

of details of that account at either Euroclear or Clearstream, Luxembourg or DTC to be credited with the 

relevant interest in the Restricted Global Certificate. Transfers at any time by a holder of any interest in the 

Restricted Global Certificate to a transferee who takes delivery of such interest through an Unrestricted 

Global Certificate will only be made upon delivery to the Registrar or any Transfer Agent of a certificate 

setting forth compliance with the provisions of Regulation S and giving details of the account at Euroclear 

or Clearstream, Luxembourg, as the case may be, and/or DTC to be credited and debited, respectively, with 

an interest in the relevant Global Certificates. 

Subject to compliance with the transfer restrictions applicable to the Registered Notes described 

above and under ‘Transfer Restrictions’, cross-market transfers between DTC, on the one hand, and directly 

or indirectly through Clearstream, Luxembourg or Euroclear accountholders, on the other, will be effected 

by the relevant clearing system in accordance with its rules and through action taken by the Custodian, the 

Registrar and the Fiscal Agent. 

On or after the Issue Date for any Series, transfers of Notes of such Series between accountholders 

in Clearstream, Luxembourg and/or Euroclear and transfers of Notes of such Series between participants 

in DTC will generally have a settlement date three business days after the trade date (T+3). The customary 

arrangements for delivery versus payment will apply to such transfers. 

Cross-market transfers between accountholders in Clearstream, Luxembourg or Euroclear and DTC 

participants will need to have an agreed settlement date between the parties to such transfer. Because there 

is no direct link between DTC, on the one hand, and Clearstream, Luxembourg and Euroclear, on the other, 

transfers of interests in the relevant Global Certificates will be effected through the Fiscal Agent, the 

Custodian and the Registrar receiving instructions (and where appropriate certification) from the transferor 

and arranging for delivery of the interests being transferred to the credit of the designated account for the 

transferee. Transfers will be effected on the later of (i) three business days after the trade date for the disposal 

of the interest in the relevant Global Certificate resulting in such transfer and (ii) two business days after 

receipt by the Fiscal Agent or the Registrar, as the case may be, of the necessary certification or information 

to effect such transfer. In the case of cross-market transfers, settlement between Euroclear or Clearstream, 

Luxembourg accountholders and DTC participants cannot be made on a delivery versus payment basis. 

The securities will be delivered on a free delivery basis and arrangements for payment must be made 

separately. 

For a further description of restrictions on transfer of Registered Notes, see ‘Transfer Restrictions’. 

DTC has advised Rabobank Nederland that it will take any action permitted to be taken by a holder of 

Registered Notes (including, without limitation, the presentation of Restricted Global Certificates for 

exchange as described above) only at the direction of one or more participants in whose account with DTC 

64

interests in Restricted Global Certificates are credited and only in respect of such portion of the aggregate 

nominal amount of the relevant Restricted Global Certificates as to which such participant or participants 

has or have given such direction. However, in the circumstances described above, DTC will surrender the 

relevant Restricted Global Certificates for exchange for individual Certificates (which will, in the case of 

Restricted Notes, bear the legend applicable to transfers pursuant to Rule 144A). 

DTC has advised Rabobank Nederland as follows: DTC is a limited purpose trust company organised 

under the laws of the State of New York, a ‘banking organisation’ under the laws of the State of New York, 

a member of the U.S. Federal Reserve System, a ‘clearing corporation’ within the meaning of the New York 

Uniform Commercial Code and a ‘clearing agency’ registered pursuant to the provisions of Section 17A of 

the Exchange Act. DTC was created to hold securities for its participants and facilitate the clearance and 

settlement of securities transactions between participants through electronic computerised book-entry 

changes in accounts of its participants, thereby eliminating the need for physical movement of certificates. 

Direct participants include securities brokers and dealers, banks, trust companies, clearing corporations 

and certain other organisations. Indirect access to DTC is available to others, such as banks, securities 

brokers, dealers and trust companies, that clear through or maintain a custodial relationship with a DTC 

direct participant, either directly or indirectly. 

Although DTC, Clearstream, Luxembourg and Euroclear have agreed to the foregoing procedures in 

order to facilitate transfers of beneficial interests in the Global Certificates among participants and 

accountholders of DTC, Clearstream, Luxembourg and Euroclear, they are under no obligation to perform 

or continue to perform such procedures, and such procedures may be discontinued at any time. Neither 

the Issuer nor any Paying Agent nor any Transfer Agent will have any responsibility for the performance by 

DTC, Clearstream, Luxembourg or Euroclear or their respective direct or indirect participants or 

accountholders of their respective obligations under the rules and procedures governing their operations. 

While a Restricted Global Certificate is lodged with DTC or the Custodian, Restricted Notes 

represented by individual Certificates will not be eligible for clearing or settlement through DTC, Clearstream, 

Luxembourg or Euroclear. 

Individual Certificates 

Registration of title to Registered Notes in a name other than a depositary or its nominee for 

Clearstream, Luxembourg and Euroclear or for DTC will be permitted only (i) in the case of Restricted Global 

Certificates in the circumstances set forth in ‘Summary of Provisions Relating to the Notes while in Global 

Form — Exchange — Restricted Global Certificates’ or (ii) in the case of Unrestricted Global Certificates in 

the circumstances set forth in ‘Summary of Provisions Relating to the Notes while in Global Form — 

Exchange — Unrestricted Global Certificates’. In such circumstances, the Issuer will cause sufficient 

individual Certificates to be executed and delivered to the Registrar for completion, authentication and 

despatch to the relevant Noteholder(s). A person having an interest in a Global Certificate must provide the 

Registrar with: 

(i) a written order containing instructions and such other information as the Issuer and the Registrar may 

require to complete, execute and deliver such individual Certificates; and 

(ii) in the case of a Restricted Global Certificate only, a fully completed, signed certification substantially 

to the effect that the exchanging holder is not transferring its interest at the time of such exchange, or 

in the case of a simultaneous resale pursuant to Rule 144A, a certification that the transfer is being 

made in compliance with the provisions of Rule 144A. Individual Certificates issued pursuant to this 

paragraph (ii) shall bear the legends applicable to transfers pursuant to Rule 144A. 

Pre-issue Trades Settlement 

It is expected that delivery of Notes will be made against payment therefor on the relevant Issue Date, 

which could be more than three business days following the date of pricing. Under Rule 15c6-1 of the SEC 

under the Exchange Act, trades in the United States secondary market generally are required to settle within 

three business days (T+3), unless the parties to any such trade expressly agree otherwise. Accordingly, 

purchasers who wish to trade Registered Notes in the United States on the date of pricing or the next 

succeeding business days until the relevant Issue Date will be required, by virtue of the fact that the Notes 

initially will settle beyond T+3, to specify an alternate settlement cycle at the time of any such trade to prevent 

a failed settlement. Settlement procedures in other countries will vary. Purchasers of Notes may be affected 

by such local settlement practices and purchasers of Notes who wish to trade Notes between the date of 

pricing and the relevant Issue Date should consult their own adviser. 

65

General 

For a listing on Eurolist by Euronext Amsterdam, Nederlands Centraal Instituut voor Giraal 

Effectenverkeer B.V. or its legal successor (‘Euroclear Netherlands’) will be involved in clearing and 

settlement. 

66

DESCRIPTION OF BUSINESS OF THE RABOBANK GROUP 

General 

The Rabobank Group is one of the largest banking organisations in the Netherlands and the largest 

mortgage lending and savings organisation in the Netherlands by market share. We are one of the 25 largest 

banking institutions in the world in terms of assets and Tier I capital. We offer a broad range of financial, 

insurance and asset management services across retail, corporate and commercial sectors, both 

domestically and internationally. The Rabobank Group has the highest credit ratings awarded by the 

international rating agencies Moody’s (Aaa since 1986) and Standard & Poor’s (AAA since 1985). On a 

consolidated basis, our total assets were € 506 billion at December 31, 2005. At December 31, 2005, we 

had 45,580 full-time equivalent employees. 

The Rabobank Group is comprised of the cooperative Rabobank Nederland, the cooperative local 

Rabobanks, which are members of Rabobank Nederland and are also licensed credit institutions, and 

Rabobank Nederland’s subsidiaries. We had 248 local Rabobanks and 1,249 branches located throughout 

the Netherlands at December 31, 2005. The local Rabobanks are themselves cooperative entities that draw 

all of their members from their customers. See ‘The Rabobank Group Structure’. 

The various entities within the Rabobank Group comprise a network of ‘competence centres’ which 

provide financial services and products to the local Rabobanks and to each other. This networked expertise 

allows us to respond actively to the growing demand from business clients and private individuals for a 

balanced package of financial services and products. We therefore seek to combine the best of two worlds: 

the local presence of the local Rabobanks and the expertise and scale of a large organisation. The 

underlying purpose of Rabobank Nederland’s cooperative structure is to provide high quality services and 

products to its customers at reasonable prices, while maintaining the financial stability of the Rabobank 

Group. 

Historically, we engaged primarily in lending to the agricultural and horticultural sectors in the Dutch 

market. Since the 1990s, we have also offered a wide variety of commercial banking and other financial 

services not only in the Netherlands but also internationally. As part of an ongoing programme, we have 

increased both the number and type of products and services available to our customers in order to diversify 

from a traditional savings and mortgage-based business to be a provider of a full range of financial products 

and services, both in the Netherlands and internationally. To this end we pursue an ‘Allfinanz’ concept, 

meaning that we provide an integrated range of financial services comprised primarily of domestic retail 

banking, wholesale and international retail banking, asset management and investment, leasing, real estate 

and distribution of insurance products to a wide range of both individual and corporate customers. As part 

of this Allfinanz strategy, we focus on operations that produce fee-based income in addition to our traditional 

interest-based income sources. 

Through Rabobank Nederland, the local Rabobanks and our subsidiaries, the Rabobank Group 

provides services in the following five core business areas: Domestic Retail Banking, Wholesale and 

International Retail Banking, Asset Management and Investment, Leasing and Real Estate. The diagram 

below sets forth the organisational structure of Rabobank Nederland, the local Rabobanks and the 

subsidiaries that engage in our core business areas. 

67

9 million clients 

1.55 million members 

248 member banks 


Wholesale banking and 

International retail banking 

Corporate • Clients 

Rabobank • International 

• 

• 

Market support 

domestic retail banking 

Private individuals 

SME 

• 

• 

• 

• 

• 

• 

Group departments 

Co-operative and management Issues 

Group ITC 

Group Finance 

Credit control 

Shared Services & Facilities 

Other Corporate departments and services 

Asset management 

Investment 

Leasing 

Real estate 

Other Group units 

• 

• 

• 

Robeco Group 

Schretlen & Co 

Alex 

• De Lage Landen 

• 

• 

Rabo Vast 

FGH Bank 

• Obvion 

Domestic Retail Banking 

We provide a variety of lending and savings services in the Netherlands through our network of local 

Rabobanks and their domestic offices and agencies. From January 1, 2005 through December 31, 2005, 

we had a market share of 23% of new home mortgages in the Dutch mortgage market (18.9% by local 

Rabobanks and 4.1% by Obvion N.V. (‘Obvion’); source: Dutch Land Registry Office (Kadaster)). In 2005, 

we had an 83% market share of loans and advances made by banks to the Dutch primary agricultural sector 

(measured by sample tests performed by ourselves). In 2005, we also had a 38% market share of domestic 

loans to the trade, industry and services sector (i.e., small enterprises with less than 100 employees; 

measured by sample tests performed by ourselves). At December 31, 2005 we had a 39% market share in 

the Dutch savings market (source: Statistics Netherlands (Centraal Bureau voor de Statistiek)). The 

foregoing percentages in this paragraph should be read as percentages of the relevant Dutch market as a 

whole. 

For the year ended December 31, 2005, our Domestic Retail Banking operations accounted for 57%, 

or € 1,521 million, of our operating profit before taxation 1 . 

Wholesale and International Retail Banking 

Through Rabobank Nederland Corporate Clients (‘RNCC’) and Rabobank International, which 

includes Rabo Securities, we provide a variety of wholesale banking services, including advising on mergers 

and acquisitions and stock transactions, lending and providing special financing arrangements to both 

domestic and international corporate clients. Rabobank International is also responsible for the international 

retail operations. For the year ended December 31, 2005, our Wholesale and International Retail Banking 

operations accounted for 26%, or € 690 million, of our operating profit before taxation. Rabo Securities N.V. 

has merged into Rabobank Nederland as per July 1, 2005. After the merger the equity and corporate 

advisory business of Rabo Securities has continued its activities under the trade name Rabo Securities. 

Asset Management and Investment 

We provide asset management, investment and private banking services to private, institutional and 

corporate investors through a number of subsidiaries. Robeco is the competence centre for asset 

management services within the Rabobank Group, offering financial products and services to our Asset 

1) As the Rabobank Group conducts more activities than the five core business areas, the gross operating profits of the five core business areas do 

not add up to 100% of consolidated operating profit before taxation. 

68

Management and Investment operations. Schretlen operates our private banking activities in the 

Netherlands and internationally. The internet-brokerage activities are conducted under the trade name Alex. 

Alex provides investment services to its clients via the internet. For the year ended December 31, 2005, our 

Asset Management and Investment operations accounted for 9%, or € 250 million of our operating profit 

before taxation. 

Leasing 

Our leasing activities are undertaken primarily by De Lage Landen. De Lage Landen provides factoring 

and leasing services to corporate borrowers, mainly in the food and agribusiness, technology, healthcare 

and banking industries. At December 31, 2005, De Lage Landen had a loan portfolio of approximately 

€ 15.4 billion. Operating profit before taxation from our Leasing operations, at € 235 million, accounted for 

9% of our operating profit before taxation for the year ended December 31, 2005. 

Real Estate 

We provide a variety of real estate services to institutional and corporate clients through our Rabo 

Vastgoed entity and FGH Bank. Rabo Vastgoed is our real estate project development and finance arm and 

FGH Bank specialises in commercial real estate financing. For the year ended December 31, 2005, our Real 

Estate operations accounted for 4%, or € 108 million, of our operating profit before taxation. 

Recent Developments 

Acquisition of Central Coast Bancorp in California completed 

With the completion in January 2006 of the acquisition of the NASDAQ-quoted holding company 

Central Coast Bancorp in California, which was announced in 2005, Rabobank became the owner of the 

banking subsidiary Community Bank of Central California (‘CBCC’). CBCC operates an extensive branch 

network in California which has merged into Rabobank’s existing operations. 

Successful placing of Member Certificates 

Member Certificates III in the amount of € 2.0 billion were placed with members in 2005. As with 

previous issues, the new certificates were in great demand and the issue was oversubscribed. 

De Lage Landen intends to acquire Athlon Car Lease 

De Lage Landen International B.V. announced that with an public offer they intend to acquire via a 

public offer all outstanding shares in Athlon Holding N.V. for a cash consideration of € 30.25 in cash per 

ordinary share, in which offer price is included the rights for dividend over the financial year 2005. If the public 

offer succeeds the total investment would be approximately € 580 million. The combination of car leasing 

companies Athlon Car Lease and De Lage Landen Translease (the car leasing subsidiary of the De Lage 

Landen) will result in a position as one of the market leaders in the Netherlands. 

Sekerbank 

In July 2005 Rabobank signed an agreement to acquire a 36.5% interest in Sekerbank which is active 

in the Turkish agricultural sector, and also offers financial services to private individuals and small and 

medium sized enterprises. After acquiring this interest Rabobank would be obliged to conduct a tender offer 

which should have increased the interest of Rabobank to at least 51%. On the instigation of the 36.5% 

shareholder of Sekerbank the court in Istanbul ruled in February 2006 that the price of the shares as agreed 

between Rabobank and Sekerbank had to be increased by 72% (from € 82 million to € 141 million). 

Rabobank is filing an appeal against the ruling of the court. Rabobank remains determined to acquire the 

shares. 

Certain information on important Group companies 

Robeco Groep N.V. 

Robeco has its statutory seat in Rotterdam, the Netherlands. The objects of Robeco are the provision 

of investment management services, financial services and acting as a holding and financing company. Its 

issued and fully paid up share capital amounts to € 4,537,803 (4,537,803 shares with a nominal value € 1 

each) as of December 31, 2005. Rabobank Nederland’s share in its issued capital is 100 per cent. Robeco’s 

net result in 2005 was € 152.0 million, corresponding to € 33.50 per share. As at December 31, 2005, 

69

Rabobank Nederland’s liabilities to Robeco amounted to € 386 million (bonds), € 668 million (current 

account), nil (professional securities transactions) and € 160 million (loans/deposits). Rabobank 

Nederland’s claims on Robeco as at December 31, 2005 amounted to € 273 million (loans) and € 183 

million (current account). 

De Lage Landen International B.V. 

De Lage Landen has its statutory seat in Eindhoven, the Netherlands. The object of De Lage Landen 

is the provision of factoring and vendor lease services. Its issued share capital amounts to € 132,716,527. 

Rabobank Nederland’s share in its issued share capital is 100 per cent. De Lage Landen’s net profit in 2005 

was € 178 million corresponding to € 820,276.50 per share. In 2004, De Lage Landen did not declare a 

dividend. As at December 31, 2005, Rabobank Nederland’s liabilities to De Lage Landen amounted to € 

1,036 million. As at December 31, 2005 Rabobank Nederland’s claims on De Lage Landen amounted to € 

12,669 million (loans and current account). All liabilities of De Lage Landen are guaranteed (via the cross 

guarantee system) by Rabobank Nederland and the other participants of this system. 

Outlook 2006 

The recovery of the Dutch economy, which commenced in the second half of 2005, is expected to 

continue and gather momentum in 2006. 

The domestic banking operations could benefit from the economic growth, precisely because the 

sectors with a more domestic focus are now also contributing to the upturn. It is anticipated, however, that 

the fierce competition between banks in key market segments such as small and medium-sized enterprises 

and the market for mortgage loans, added to the continued low interest rate, will cause interest margins to 

remain under pressure in 2006. 

Worldwide, Rabobank expects a favourable economic trend for 2006. These conditions will present 

good opportunities for Rabobank Group to expand its international operations, particularly in leasing, 

wholesale and international retail operations. By means of organic growth and selective (minor) acquisitions, 

Rabobank will further expand its operations abroad. 

Group Strategy 

In the Central Delegates Assembly (CKV) held on March 22, 2006 - the ‘parliament’ of the local 

Rabobanks - the exchange of ideas on the strategic direction, which had been initiated in 2005, was 

concluded with the finalisation of the Strategic Framework for 2005–2010. Besides autonomous growth, 

this framework is founded on the following indisputable principles: 

• Rabobank is and remains Dutch, with its dominant market position in agri, among private 

individuals and in small and medium-sized enterprises. 

• Rabobank is and remains a cooperative; exceptions may be made for Group subsidiaries. 

• Rabobank remains AAA worthy. 

• Rabobank remains independent. 

Three growth areas 

The new strategic framework profiles Rabobank as ‘the global food and agri bank with its roots in the 

Netherlands’ and in doing so distinguishes three growth areas: 

• Growth in the Dutch Allfinanz market, in particular through further collaboration with 

Eureko/Achmea and through further strengthening of Rabobank’s position in the top end of the 

private and corporate markets. 

• Continued expansion abroad as a leading international food and agri bank. 

• Further growth of and synergy between the Group subsidiaries. 

Strategy in the Netherlands - Market leader in Allfinanz 

Market leadership in Allfinanz in the Netherlands remains the chief goal. In addition to the mass market 

for banking services to private individuals, small and medium-sized enterprises and the agricultural sector, 

there are attractive opportunities for growth in the top end of the private and corporate markets, where 

70

Rabobank is in second position already. Other focuses are the ‘segments of the future’ - young people and 

entrepreneurs from ethnic minorities - as well as the urban areas and a number of product markets. Here, 

insurance, consumer credits, investment and real estate financing are the spearheads. 

Leverage distribution strength as a ‘near-you bank’ 

Rabobank will leverage its distribution strength as the ‘near-you bank’ of the Netherlands, not just 

physically but also, and increasingly, through ‘virtual’ channels. Using differentiated market strategies, it will 

respond to differences in client segments, geographical differences and distinct labels and distribution 

channels. The Bank’s answer to the growing competition in the ‘near-you’ aspect lies in expansion of the 

number of client interface points. By further expansion of the virtual bank, it is expected that clients’ 

experience of Rabobank as ‘near-you’ and personal must be maintained. 

Successful merger between Interpolis and Achmea 

The successful merger between Interpolis and Achmea has resulted in the largest insurer in the 

Netherlands. This merger gave Rabobank a 32% interest in Eureko, Achmea’s parent company, resulting in 

a total interest of 37%. The combination creates attractive opportunities for organic growth, for example by 

a broader product range, a larger number of Rabobank clients with an insurance at Interpolis and by further 

implementation of the multidistribution strategy. Work is continuing to extend the collaboration with 

Eureko/Achmea. 

International strategy 

International growth is necessary to support SME and corporate clients, for they are increasing their 

operations on the global stage. This would have the added advantages of easier access to the international 

capital markets and enhancing Rabobank’s continued attractiveness as an employer. The corporate bank 

Rabobank International aims to be the world’s leading food and agri bank. This ambition dovetails with 

Rabobank’s cooperative origins as the pre-eminent financier of the Dutch agricultural sector and the 

substantial amount of expertise it has developed. 

Rabobank’s international operations can be divided into five categories: 

• International retail banking 

Here, Rabobank focuses on three growth markets. The chief priorities are traditionally agricultural 

countries with a stable climate and a structurally attractive agricultural sector, such as the United 

States, Australia and Canada. Second on the list are countries in Central, Eastern and 

Southeastern Europe with a growing agricultural sector, such as Poland and Turkey. Then follow 

the rapidly emerging countries with a large agricultural sector, such as Brazil, China, India and 

Indonesia. Projects in these countries are small-scale, in which the financial interest is relatively 

limited. 

• Support of Dutch clients abroad 

In order to maintain its market leadership among clients with international operations, Rabobank 

will in the coming years work towards strengthening the expertise and selling power of local 

advisers and account managers, improving its product management and intensifying the 

relationship management with partner banks abroad. 

• International wholesale operations 

In future years, and more than has been the case in the past, the international office network will 

focus its wholesale operations on Dutch wholesale clients, besides the international food and agri 

clients. The primary geographical focus is on Europe and the countries where Rabobank 

International is developing retail operations. 

• Professional market activities 

Rabobank values its AAA rating and will continue to use it for a selected number of profitable 

product/market combinations in the professional financial markets. In view of the greater volatility 

of professional markets, the target for the future is to realise approximately 50% of international 

profits from international retail operations. 

71

• Rabobank Development Programme 

Complementary to the successful activities of the Rabobank Foundation, which started 30 years 

ago, the Rabobank Development Programme (RDP) was established. The RDP’s aim is to help a 

number of banks in developing countries grow into successful ‘Rabobanks’. During the next few 

years, its activities will be focused on five countries, including China and a number of countries 

in East Africa. 

Strategy of the subsidiaries 

Rabobank Group’s Dutch subsidiaries play an important part in achieving the Group’s market 

leadership ambitions. In five years from now, the target is to double their net profit and to achieve/maintain 

leading market positions. 

Organisational and financial implications 

Rabobank Group’s strategic ambitions have been embedded in a cooperative, high-quality and 

sustainability-driven organisation. 

• Strengthening the cooperative identity 

The cooperative is and remains Rabobank’s cornerstone. The local cooperative Rabobanks and 

their central cooperative Rabobank Nederland, which is also the holding company of the Group’s 

subsidiaries, are and will continue to be managed in accordance with the cooperative model. 

• High-quality policy for Human Resource Management (HRM) 

The quality of our people is of paramount importance to our strategy. The priority in HRM policy 

is to secure the required calibre of talented, highly educated staff and managers. 

• Sustainability 

Rabobank aims at building on its strong position in sustainability and corporate social 

responsibility (CSR). It is working towards more CSR criteria in all banking operations, more 

sustainable financial products such as green financing and green investments, and more deeply 

embedding sustainable development in its operations. 

Ambitious financial targets 

Rabobank Group maintains the following financial targets: 

• Annual net profit growth of at least 12%; 

• A Tier I ratio of at least 10.0 per annum; 

• Return on equity of at least 10.0% per annum. 

Business Activities of the Rabobank Group 


Our Domestic Retail Banking operations are primarily undertaken by the local Rabobanks and Obvion. 

Our Domestic Retail Banking operations include making loans, taking deposits and providing fund transfers 

and non-credit service operations, primarily in the Netherlands. Each of the local Rabobanks provides credit 

and deposit services. In keeping with the Allfinanz concept, each of the local Rabobanks distributes 

insurance products and also provides, either directly or through the Rabobank Group’s specialised 

subsidiaries, investment and a wide variety of other services to customers in the local Rabobank’s specific 

geographical business area. Obvion provides mortgages finances and operates through independent 

agents. Obvion is a joint venture between Rabobank Group and Algemeen Burgelijk Pensioenfonds. 

At December 31, 2005 we had a 39% market share in the Dutch savings market. For the year ended 

December 31, 2005, our Domestic Retail Banking operations accounted for 58%, or € 5,431 million, of our 

total income and 57%, or € 1,521 million, of our operating profit before taxation. At December 31, 2005, 

our Domestic Retail Banking operations employed 28,909 full-time equivalent employees. 

The Dutch mortgage loan market is a highly competitive market. Driven by the tax deductibility of 

mortgage loan interest payments, Dutch homeowners usually take out relatively high mortgage loans. This 

does not necessarily indicate a high risk for banks with mortgage lending operations. We have a balanced 

72

mortgage loan portfolio with a weighted loan-to-value of approximately 50%. Historically, mortgage lending 

has been relatively low risk and all mortgage loans are collateralised. Mortgage loan defaults do not occur 

frequently, either in our mortgage lending operations or in the Netherlands generally. Almost all mortgages 

in the Netherlands have a maturity of 30 years. Generally, mortgages have a 5 or 10-year fixed interest rate, 

after which period the rate is reset at the current market rate. Customers generally do not have the option 

to prepay on their mortgage loan without incurring a penalty fee, thus reducing the interest rate risks related 

to mortgage loan refinancing for the Rabobank Group. 

Local Rabobanks 

With 1,249 branches (the most branches of any financial institution in the Netherlands), 802 cash 

dispensing machines in public locations, serviceshops, agencies and other point of contacts as of 

December 31, 2005, the local Rabobanks have 3,031 points of contacts. Through the local Rabobanks and 

Obvion, we are the largest mortgage lending institution in the Netherlands, with a market share of 23%, 

based on the amount of new Dutch residential mortgages in 2005. We are the leader in loans to the Dutch 

agricultural sector and in the small and medium-sized business sector. Of the total lending € 200.6 billion 

was granted by Domestic Retail Banking, or approximately 73% of our total lending (except government 

lending) at December 31, 2005. Loans made by the Wholesale and International Retail Banking business 

amounted to € 54.2 billion or 19% of our total lending to the private sector. 

The following table sets forth savings and loans outstanding of the Group by sector at the dates 

indicated. 

(in billions of euro) December 31, 2005 December 31, 2004 

Mortgage loans 200.6 184.5 

Food and agri sector 48.2 39.5 

Small and medium sized business sector 83.3 76.3 

Savings 86.2 78.3 

With 39% of the Dutch savings market as of December 31, 2005, we are also the largest savings 

institution in the Netherlands. Of the total savings in the Netherlands, 37% are held by the local Rabobanks 

and 2% are held with Roparco, the savings arm of Robeco. We offer our clients a number of different savings 

options, including savings via the telephone and the internet. The www.rabobank.nl website is one of 

Europe’s most frequented internet banking sites, and the largest internet bank in the Netherlands with 2.2 

million unique visitors a month. We also offer internet banking services to our customers in Belgium, Ireland 

and since early 2006 New Zealand. Private customers are also able to use the services of IRIS, a securities 

research institute established jointly with Robeco, in order to help them manage their investment decisions. 

Obvion N.V. 

Obvion, our mortgage loan joint venture with the ABP pension fund, sells mortgage loans under its 

own brand via independent agents in the Netherlands. Through Obvion, we are targeting an increasing 

portion of the Dutch market share in order to strengthen our market leadership in mortgage loans. Obvion’s 

market share in the Netherlands at December 31, 2005 stood at 4%. 

Rabohypotheekbank N.V. 

Rabohypotheekbank, with statutory seat in Amsterdam, the Netherlands, provides mortgage lending 

documentation services to all of our local Rabobanks and is owned 95% by the local Rabobanks and is 

owned 5% by Rabobank Nederland. 

Rabohypotheekbank also serves as a supplementary financing vehicle for the local Rabobanks in the 

event that they choose not to make certain mortgage loans to their customers entirely on their own, either 

for liquidity or lending limit reasons or because of the nature of the required financing. The majority of 

Rabohypotheekbank’s loans are secured by mortgages on residential property. Its loans are funded by term 

loans from, or guaranteed by, Rabobank Nederland and by the issuance of mortgage bonds. 

Rabohypotheekbank does not engage in the financing of real estate development. At December 31, 2005, 

Rabohypotheekbank had assets of € 11.0 billion. 

73


Through RNCC, Rabobank International, Rabobank Structured Products we provide a variety of 

Wholesale and International Retail Banking services, including lending and special financing arrangements 

to both domestic and international corporate clients and advising on mergers and acquisitions and capital 

markets transactions. For the year ended December 31, 2005, our Wholesale and International Retail 

Banking operations accounted for 24%, or € 2,226 million, of our total income and 26%, or € 690 million, 

of our operating profit before taxation. At December 31, 2005, our Wholesale and International Retail 

Banking operations employed 5,960 full-time equivalent employees. 

Rabobank Nederland Corporate Clients 

RNCC focuses on the provision of Wholesale and International Retail Banking services to the Dutch 

corporate market. RNCC also operates in Belgium. RNCC offers a broad range of financial products and 

specialist services and works through sector and regional teams. In 2004, Rabobank Internationals food 

and agri research unit was added to RNCC after the services to the food and agri-market in the Netherlands 

was integrated in 2003. In cooperation with the local Rabobanks, these sector and regional teams offer an 

Allfinanz package that is tailored to our clients’ specific needs. 

Rabobank International 

Our business banking division, Rabobank International, operates on a global scale. The subsidiaries 

within our Rabobank International division have a comprehensive international network of offices, with 243 

offices in 31 countries outside the Netherlands. Rabobank International provides sophisticated financial 

products aimed at professional counterparts in the international financial markets. This involves trading, 

arbitrage and structured finance activities that have been placed in the various divisions of Rabobank 

International. However, its activities are primarily focused on enterprises in the food and agribusiness sector. 

In financing foreign corporate clients in the food services and agribusiness industries, Rabobank 

International concentrates on providing financing to entities engaged in processing and trading agricultural 

commodities, rather than primary agricultural activities. Rabobank International also makes loans to 

international corporate and government borrowers. At December 31, 2005, following earlier acquisitions in 

Australia and New Zealand in the 1990s and the former state-owned Irish ACC Bank and Valley Independent 

Bank in the United States in 2002, we are continuing to expand our country banking model on a global 

scale. In 2003, we strengthened our position as a leading lender to rural clients in Australia and New Zealand 

through the purchase of the rural lending portfolio of the New Zealand bank AMP Bank Limited. In order to 

sustain the platform for further growth in the Australian market, we decided to continue the activities of 

Primary Industry Bank of Australia under the Rabobank brand and its official name has become Rabobank 

Australia Limited. 

Also in 2003, we acquired two banks in the United States: Lend Lease Agri-Business and Ag Services 

of America, Inc. Lend Lease Agri-Business now operates under the name Rabo Agrifinance and offers longterm 

financing to agricultural enterprises in the United States, secured by land and the buildings erected on 

it. In December 2004, we acquired a 35% interest in the Polish bank BGZ in part through a new share 

issuance by BGZ, and in part from selling shareholders. BGZ is the leading bank for the Polish agricultural 

and food economy sectors. In 2005 Rabo Ag Services, specialised in harvest financing, mainly to American 

corn and soy growers, merged with Rabo AgriFinance into Rabo AgriFinance. In 2005 Rabobank 

International made a bid for the shares in Community Bank of Central California (CBCC). The acquisition 

was finalised in early 2006. Also in 2005, the name of Valley Independent Bank was changed to Rabobank 

North America. Furthermore Rabobank expanded its activities in Brazil by opening new offices focused on 

servicing the larger agricultural offices. Rabobank International’s retail activities accounted for more than 

20% of Rabobank International’s total income in 2005. 

Rabo Securities 

Rabo Securities operates Rabobank International’s wholesale equity securities activities. Its operations 

include share issues, mergers and acquisitions and equity research, sales and trading. Rabo Securities 

supports our funding activities by participating in underwriting issues of equity securities, generally for resale, 

in both the domestic and international markets and for both institutional and private investors. 

74

Rabobank Structured Products 

Rabobank Structured Products operates Rabobank International’s retail equity securities activities 

executing a variety of capital market transactions for clients of the local Rabobanks and Rabobank 

International. Rabobank Structured Products operates from London, Hong Kong and New York. Rabobank 

Structured Products also provides equity derivatives to private investors. 


We provide asset management and investment services to private, institutional and corporate investors 

primarily through the following subsidiaries: Robeco (asset management), Schretlen (private banking) and 

Alex (internet broker). For the year ended December 31, 2005, our Asset Management and Investment 

operations accounted for 8%, or € 718 million, of our total income and 9%, or € 250 million, of our 

operating profit before taxation. At December 31, 2005, our Asset Management and Investment operations 

employed 1,798 full-time equivalent employees. 

Robeco Group N.V. 

Robeco is headquartered in Rotterdam, the Netherlands, and has offices in Belgium, France, Germany, 

Switzerland, Italy and the United States. Robeco is engaged in asset management for private, institutional 

and corporate investors. Robeco also acts as the competence centre for asset management services within 

the Rabobank Group, offering financial products and services to our other asset management and 

investment operations. Robeco is the Dutch market leader in investment funds, with € 131.6 billion in assets 

under management at December 31, 2005. At December 2005 institutional clients accounted for 

approximately half of the assets managed by Robeco. Approximately one third of the assets managed 

comes from the American subsidiaries Robeco USA and Harbor Capital Advisors. Rabobank Nederland 

owns a 100% equity interest in Robeco. 

Schretlen & Co. N.V. 

As the asset management specialist for the high net-worth clients of the local Rabobanks, Schretlen 

undertakes our private banking activities both in the Netherlands and internationally. Schretlen’s operations 

are headquartered in Amsterdam, the Netherlands. Schretlen’s services are available to private individuals 

with a minimum of € 500,000 freely available for investment. In addition, Schretlen, in cooperation with the 

local Rabobanks, offers a standardised form of asset management, Rabobank Managed Investment, for 

private individuals with a minimum of € 150,000 in assets managed. The local Rabobanks, by using the 

standardised form of asset management, can offer their clients the choice of five standard investment 

portfolios, each managed by Schretlen and each with varying levels of risk. In addition, Schretlen focuses 

on small and medium-sized institutional investors. Schretlen had approximately € 6.5 billion in assets under 

management at December 31, 2005. 

Bank Sarasin & Cie AG 

In 2002, we acquired a 28% equity stake in Bank Sarasin & Cie AG (‘Sarasin’), with the option to 

increase our stake to a majority stake at any time before June 30, 2009. Sarasin offers investment 

consultancy and portfolio management services to private persons in Switzerland. As part of the joint 

venture, we contributed our International Private Banking activities, which had operations in various 

locations around the world. At December 31, 2005, Sarasin had approximately CHF 63.5 billion in assets 

under management. 

Alex 

In 2003, we acquired Alex, an internet broker, which focuses on active clients who prefer to place their 

own orders at more competitive rates, and the order telephone line VEB Bottomline. Alex and VEB 

Bottomline have been combined into a separate business unit of Rabobank Nederland under the name of 

Alex. Alex had € 3.3 billion in assets under management at December 31, 2005. 

Leasing 

Our leasing activities are undertaken primarily by De Lage Landen which provides factoring and leasing 

services to corporate borrowers, primarily in the food and agribusiness, technology, health care and banking 

industries in both the Netherlands and internationally. De Lage Landen is headquartered in Eindhoven, the 

Netherlands. 

75

In the Netherlands, De Lage Landen focuses on leasing and trade finance products. Leasing products 

include equipment leases, ICT leases, vendor leases and car and commercial vehicle leases (Translease). 

De Lage Landen’s strength in the Netherlands lies in its fast settlement of standard lease contracts and its 

specialist knowledge of various industry branches. De Lage Landen’s product range is marketed in the 

Netherlands through the local Rabobanks. De Lage Landen also directly markets its products. 

Internationally, De Lage Landen specialises in asset financing and vendor finance services, offering 

lease facilities for sales support via the sales channels of manufacturers and distributors of capital goods. 

De Lage Landen operates in more than 20 countries in Europe and the Americas, and also in Australia and 

New Zealand. De Lage Landen concentrates on enterprises with activities in agricultural machinery, 

telecommunications, computers, photocopiers, (internal) means of transport and medical equipment. De 

Lage Landen has a leading position in the vendor finance market. 

At December 31, 2005, De Lage Landen had a lease portfolio of approximately € 15.4 billion. Of 

this amount, € 7.5 billion was attributable to Europe, € 7.6 billion was attributable to America and € 0.3 

billion was attributable to the rest of the world. Operating profit before taxation from our Leasing operations, 

at € 235 million accounted for 9% of our operating profit before taxation for the year ended December 31, 

2005. 

At December 31, 2005, our Leasing operations employed 3,045 full-time equivalent employees. 

Real Estate 

We provide a variety of real estate services to institutional and corporate clients through our Rabo 

Vastgoed entity and FGH Bank. Rabo Vastgoed is our real estate project development and finance arm. 

Project development is carried out in close cooperation with the local Rabobanks. At December 31, 2005, 

its order portfolio, which comprises approved and current projects, amounted to € 3.8 billion. 

FGH Bank is a Dutch bank specialising in commercial real estate financing and conducting its activities 

under its own trademark within the Rabobank Group. Approximately 71% of its portfolio relates to 

investment financing. In addition, FGH Bank is active in project and land financing, trade financing, ‘sell off’ 

financing (i.e., selling rented houses to sitting tenants), operating leases, mortgage financing and interest 

rate derivatives. At December 31, 2005, FGH Bank had a financing portfolio of approximately € 7.8 billion 

in the Netherlands. 

Operating profit before taxation from our Real Estate operations, at € 108 million accounted for 4% of 

our operating profit before taxation for the year ended December 31, 2005. 

At December 31, 2005, our Real Estate operations employed 331 full-time equivalent employees. 

Competition 

We compete in the Netherlands with several other large commercial banks and financial institutions, 

such as ABN AMRO, ING and Fortis. As a result of the overall improving liquidity of Dutch corporations, 

increased emphasis by banks on the credit quality of borrowers and the deregulation of capital markets, 

competition among banks in the Netherlands has increased significantly during the past several years. In 

addition, life insurance companies and pension funds in the Netherlands have become major competitors 

in the markets for residential mortgage loans and private savings. 

In the Dutch market, we have a leading position in several financial services: newly granted mortgage 

loans (23% in 2005; source: Dutch Land Registry Office (Kadaster)), private savings (39% as of December 

31, 2005; source: Statistics Netherlands (Centraal Bureau voor de Statistiek)), small and medium-sized 

enterprises (38% in 2005, based on sample tests performed by ourselves) and the agricultural sector (83% 

in 2005, based on sample tests performed by ourselves). We also considerably strengthened our share of 

the larger corporate market. We also face strong competition in the international banking market. 

Percentages in this paragraph should be read as percentages of the relevant Dutch market as a whole. 

Employees 

We believe that achieving our clients’ goals through financial services goes hand-in-hand with the 

personal development of our employees. Accordingly, in our view, good working conditions, terms of 

employment and ongoing development of our managers and employees are preconditions for achieving our 

strategy. Management believes its employee relations are good. In June 2005, we reached agreement with 

our unions on a new two year Collective Labour Agreement (‘CLA’). 

76

In 2005, the number of employees at the combined local Rabobanks declined by 68. As part of our 

reorganisation program ‘Operation Service’, the number of employees of Rabobank Nederland is expected 

to gradually decline by nearly 1,200 full-time equivalent employees over the next couple of years, although 

the total number of employees is expected to remain stable. At December 31, 2005 the Rabobank Group 

had 50,988 employees (being 45,580 full-time equivalent employees), a decrease of 5,336 compared to 

December 31, 2004 due to the merger of Interpolis with Eureko/Achmea. 

Properties 

Rabobank Nederland and the local Rabobanks typically own the land and buildings used in the normal 

course of their business activities in the Netherlands. Outside the Netherlands, the Rabobank Group entities 

also typically own the land and buildings used in the normal course of their business activities. At December 

31, 2005, the local Rabobanks owned 1,249 branch offices within the Netherlands. In addition, our 

investment portfolio includes investments in land and buildings. Management believes that the Rabobank 

Group’s facilities are adequate for its present needs in all material respects. 

Environmental Policies and Social Responsibility 

We seek to conduct our business activities in a manner that is responsive to economic, environmental 

and social concerns. As a result, in client acceptance and in assessing credit applications we believe it is 

relevant to consider environmental and social issues. We therefore consider current environmental laws and 

regulations, and compliance with social standards, such as respect for the well-being of animals and the 

use of genetic modification, as we carry out our business activities. 

The local Rabobanks, in keeping with their cooperative tradition and common values, also seek to find 

a proper balance between the various interests of people, the market and society. The local Rabobanks 

attempt to reflect this balance in their lending policy, their engagement in local initiatives and the range of 

financial products offered to their clients. Sustainability also plays an important part in their advising on 

business plans and realignments. The choice in favour of environmentally friendly products and technology 

is often a source of innovation and helps to encourage suppliers of the Rabobank Group to operate in an 

environmentally friendly way. 

In 2003, we carried out a stakeholder consultation among social organisations, including trade unions 

and environmental development aid and human rights lobby groups. They gave their opinions on the Annual 

Responsibility and Sustainability Report and our corporate social responsibility policy stated therein. This 

feedback had an impact on our corporate social responsibility priorities for 2004: innovation and volume 

growth of sustainable products and services and corporate social responsibility as a testing criterion for 

lending. We have continued the stakeholder dialogue in 2004 and 2005. According to an appraisal in 

September 2005 from the Swiss-based environmental rating agency Sustainable Asset Management 

Group, the Rabobank Group ranked among the international banking leaders in the area of sustainability. 

The Rabobank Group achieved the highest score in the European banking sector and achieved second 

place worldwide. The previous appraisal in 2003 also placed the Rabobank Group among the European 

and worldwide leaders. 

Legal Proceedings 

We are involved in litigation and arbitration proceedings in the Netherlands and in foreign jurisdictions, 

including the United States, involving claims by and against us which arise in the ordinary course of our 

businesses, including in connection with our activities as an insurer, lender, employer, investor and taxpayer. 

While it is not feasible to predict or determine the ultimate outcome of all pending or threatened proceedings 

and litigation, management believes that the ultimate outcome of the various proceedings and litigation 

already commenced, and/or any future proceedings and litigation, will not have a material adverse effect on 

our financial condition, given our size, robust balance sheet, stable income stream and prudent provisioning 

policy. 

Stutts, et al. v. The De Dietrich Group, et al. In 2003, the Rabobank Group was named as a defendant 

in Stutts, et al. v. The De Dietrich Group, et al. filed in the U.S. District Court for the Eastern District of New 

York. In the suit, certain U.S. veterans of the first Gulf War allege that they have sustained injuries as a result 

of the Rabobank Group (among other banks) having served as a correspondent bank with respect to letters 

of credit obtained by the Iraqi government in order to purchase materials that may have been used in the 

manufacture of chemical weapons. A response has been filed as well as a motion to dismiss the suit. 

Rabobank Group continues to vigorously defend the suit. 

77

Insurance 

On behalf of all entities of the Rabobank Group Rabobank has taken out a group policy that is 

customary for the financial industry. The management of Rabobank is of the opinion that this insurance - 

banker’s blanket and professional indemnity - is of an adequate level. 

78

THE RABOBANK GROUP STRUCTURE 

Coöperatieve Centrale Raiffeisen-Boerenleenbank B.A. (Rabobank Nederland), having its statutory 

seat in Amsterdam, is a cooperative entity formed primarily as a result of the merger of the two largest 

banking cooperative entities in the Netherlands on December 22, 1970. A cooperative under Dutch law has 

members and has the statutory objective to provide for certain material needs of its members. Rabobank 

Nederland is registered with the Trade Register of the Chamber of Commerce in Amsterdam, the 

Netherlands under number 30046259 and our executive offices are located at Croeselaan 18, 3521 CB 

Utrecht, the Netherlands. Our telephone number is +31 (0)30 2160000. 

Membership in Rabobank Nederland is open only to cooperative banks whose articles of association 

have been approved by Rabobank Nederland. Besides being a member of Rabobank Nederland, each local 

Rabobank has shares in Rabobank Nederland. The shares are fully paid up on issuance and are not 

permitted to be pledged, given in usufruct, or otherwise encumbered, alienated or transferred. The articles 

of association provide that shares may be issued only pursuant to a resolution of the General Meeting 

proposed by Rabobank Nederland’s Executive Board and approved by its Supervisory Board. Pursuant to 

the articles of association, each local Rabobank is obliged, by virtue of its membership, to participate in any 

future issue of shares in the same proportion as the proportion which existed in the year preceding the year 

of issue, between its balance sheet total and the sum of the balance sheet totals of all local Rabobanks. 

Since 1995, no new shares have been issued. At December 31, 2005, 1.4 million shares (for an aggregate 

amount of € 638 million) had been issued to the local Rabobanks. 

As members of Rabobank Nederland, the local Rabobanks have certain ownership rights with respect 

to Rabobank Nederland. However, their position with respect to ownership cannot be compared to the 

position of shareholders in a corporation. Pursuant to Rabobank Nederland’s articles of association, if, in 

the event of Rabobank Nederland’s liquidation, whether by court order or otherwise, its assets should prove 

to be insufficient to meet its liabilities, the local Rabobanks, as members of Rabobank Nederland at the time 

of the liquidation as well as those who ceased to be members in the year prior to the liquidation, shall be 

liable for the deficit in proportion to their respective last adopted balance sheet totals. If it should prove 

impossible to recover the share of one or more liable members or former members in the shortfall, the 

remaining liable parties shall be liable in the same proportion for the amount not recovered. Under the articles 

of association of Rabobank Nederland, the total amount for which members or former members are liable 

shall never exceed 3% of its last adopted balance sheet total. However, this limitation of liability under the 

articles of association of Rabobank Nederland does not affect the liability of the local Rabobanks under the 

Cross-Guarantee System and their liability under the compensation agreements, referenced below. 

Rabobank Nederland’s functions within the Rabobank Group can be broadly divided into several areas. 

Traditionally, an important task of Rabobank Nederland has always been its function as bankers’ bank. 

Another major task is the service task. As far as service is concerned, the first priority is to provide service 

to the local banks in the form of support, advice and guidance. Rabobank Nederland negotiates rights in 

the name of the local Rabobanks and enters into commitments on their behalf, provided that such 

commitments have the same implications for all local Rabobanks (for instance, the entering into collective 

labour agreements on behalf of the local Rabobanks). Furthermore, Rabobank Nederland is entrusted with 

the supervision of the local Rabobanks pursuant to the provisions of the Act on the Supervision of the Credit 

System 1992 (Wet toezicht kredietwezen 1992). Finally, Rabobank Nederland operates its own banking 

business, both complementary to and independent of the business of the local Rabobanks and is the 

holding company of the specialised subsidiaries. 

The local Rabobanks are organised as cooperative entities under Dutch law and draw all of their 

members from their customers. Through mergers the number of local Rabobanks has decreased from 288 

at December 31, 2004 to 248 at December 31, 2005. At December 31, 2005, the local Rabobanks had 

approximately 1.55 million members, an increase of approximately 95,000 members from the previous year. 

Members of the local Rabobanks do not make capital contributions to the local Rabobanks and are not 

entitled to the equity of the local Rabobanks. Members are not liable for any obligations of the local 

Rabobanks. 

Internal Liability (Cross-guarantee system) 

Through their mutual financial association, various legal entities within the Rabobank Group together 

make up a single organisation. An internal liability relationship exists between these legal entities, as referred 

to in Section 12 of the Act on the Supervision of the Credit System 1992 (Wet toezicht kredietwezen 1992). 

This relationship is formalised in an internal ‘cross-guarantee’ system, which stipulates that if a participating 

79

institution has insufficient funds to meet its obligations towards its creditors, the other participants must 

supplement that institution’s funds in order to enable it to fulfil those obligations. 

Participating entities within the Rabobank Group are: 


the local Rabobanks 

De Lage Landen International B.V. 

De Lage Landen Financiering B.V. 

De Lage Landen Trade Finance B.V. 

De Lage Landen Financial Services B.V. 

Schretlen & Co. N.V. 

Rabohypotheekbank N.V. 

Raiffeisenhypotheekbank N.V. 

For regulatory and financial reporting purposes, Rabobank Nederland and the local Rabobanks, as 

well as the participating subsidiaries are treated as one consolidated entity. 

403 Declaration 

Rabobank Nederland has assumed liability for the debts arising from legal transactions of a number of 

other Rabobank Group companies under Section 2:403 of the Dutch Civil Code. 

Compensation Agreements 

The local Rabobanks are also parties to several compensation agreements whereby shortfalls of local 

Rabobanks with respect to equity, profitability, loan loss reserves and due to financing losses are financed 

by charging all other local Rabobanks. 

Rabobank Nederland’s ‘Central Bank’ Activities 

Capital Adequacy and Liquidity 

The cross-guarantee system operates in concert with the regulatory and administrative oversight of 

the local Rabobanks by Rabobank Nederland. Notwithstanding the fact that Rabobank Nederland and the 

local Rabobanks are supervised by the Dutch Central Bank on a consolidated basis, based on the law 

(section 12 of the Act on the Supervision of the Credit System 1992 (Wet toezicht kredietwezen 1992)) 

Rabobank Nederland has the responsibility for ensuring compliance by the local Rabobanks with the Dutch 

Central Bank’s capital adequacy and liquidity regulations. The Dutch Central Bank’s capital adequacy 

regulations are intended to preserve a bank’s ability to withstand loan losses and other business risks 

through reserves and retained earnings. The internal standards actually applied by Rabobank Nederland, 

however, are more conservative than the regulations promulgated by the Dutch Central Bank. This policy 

partly reflects the fact that local Rabobanks, which cannot raise new capital by the issue of shares, can only 

grow and maintain an appropriate ratio of reserves to total liabilities by making profits. Any local Rabobank 

whose ratio of reserves to total liabilities fails to meet internal solvency standards is subject to stricter 

supervision by Rabobank Nederland. In particular, Rabobank Nederland may restrict such local Rabobank’s 

authority to make lending decisions within the Rabobank Group lending limits. 

The local Rabobanks are permitted to have accounts only with Rabobank Nederland, which is the sole 

outlet for each local Rabobank’s excess liquidity and acts as treasurer to the local Rabobanks. Each local 

Rabobank is also required by Rabobank Nederland to keep a certain portion of its own deposits on current 

account with Rabobank Nederland. 

80

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF 

OPERATIONS 

The following discussion should be read in conjunction with the financial statements and the notes 

thereto of the Rabobank Group included in this Offering Circular. The financial statements for the year ended 

December 31, 2005 have been prepared in accordance with International Financial Reporting Standards 

and the comparative figures for the year ended December 31, 2004 have been restated accordingly. The 

2004 financial statementst have also been prepared in accordance with Dutch GAAP which enables a 

comparison with the 2003 financial statements. No reconciliation of the financial statements of the 

Rabobank Group included in this Offering Circular to U.S. GAAP has been prepared. You should refer to 

‘Summary of Principal Differences between IFRS and U.S. GAAP’ and ‘Summary of Principal Differences 

between Dutch GAAP and U.S. GAAP’ for a description of the significant differences between IFRS and 

U.S. GAAP and Dutch GAAP and U.S. GAAP.Certain financial data in this chapter has not been directly 

extracted from the audited financial statements but instead is unaudited and derived from the accounting 

records of Rabobank Nederland. 

Business Overview 

The Rabobank Group is one of the largest banking organisations in the Netherlands and the largest 

mortgage lending and savings organisation in the Netherlands by market share. We are one of the 25 largest 

banking institutions in the world in terms of assets and Tier I capital. We offer a broad range of financial, 

insurance and asset management services across retail, corporate and commercial sectors, both 

domestically and internationally. The Rabobank Group has the highest credit ratings awarded by the 

international rating agencies Moody’s (Aaa since 1986) and Standard & Poor’s (AAA since 1984). On a 

consolidated basis, our total assets were € 506 billion at December 31, 2005. At that date, we had 45,580 

full-time equivalent employees (or FTEs). 

The Rabobank Group is comprised of the cooperative Rabobank Nederland, the cooperative local 

Rabobanks which are members of Rabobank Nederland and are also licensed credit institutions, and 

Rabobank Nederland’s specialised subsidiaries. We had 248 local Rabobanks and 1,249 branches located 

throughout the Netherlands at December 31, 2005. The local Rabobanks are themselves cooperative 

entities that draw all of their members from their customers. See ‘The Rabobank Group Structure’. 

Rabobank Nederland, the local Rabobanks and certain subsidiaries in the Rabobank Group are linked 

through a ‘cross-guarantee system’. The cross-guarantee system provides for intra-group credit support 

among Rabobank Nederland, all local Rabobanks and certain of our subsidiaries that are the other 

participating institutions. Under the cross-guarantee system, funds are made available by each participating 

institution if another participant suffers a shortfall in its funds. If a participating institution is liquidated and

Through Rabobank Nederland, the local Rabobanks and our specialised subsidiaries, the Rabobank 

Group provides services in the following five core business areas: Domestic retail Banking, wholesale and 

international retail banking, asset management, leasing and real estate. 

Factors Affecting Results of Operations 

General Market Conditions 

Our results of operations are affected by a variety of market conditions, including economic cycles, 

fluctuations in stock markets, interest rates and increased competition. Since the second half of 2001, the 

growth in European banking markets has slowed, linked to the overall slowdown of the continental European 

major economies. However, the more difficult economic environment has not led to materially higher 

corporate or retail loan provisioning by the Rabobank Group. Our current expectation for 2006 is that the 

Dutch economy will show a modest growth. 

In 2005, approximately 75% of our total income and 58% of our consolidated results were derived from 

our Dutch operations. Accordingly, changes in the Dutch economy, the levels of Dutch consumer spending 

and changes in the Dutch real estate market, securities and other markets may have a material effect on 

our operations. However, because of our high level of product diversification, we have not experienced major 

fluctuations in our levels of profitability in the past. Despite the difficult economic environment in the 

Netherlands our net result has increased every year since 2001. Outside of the Netherlands, the markets 

we focus on i.e. principally food and agribusiness are impacted by business cycles only in a limited way. 

Although we expect that the foregoing factors will continue to affect our consolidated results of 

operations, we believe that the impact of any one of these factors is mitigated by our high level of product 

diversification. However, a protracted economic downturn in the Netherlands and our other major markets 

could have a material negative impact on our results of operations. 

Interest Rates 

Changes in prevailing interest rates (including changes in the difference between the levels of prevailing 

short-term and long-term rates) can materially affect our results. For example, the relatively low interest rate 

risk environment in the Netherlands and our other major markets has driven rapid growth in mortgage 

volumes, which is positive. However, a low interest rate environment also adversely affected our results, due 

to the structure of our balance sheet. We have a high level of non- and low-interest bearing liabilities (our 

reserves, balances on payment accounts and current accounts). Generally, a sustained period of lower 

interest rates will reduce the yields on the assets that are financed with these liabilities. Conversely, rising 

interest rates should, over time, increase investment income but may, at the same time, reduce the market 

value of pre-existing investment portfolios. Rising rates can also lead to higher or lower interest margins 

depending on whether our interest-earning assets reprice at a faster rate than interest-bearing liabilities or 

the degree to which the spreads on assets or liabilities narrow or widen. 

As discussed under ‘Risk Management — Interest Rate Risk’, we generally take a limited interest rate 

position that is managed within strict limits and designed to take advantage of expected changes in interest 

rates and the yield curve. 

Stock Market Fluctuations 

Stock markets around the world have experienced significant declines from the levels prevailing in 

2000. These changing conditions have impacted our results. From 2003, the stock markets, after reaching 

a low point in the first quarter, were able to recover, increased slightly further in 2004 and showed a strong 

growth in 2005 (except in the United States). This recovery had a positive influence on our results. A 

protracted or steep decline in the stock or bond markets could again adversely affect these activities and 

our other financial assets. 

Critical Accounting Policies 

We have identified below the accounting policies that are most critical to our business operations and 

the understanding of our results. In each case, the application of these policies requires management to 

make complex judgements based on information and financial data that may change in future periods, the 

results of which can have a significant effect on our results of operations. As a result, determinations 

regarding these items necessarily involve the use of assumptions and judgments as to future events and are 

subject to change. Different assumptions or judgments could lead to materially different results. See the 

82

footnotes to our audited consolidated financial statements elsewhere in this Offering Circular for additional 

discussion of the application of our accounting policies. 

Value adjustments 

Management regularly assesses the adequacy of the provision for loan losses, by performing ongoing 

evaluations of the loan portfolio. Rabobank Group’s policies and procedures to measure impairment are 

IFRS compliant. Rabobank considers a loan to be impaired when based on current information and events 

it is probable that it will not be able to collect all amounts due (principal and interest) according to the original 

contractual terms of the loan. 

Rabobank distinguishes: 

• Specific provisions for large impaired corporate loans. For these loans impairment is measured 

on a case by case basis. Once a loan is identified as impaired, the impairment amount is 

measured as the difference between the carrying amount and the recoverable amount of the loan. 

The recoverable amount equals the present value of expected future cash flows discounted at 

the loan’s effective rate; 

• Collective retail provisions for loans that are not significant enough to be assessed individually. 

Retail portfolios of loans that are not individually assessed for impairment are grouped into pools, 

based on similar risk characteristics and are collectively assessed for impairment; and 

• An IBNR (Incurred But Not Reported) provision for losses on loans that have been incurred but 

have not yet been individually identified at the balance sheet date. Non-impaired loans are 

included in groups with similar risk characteristics and are collectively assessed for the potential 

losses which experience, based on historic indicators are present in the portfolio. The purpose 

of the collective assessment of unimpaired loans is to determine the amount of impairment on 

those loans for which default has occurred but has not been identified in the risk management 

systems of the bank. 

The impairment amount thus determinated is recorded in the profit and loss account as a bad debt 

expense with the corresponding credit posted as an provision against the loan balance in the balance sheet. 

A Provisioning Committee headed by a member of the Executive Board decides twice a year on 

provision-taking for all impaired loans above a certain threshold (currently over € 20 million). 

Trading activities 

Our trading portfolio is carried at fair value based on market prices or model prices if the market prices 

are not available. The market value of financial instruments in our trading portfolio is generally based on listed 

market prices or broker dealer price quotations. If prices are not readily determinable fair value is based on 

valuation models. The fair value of certain financial instruments, including OTC derivative instruments, are 

valued using valuations models that consider, among other factors, contractual and market prices, 

correlations, time value, credit, yield curve volatility factors and/or prepayment rates of the underlying 

positions. 

International Financial Reporting Standards 

As from 2005, Rabobank Group prepares its financial statements in accordance with International 

Financial Reporting Standards (‘IFRS’), as adopted by the European Commission.These standards will 

replace the current Guidelines for Annual Reporting in the Netherlands. Application of IFRS is expected to 

increase transparency and enable a better international comparison of companies’ results. Reporting to the 

supervisory authorities is based on IFRS as well. The new standards have resulted in changes not only to 

the accounting policies, but also to the additional information that is disclosed in the notes to the financial 

statements. 

83

Results of operations 

Year ended December 31, 

(in millions of euro) 2005 2004 2004 2003 

Interest 6,407 6,195 6,249 5,956 

Fees and commission 2,217 1,872 2,112 1,852 

Other income 739 1,155 1,694 1,210 

Total income 9,363 9,222 10,055 9,018 

Staff costs 3,880 3,683 4,029 3,770 

Other administrative expenses 1,953 2,173 2,335 2,101 

Depreciation 331 321 368 372 

Total expenses 6,164 6,177 6,732 6,243 

Gross operating profit 3,199 3,045 3,323 2,775 

Value adjustments 517 479 514 427 

Operating profit before taxation 2,682 2,566 2,809 2,348 

Taxation 599 733 957 712 

Net Profit 2,083 1,793 1,536 1,370 

The first two columns corresponding to the years 2005 and 2004 are based on IFRS. The other 

columns corresponding to the years 2004 and 2003 are based on Dutch GAAP. Hence the figures of 2005 

and 2003 are not comparable. 

Year ended December 31, 2005 compared to year ended December 31, 2004 based on IFRS. 

Income. Total income rose by 2% to € 9,363 million compared to € 9,222 million in 2004. Fees and 

commission income in particular increased sharply in 2005, while other income was lower. Interest 

accounted for 68% of total income in 2005 compared to 67% of total income in 2004. 

Interest. Interest income in 2005 was € 6,407 million compared to € 6,195 million, an increase of 3%. 

This was lower than the growth in lending and savings, reflecting the significant narrowing of the interest 

margin under pressure from increased competition and flattening of the yield curve. 

Fees and commission. Total fees and commission increased by 18% or € 345 million to € 2,217 million 

compared to € 1,872 million in 2004. This increase was due mainly to higher commission income from asset 

management and other commission income, which includes fees and commission income from Global 

Financial Markets. 

Other income. Other income was down 36% at € 739 million compared to € 1,155 million in 2004. 

This item includes the insurance and trading results, the bank’s share in the results of associates and the 

results on available-for-sale financial assets. The results of insurance and of associates were both strong. 

Income was down as a result of fewer exits at Gilde funds (after the successful year 2004) but also because 

fewer funds were consolidated compared to 2004. The trading results, the results on available-for-sale 

financial assets and a large proportion of the other income are relatively volatile, because these items are 

heavily influenced by exchange-rate and interest-rate movements. Losses of other income were largely 

attributable to ‘swaptions’ arranged by Rabobank with its pension fund. 

Total expenses. Total expenses decreased fractionally in 2005, down € 13 million to € 6,164 million 

compared to € 6,177 million in 2004, due to lower other administrative expenses. Staff costs and 

depreciation were slightly higher. 

Staff costs. Staff costs were up 5% at € 3,880 million compared to € 3,683 million in 2004, mainly 

reflecting higher pension expenses. Wages and salaries were 3% higher. The number of FTEs decreased in 

2005 by 4,636 to 45,580, largely as a consequence of the sale of Interpolis to Eureko. Adjusted for this 

effect, there was an increase of just over 1%, reflecting the growth in the bank’s international operations. 

84

Other administrative expenses. Other administrative expenses, which include IT costs and rents were 

10% lower, down € 220 million at € 1,953 million compared to € 2,173 million in 2004. This decrease 

reflects in part the sale of equity investments by Gilde funds, which are therefore no longer included in the 

consolidation. Operation Service also yielded the first cost savings. An additional provision of € 85 million 

was formed for Operation Service in 2005, on top of the provision of € 120 million formed in 2004. 

Depreciation. Depreciation rose 3% to € 331 million compared to € 321 million in 2004. 

Value adjustments. Value adjustments, which comprise loan losses and losses on financial assets, 

were 8% higher at € 517 million compared to € 479 million in 2004, equivalent to 25 basis points compared 

to 25 basis points in 2004 of the average risk-weighted items. Risk-related costs in 2005 were incurred 

largely as a result of the growth of the international activities of the wholesale and international retail business 

unit, where value adjustments were higher last year as a result of the formation of several new provisions 

for activities in other countries. Value adjustments for the Dutch retail banking business were lower, reflecting 

the low risk profile of the loan portfolio, which consists predominantly of personal lending. 

Taxation. Taxation in 2005 amounted to € 599 million compared to € 773 million to 2004, equivalent 

to an effective tax rate of 22.3% compared to 30.1% in 2004. The lower tax burden was due chiefly to the 

lower rate of Dutch corporation tax and incidental tax income. 

Net profit. Net profit in 2005 was 16% higher at € 2,083 million compared to € 1,793 million in 2004. 

After the deduction of minority interests and payment to holders of Rabobank Member Capital and Trust 

Preferred Securities, in so far as these are counted as equity, the remaining sum of € 1,577 million compared 

to € 1,392 million in 2004 has been appropriated to equity. 

Year ended December 31, 2004 compared to year ended December 31, 2003 based on Dutch GAAP. 

Income. Total income increased by 11% to € 10,055 million (2003: € 9,018 million). The growth 

percentage was boosted by acquisitions and Interpolis’ accounting policy change. Excluding the impact of 

these developments income growth was 7%. Interest accounted for 62% of total income in 2004 compared 

to 66% of total income in 2003. 

Interest and interest margin. Interest income in 2004 was € 6,249 million (2003: € 5,956 million), an 

increase of 5%. The increase is lower than in previous years and also lower than the 7% growth in private 

sector lending. The levelling-off of growth in interest income is attributable to a lower interest margin. The 

interest margin was squeezed, because of fierce competition in the mortgage and savings market and a 

decline of the difference between short-term and long-term interest rates. In addition, many clients repaid 

their mortgages prematurely in previous years as a result of the low interest rates and then refinanced them 

at a lower interest rate. This yields extra income in the short term, but lower interest income in the longer 

term. These effects are now being felt. Interest margin of the Rabobank Group as a percentage of average 

total assets, decreased from 1.50% in 2003 to 1.40% in 2004, based on month-end balances. 

Income from securities and participating interests. Income from securities and participating interests 

rose by € 129 million to € 482 million in 2004 compared to € 353 million in 2003. The figure of 2003 has 

been restated in connection with the change in accounting policy concerning the recognition of investment 

results on insurance activities. 

Commission. Total commission increased by 14% or € 260 million to € 2,112 million compared to 

€ 1,852 million in 2003 due to improved market conditions. 

Securities brokerage. Securities brokerage in 2004 increased by 15% to € 342 million, compared to 

€ 297 million in 2003. A substantial part of the increase was due to the acquisition of Alex in April 2003. 

Despite the decline in the number of orders, commissions earned by Alex increased. Commission income 

of the local Rabobanks also increased. 

Asset management fee. Asset management fees consist of the greater part of management fees 

received from the investment funds, as well as placement fees. Asset management fees were 18% higher 

at € 456 million compared to € 385 million in 2003 due to the organic growth of our business. 

Result on financial transactions. Results on financial transactions increased in 2004 by 84% or € 142 

million to € 312 million, compared to € 170 million in 2003. Results on financial transactions are realised 

mainly by the wholesale banking business. The increase mainly reflects the favourable results on the trading 

portfolio as a result of favourable market conditions. 

85

Other income. Other income increased by € 213 million in 2004 to € 900 million compared to € 687 

million in 2003. The increase was principally due to the better results of Interpolis and De Lage Landen. 

Expenses. Operating expenses rose by 8% or € 489 million in 2004 to € 6,732 million compared to 

€ 6,243 million in 2003. Adjusted for non-recurring charges for provisions and acquisitions, organic growth 

in expenses was 4%. 

Staff costs. Staff costs increased by € 259 million in 2004 to € 4,029 million, a rise of 7% compared 

to € 3,770 million in 2003. Besides regular salary increases and a non-recurring payment, a portion of the 

increase can be attributed to additions to the pension provisions. Rabobank Group’s workforce decreased 

by 633 FTEs to 50,216 FTEs. The number of jobs declined particularly at the local Rabobanks, Rabobank 

Nederland, Robeco and Interpolis as part of our ongoing efforts to increase efficiency, while De Lage 

Landen, the wholesale activities and international retail activities, among others, saw the number of jobs 

increase. 

Other administrative expenses and depreciation. Other administrative expenses were 11% higher at 

€ 2,335 million compared to € 2,101 million in 2003. The increase is largely attributable to provisions. A 

substantial part of additions to provisions related to the restructuring programmes at Rabobank Nederland, 

which involved an amount of € 120 million. Depreciation of buildings and fixtures and fittings decreased by 

€ 4 million to € 368 million compared to € 372 million in 2003. 

Value adjustments. Under Dutch GAAP value adjustments can be separated into value adjustments to 

receivables and value adjustments to financial fixed assets. Value adjustments to receivables decreased in 

2004 by € 50 million to € 525 million compared to € 575 million in 2003. This decrease is almost entirely 

due to the improved international economic conditions for our international wholesale and retail activities. 

Our domestic retail banking operations, on the other hand, showed a relatively large increase, partly 

reflecting a greater number of bankruptcies in the Netherlands. However, the increase as a percentage of 

the average risk-weighted assets of the banking activities decreased from 35 basis points in 2003 to 29 

basis points in 2004, reflecting a general improvement in our asset quality. Value adjustments to financial 

fixed assets amounted to minus € 11 million, in 2004, compared to minus € 148 million in 2003. The 2003 

figure has been restated in connection with the change in accounting policy concerning the recognition of 

investment results on insurance activities. The decrease was attributable to lower unrealised price gains on 

the insurance securities portfolio of Interpolis. 

Net profit. After taxes of € 957 million and third-party interests of € 316 million, net profit amounted 

to € 1,536 million, up 12% compared to € 1,370 million in 2003 for the reasons outlined above. 

86

Segment Discussion 1 


The following table sets forth certain summarised financial information for the Rabobank Group’s 

Domestic Retail Banking business for the years indicated. 



Interest 4,176 3,949 4,309 4,193 

Fees and commission 1,205 1,156 1,022 935 

Other income 50 68 67 45 


Staff costs 1,990 1,836 1,666 1,680 

Other administrative expenses 1,581 1,746 1,723 1,594 



Gross operating profit 1,696 1,419 1,823 1,693 



Taxation 497 415 

Net Profit 1,024 757 





Income. Although the tentative economic recovery which started in the Netherlands in 2004 did not 

resume until the second half of 2005, income was 5% higher at € 5,431 million compared to € 5,173 million 

in 2004. 

Interest. Net interest, which accounts for most of the income, rose 6% to € 4,176 million compared 

to € 3,949 million in 2004. Largely due to the narrow margins resulting from the levelling-out of the yield 

curve and increased competition on the mortgage market, the growth in net interest income was unable to 

keep pace with the growth in lending and savings. With many private and business borrowers taking 

advantage of the low mortgage interest rates last year to refinance on more favourable terms, interest 

income benefited from one-off payments of penalty interest. In order to neutralise part of this effect, 

derivative contracts linked to the mortgage loans were likewise repaid prematurely, which resulted in losses. 

As a result of these two effects interest income showed a net increase. On total interest income showed a 

net increase. Interest income for 2004 includes a non-recurring charge on the investment portfolio. 

Fees and commission. Fees and commission was up 4% at € 1,205 million compared to € 1,156 

million in 2004, reflecting the improved stock market climate which generated higher commission income 

from securities. Fees and commission income from funds transfer and insurance was also higher. 

Other income. Other income was € 18 million lower at € 50 million compared to € 68 million in 2004. 

Expenses. Total expenses were 1% lower at € 3,735 million compared to € 3,754 million in 2004, 

reflecting a decrease in other operating expenses. 

1) The Segment Discussion is only impacted by the change in accounting policy concerning the recognition of investment results on insurance activities 

with effect from January 1, 2004. 

87

Staff costs. Staff costs rose 8% to € 1,990 million compared to € 1,836 million in 2004, due to higher 

pension expenses, regular salary adjustments and increased expenditure on temporary staff. The number 

of internal FTEs decreased marginally to 28,909 in 2005 compared to 28,970 in 2004. 

Other administrative expenses. Other administrative expenses were € 165 million lower at € 1,581 

million compared to € 1,746 million in 2004, due to a decrease in expenses charged by Rabobank 

Nederland to the affiliated banks. 

Depreciation. Depreciation was 5% lower at € 164 million compared to € 172 million in 2004. 

Value adjustments. Value adjustments were € 72 million lower at € 175 million compared to € 247 

million in 2004. Risk-related costs amounted to 14 basis points of the average risk-weighted assets. This is 

7 basis points lower than in 2004, in line with the improvement in the loan portfolio, which consists 

predominantly of personal lending. 

Taxation. Taxation in 2005 amounted to € 497 million compared to € 415 million to 2004. 

Net profit. Net profit was 35% higher at € 1,024 million compared to € 757 million in 2004. 

Year ended December 31, 2004 compared to year ended December 31, 2003, based on Dutch GAAP 

Income. Income increased by 4% to € 5,398 million in 2004 compared to € 5,173 million in 2003. 

Interest accounted for 80% of total income. The increase was due to higher interest income and higher 

commission. This increase is less than the growth in lending due to tighter interest margins. 

Interest. Interest increased by 3% to € 4,309 million in 2004 compared to € 4,193 million in 2003. The 

increase was attributable to the growth in loans and the level of savings. However, the increase in income 

was limited because of a lower interest margin due to the relatively higher rate on savings and the declining 

gap between long-term and short-term interest rates. In addition, due to the low interest rates many clients 

repaid their mortgages prematurely in the past few years or refinanced them at lower interest rates, which 

in the short term, yields extra income, but in the longer term, translates into lower interest income. 

Commission. Commission increased by 9% to € 1,022 million in 2004 compared to € 935 million in 

2003. The increase was attributable to higher volumes in securities brokerage and insurance and payment 

services. 

Expenses. Operating expenses increased by 3% to € 3,575 million in 2004 compared to € 3,480 

million in 2003. The increase was mainly due to higher other administrative expenses. 

Staff costs. Staff costs declined by 1% to € 1,666 million in 2004 compared to € 1,680 million in 2003. 

Salary increases and a non-recurring payment were more than offset by the impact of a decrease of 904 in 

the number of FTEs. 

Other administrative expenses. Other administrative expenses were 8% higher in 2004 at € 1,723 

million compared to € 1,594 million in 2003. The increase is largely due to investments in a new Customer 

Relations Management system at the local Rabobanks. 

Value adjustments. Value adjustments increased by € 85 million to € 299 million in 2004 compared to 

€ 214 million in 2003. The increase was due to the continuing sluggish economic situation and the 

increasing number of bankruptcies in the Netherlands. 

Operating profit before taxation. Operating profit before taxation increased by 3% or € 45 million to 

€ 1,524 million in 2004 compared to € 1,479 million in 2003, for the reasons outlined above. 

88



Wholesale and International Retail Banking business for the years indicated. 



Interest 1,415 1,374 1,115 1,120 

Fees and commission 511 342 376 315 



Staff costs 760 749 675 598 

Other administrative expenses 477 566 414 337 


Total expenses 1,277 1,357 1,120 967 

Gross operating profit 950 904 1,042 987 


Operating profit before taxation 690 785 908 649 


Net Profit 573 555 




Year ended December 31, 2005 compared to year ended December 31, 2004, based on IFRS. 

Income. Total income was down 2% at € 2,226 million compared to € 2,261 million in 2004, mainly 

due to fewer major exits by Gilde funds compared with 2004. Income was higher at our Global Financial 

Markets unit, thanks to the issue of structured products such as the Rabo Performance Clicker and the 

Asset Backed RentePlus Obligatie. Our Corporate Finance unit reported lower income in 2005, but in 

international retail operations, the growth in lending more than outweighed the effects of narrower margins, 

and income in 2005 was higher. Over 20% of total income is now generated by retail banking. The food and 

agri sector accounted for 26% of total income and 55% of total income was generated in Europe, 29% in 

North and South America and the remainder in Asia, Australia and New Zealand. 

Interest. Interest increased by 3% to € 1,415 million compared to € 1,374 million in 2004. 

Fees and commission. Fees and commission increased by 49% or € 169 million to € 511 million 

compared to € 342 million in 2004. The increase was mainly attributable to higher fees and commission 

income from Global Financial Markets. 

Other income. Other income declined by € 244 million to € 301 million compared to € 545 million in 

2004. Income was down as a result of fewer exits at Gilde funds (after the successful year 2004) but also 

because fewer funds were consolidated than in 2004. 

Total expenses. Total expenses decreased 6% to € 1,277 million compared to € 1,357 million in 2004. 

Staff costs. Staff costs increased by 1% to € 760 million compared to € 749 million in 2004. Because 

it occurred mainly in the closing months of 2005, the increase in the number of FTEs from 5,499 to 5,960 

had only a limited effect on staff costs. 

Other administrative expenses. Other administrative expenses decreased 16% to € 477 million 

compared to € 566 million in 2004. Other administrative expenses were lower, due to the deconsolidation 

of a number of equity investments by Gilde funds. 

89

Depreciation. Depreciation was 5% lower at € 40 million compared to € 42 million in 2004. 

Value adjustments. Value adjustments increased to € 259 million compared to € 119 million in 2004. 

Risk-related costs amounted to 56 basis points of the risk-weighted assets compared to 30 basis points in 

2004. Risk-related costs were low in 2004 from a historical perspective, but were slightly above the longterm 

average in 2005, due to the formation of several new provisions for non-domestic operations. 

Taxation. Taxation in 2005 amounted to € 117 million compared to € 230 million to 2004. Taxes were 

lower as result of the lower Dutch corporate tax rate and due to fewer tax driven deals from Corporate 

Finance. 

Net profit. In a challenging market, Rabobank achieves a 3% growth of net profit to € 573 million 

compared to € 555 million in 2004. 

Year ended December 31, 2004 compared to year ended December 31, 2003, based on Dutch GAAP. 

Income. Income increased by 11% to € 2,162 million in 2004 compared to € 1,954 million in 2003. 

The increase in income was principally due to higher other income and commission. 

Interest. Interest was virtually unchanged at € 1,115 million in 2004 compared to € 1,120 million in 

2003. 

Commission. Commission increased by 19% or € 61 million to € 376 million in 2004 compared to 

€ 315 million in 2003. The increase was mainly attributable to higher commissions earned on tailored 

structured finance transactions on behalf of clients. 

Other income. Other income increased by € 152 million to € 671 million in 2004 compared to € 519 

million in 2003. The increase was primarily due to better results on financial transactions and from the sale 

by Gilde of a number of participating interests. 

Staff costs. Staff costs increased by 13% or € 77 million to € 675 million in 2004 compared to € 598 

million in 2003. The increase in staff costs was primarily due to an increase in the number of FTEs. 

Other administrative expenses. Other administrative expenses increased by 23% to € 414 million in 

2004 compared to € 337 million in 2003. The increase was mainly due to the strong growth in international 

retail operations. 

Value adjustments. Under Dutch GAAP value adjustments can be separated into value adjustments to 

receivables and value adjustments to financial fixed assets. Value adjustments to receivables declined by 

51% or € 146 million to € 138 million in 2004 compared to € 284 million in 2003. This decrease was 

primarily due to improved global economic conditions and a release of provisions. Value adjustments to 

financial fixed assets increased by € 58 million to a profit of € 4 million in 2004 compared to a loss of € 54 

million in 2003. The improvement was primarily due to the improved global economic conditions which 

resulted in a revaluation of investments of Gilde. 

Operating profit before taxation. Gross operating profit increased by 6% to € 1,042 million in 2004 

compared to € 987 million in 2003, for the reasons outlined above. 

90


The following table sets forth certain summarised financial information for the Rabobank Group’s Asset 

Management and Investment business for the years indicated. 



Interest 61 72 87 89 



Total income 718 653 673 654 

Staff costs 278 276 285 274 



Total expenses 468 466 476 484 

Gross operating profit 250 187 197 170 

Value adjustments 0 1 1 (1) 








Income. Income increased by 10% to € 718 million in 2005 compared to € 653 million in 2004. Higher 

fees and commission were responsible for the income growth. 

Interest. Interest decreased by 15% to € 61 million compared to € 72 million in 2004. The decrease 

was mainly due to higher interest expenses on derivatives. 

Fees and commission. Fees and commission revenues were up 17% to € 600 million compared to € 

512 million in 2004. The improved investment climate in the Netherlands, especially in the second half of 

the year, generated higher management and custody fees. Placing fees were also higher, thanks to the 

successful placing of several new products. 

Other income. Other income decreased by € 12 million to € 57 million in 2005 compared to € 69 

million in 2004. Other income decreased mainly as result of a reallocation of a part of the activities to another 

Group entity within Rabobank. 

Total expenses. Total expenses were € 468 million compared to € 466 million in 2004. 

Staff costs. Staff costs were € 2 million higher at € 278 million compared to € 276 million in 2004. 

Higher pension expenses and regular salary increases were largely offset by the sale of Effectenbank Stroeve 

in mid-year, which reduced the number of FTEs by 5% to 1,798. Discounting this disposal, the number of 

FTEs showed little change in 2005. 

Other administrative expenses. Other administrative expenses were 2% higher at € 177 million 

compared to € 173 million in 2004. 

Depreciation. Depreciation declined to € 13 million compared to € 17 million in 2004. 

Taxation. Taxation in 2005 amounted to € 76 million compared to € 48 million to 2004. This increase 

was due to stronger operating profit before taxation and incidental tax income in 2004. 

91

Net profit. Net profit grew by 26% to € 174 million compared to € 138 million in 2004. The improved 

result was the product of 10% growth in income and stable total expenses. 


Income. Income increased by 3% to € 673 million in 2004 compared to € 654 million in 2003. The 

increase was due mainly to higher commissions. 

Commission. Commission increased by 15% or € 67 million to € 512 million in 2004 compared to € 

445 million for the same period of 2003. The increase was due to higher fees from asset management due 

to improved market conditions. 

Other income. Other income decreased by € 46 million to € 74 million in 2004 compared to € 120 

million in 2003. The decrease was mainly due to lower non-recurring results on co-investing and lower 

results on financial transactions. Another part of the decrease was due to a requirement imposed by the 

Dutch Authority for the Financial Markets on Robeco to return € 10 million of other income from market 

making activities earned in 2003 to investment funds. 

Staff costs. Staff costs increased by 4% to € 285 million in 2004 compared to € 274 million in 2003. 

Other administrative expenses. Other administrative expenses declined by 9% to € 173 million in 2004 

compared to € 191 million in 2003. This was due in part to implementation of Rabobank’s cost control 

policy, including lower IT costs. 

Operating profit before taxation. Operating profit before taxation increased by 15% or € 25 million to 

€ 196 million in 2004 compared to € 171 million in 2003, for the reasons outlined above. 

Leasing 


Leasing business for the years indicated. 



Interest 514 458 520 491 




Staff costs 244 218 212 176 












92


Income. Revenues were up 12% at € 719 million compared to € 641 million in 2004, mainly due to 

higher interest income. 

Interest. Despite a slight narrowing of the interest margin in 2005, net interest income recorded healthy 

growth of 12%, rising to € 514 million compared to € 458 million in 2004. 

Fees and commission. Fees and commission increased by 31% or € 11 million to € 47 million 

compared to € 36 million in 2004. This was for most part a result of a sharp decline in fees and commission 

expenses. 

Other income. Other income increased by € 11 million to € 158 million compared to € 147 million in 

2004. Other income grew in line with the growth of the business. This income includes income from early 

termination of lease contracts and income from sale of depreciated assets. 

Total expenses. Total expenses were € 29 million higher at € 392 million compared to € 363 million 

in 2004, largely as a consequence of higher staff costs. 

Staff costs. The staff costs were up 12% at € 244 million compared to € 218 million in 2004; the 

combined effect of 11% growth in the number of FTEs and regular salary increases were the main reasons 

for the increase. 

Other administrative expenses. The other administrative expenses decreased by € 1 million to € 133 

million compared to € 134 million in 2004. 

Depreciation. Depreciation was € 4 million higher at € 15 million compared to € 11 million in 2004. 

Value adjustments. Value adjustments, which are a measure of the risk-related costs, increased by € 

6 million to € 92 million compared to € 86 million in 2004, which equates to 65 (2004: 68) basis points of 

the average lease portfolio. 

Taxation. Taxation in 2005 amounted to € 57 million compared to € 38 million to 2004. This increase 

was due to stronger operating profit before taxation and incidental tax income in 2004. 

Net profit. The net profit for 2005 was € 178 million, a rise of 16% compared to € 154 million in 2004. 


Income. Income increased by 13% to € 641 million in 2004 compared to € 569 million in 2003. The 

increase was primarily due to the acquisition of Telia Finans AB and, to a lesser extent, an increase in interest 

and other income. Our real estate financing activities were sold to FGH Bank in early 2004. 

Interest. Interest increased by 6% to € 520 million in 2004 compared to € 491million in 2003. The 

increase was attributable to the acquisition of Telia Finans AB and to increased volumes. 

Other income. Other income increased by € 41 million to € 85 million in 2004 compared to € 44 million 

in 2003. This increase was mainly due to an increase in the residual value of leasing equipment. 

Staff costs. Staff costs increased by 20% to € 212 million in 2004 compared to € 176 million in 2003. 

The increase was mainly due to a higher number of FTEs related to the acquisition of Telia Finans AB. 

Other administrative expenses. This item increased by € 17 million to € 134 million 2004 compared 

to € 117 million in 2003. This was primarily attributable to the acquisition of Telia Finans AB, higher 

consultancy fees and the expansion of business activities. 

Operating profit before taxation. Operating profit before taxation increased by 12% to € 212 million in 

2004 compared to € 189 million in 2003, for the reasons outlined above. 

93

Real Estate 

The following table sets forth certain summarised financial information for the Rabobank Group’s Real 

Estate business for the years indicated. 



Interest 96 76 110 23 




Staff costs 25 20 20 4 













Income. Income rose 19% to € 150 million compared to € 126 million in 2004. 

Interest. Net interest income was € 20 million higher at € 96 million compared to € 76 million in 2004, 

reflecting the vigorous growth in the loan portfolio. The interest margin showed little change, thanks partly 

to the higher level of redemptions and related penalty interest payments by clients. 

Other income. Other income, which includes lease and rental income and project results, was 13% 

higher at € 53 million compared to € 47 million in 2004. 

Total expenses. Total expenses rose 28% to € 41 million compared to € 32 million in 2004 reflecting 

the strong growth of the real estate activities. 

Staff costs. Due to the growth in the number of FTEs and higher pension expenses, staff costs 

increased by € 5 million to € 25 million compared to € 20 million in 2004. 

Other administrative expenses. Other operating expenses were € 4 million higher at € 15 million 

compared to € 11 million in 2004, reflecting the significant organic growth achieved by the Real Estate 

division last year, and in particular the increased investment in the back office. 

Taxation. Taxation in 2005 amounted to € 30 million compared to € 30 million to 2004. 

Net profit. The real estate activities realised a net profit of € 78 million, a rise of 22% compared to € 64 

million in 2004. 

94


Real estate is a new business segment since the last quarter of 2003 of Rabobank Group and it is 

therefore not possible to make a comparison between 2004 and 2003. 

Liquidity and Capital Resources 

The Rabobank Group’s total assets were € 506 billion at December 31, 2005, a 5% increase from 

€ 484 billion at December 31, 2004. The largest proportion of the Rabobank Group’s existing lending (not 

including investments in Dutch treasury securities, other Dutch public sector bonds and securities and 

interbank deposit placements) consists of residential mortgage loans, which in the Netherlands are primarily 

fixed rate. 

Loans to customers 

Loans to customers increased by 11% or € 30.5 billion to € 304.5 billion at December 31, 2005 from 

€ 273.9 billion at December 31, 2004. Private sector lending increased by € 29.1 billion to € 278.1 billion 

at December 31, 2005, an increase of 12% from € 249.0 billion at December 31, 2004. The increase in 

private sector lending for private individuals, primarily for mortgage finance, was € 13.3 billion to € 146.5 

billion at December 31, 2005 from € 133.2 billion at December 31, 2004. The demand for mortgage finance 

was consistent with prior years and was driven by lower interest rates. Residential mortgage loans are made 

by local Rabobanks and by the Rabobank Group’s mortgage banking subsidiary, Rabohypotheekbank N.V. 

and by Obvion. These loans are secured by mortgages on underlying properties and have maturities up to 

thirty years. Lending to companies in the trade, industry and services sector increased by € 7.0 billion to € 

83.3 billion at December 31, 2005, a 9% increase compared to December 31, 2004. Lending to the food 

and agri sector increased by € 8.7 billion to € 48.2 billion at December 31, 2005, a 22% increase. 

The following table shows a breakdown of the Rabobank Group’s total lending outstanding to the 

private sector at December 31, 2005 and 2004, by category of borrower: 

At December 31, 

(in billions of euro and as % of total private sector lending) 2005 2004 

Food and agri sector 48.2 17% 39.5 16% 

Trade and industry and the services sector 83.3 30% 76.3 31% 

Private individuals 146.5 53% 133.2 53% 

Total 278.1 100% 249.0 100% 

The maturities of loans granted by the Rabobank Group vary from overdraft facilities to thirty-year 

term loans. 

The following table provides a breakdown at December 31, 2005 of the remaining maturity of the 

Rabobank Group’s total outstanding lending (public and private sector) and professional securities 

transactions: 

(in billions of euro and as % of total loans) 

At December 31, 2005 

Three months or less 47.9 16% 

From three months to one year 17.0 6% 

From one to five years 49.0 16% 

More than five years 178.4 58% 

Undated/withdrawable on demand 12.2 4% 

Total 304.5 100% 

95

Funding 

At December 31, 2005, due to customers of the Rabobank Group were € 186.5 billion, an increase 

of 5% compared to December 31, 2004. The balance held in savings accounts rose by € 7.9 billion to 

€ 86.2 billion, an increase of 10%, with Internet savings accounting for the majority of the increase. Other 

due to customers (including corporate and retail current account balances, funds outstanding to 

professional counterparties and other savings funds) increased by € 1.1 billion to € 100.3 billion at 

December 31, 2005, largely due to growth in deposits. Repurchase contracts increased € 1.5 billion from 

€ 3.9 billion to € 5.4 billion over the same time period. At December 31, 2005, non-subordinated bonds 

and other debt securities, including certificates of deposit, totalled € 135.3 billion compared to € 109.5 

billion at December 31, 2004. Savings deposits (except those withdrawable upon notice, from one month 

to 10 years) generally bear interest at rates that Rabobank Nederland can unilaterally change. At December 

31, 2005, the Rabobank Group had a market share of 39.4% of all savings deposits maintained by 

individuals with banks in the Netherlands. 

The following table shows the Rabobank Group’s sources of funding by source at December 31, 2005, 

2004 and 2003: 



Savings accounts 86,181 78,325 77,737 71,559 

Debt securities 135,325 109,460 92,578 80,695 

Other due to customers and repurchase contracts 100,278 99,157 114,386 101,012 

Total 321,784 286,942 284,701 253,266 




The Rabobank Group also funds itself in the interbank and institutional market. The Rabobank Group’s 

total liabilities to banks (other than debt securities) were € 110.0 billion at December 31, 2005, a 14% 

increase from € 96.4 billion at December 31, 2004. 

Other financial assets 

Other financial assets comprise shares, bonds, money market paper, short-term government paper 

and other forms of securities. Other financial assets are subdivided into the following categories: 

• Trading financial assets; 

• Other financial assets at fair value through profit or loss; 

• Available-for-sale financial assets; 

• Held-to-maturity assets. 

96

Other financial assets 2005 

(in millions of euro) Trading Other Available- Held-to- Total 

financial for-sale maturity 

assets 

Purchased loans 2,255 - 2,240 - 4,495 

Short term government paper 275 41 768 - 1,084 

Government bonds 10,698 1,093 24,657 1,580 38,028 

Other bonds 16,621 11,194 15,799 - 43,614 

Total bonds 27,319 12,287 40,456 1,580 81,642 

Venture Capital 4 221 - - 225 

Equity instruments 4,691 2,236 7,193 - 14,120 

Total shares 4,695 2,461 7,193 - 14,349 

Other financial assets 4,467 82 564 328 5,441 

Total 39,011 14,871 51,221 1,908 107,011 

Listed 33,099 14,130 30,177 1,908 79,314 

Unlisted 5,912 741 21,044 - 27,697 

Other financial assets 2004 

(in millions of euro) Trading Other Available- Held-to- Total 

financial for-sale maturity 

assets 

Purchased loans 2,124 - 2,619 - 4,743 

Short term government paper 1,140 - 716 - 1,856 

Government bonds 17,978 2,218 20,265 1,870 42,331 

Other bonds 2,557 26,630 17,605 337 47,129 

Total bonds 20,535 28,848 37,870 2,207 89,460 

Venture Capital 5 - - - 5 

Equity instruments 7,499 3,443 5,473 - 16,415 

Total shares 7,504 3,443 5,473 - 16,420 

Other financial assets 1,343 207 1,642 - 3,192 

Total 32,646 32,498 48,320 2,207 115,671 

Listed 28,296 32,367 31,682 2,207 94,552 

Unlisted 4,350 131 16,638 - 21,119 

97

Contractual Obligations and Contingent Liabilities 

The table below provides certain information concerning the payments coming due under our existing 

contractual obligations at December 31, 2005. 

Payments Due by Period 

(in millions of euro) On demand/ > 1 year 

undated < 1 year < 5 years > 5 years Total 

Debt securities 4,115 64,656 38,797 27,757 135,325 

Subordinated debt 34 - 64 2,547 2,645 

Due to customers 144,139 34,395 4,131 3,794 186,459 

Other long-term obligations consist of due to customers other than debt securities (liabilities for 

deposits and savings, professional securities transactions and other client accounts). For further 

information, see note 22 to the consolidated financial statements for the year 2005. 

Contingent liabilities relate primarily to transactions in which the Rabobank Group stands surety for 

commitments of third parties. 


2005 2004 

Contingent liabilities consist of: 

Guarantees, etc. 7,021 6,550 

Irrevocable letters of credit 1,223 1,199 

Other contingent liabilities 18 43 

Total contingent liabilities 8,262 7,792 

Contingent liabilities secured by assets was € 243 million at December 31, 2005 compared to € 212 

million at December 31, 2004. 

Guarantees relate both to credit and non-credit substitute guarantees. Credit-substitute guarantees 

are guarantees given by Rabobank Group entities in respect of credit granted to customers by a third party. 

Many of them are expected to expire without being drawn on and therefore do not necessarily represent 

future cash outflows. 

Irrevocable letters of credit mainly secure payments to a third party for a customers foreign and 

domestic trade transactions in order to finance a shipment of goods. The Rabobank Group’s credit risk in 

these transactions is limited since these transactions are collateralised by the commodity shipped and are 

of a short duration. Other contingent liabilities mainly relate to acceptances of bills and are of a short-term 

nature. As described below, facilities mainly constitute unused portions of irrevocable credit facilities granted 

to corporate clients. Many of these facilities are for a fixed duration and bear interest at a floating rate. Most 

of the unused portion of irrevocable credit facilities is secured by customers’ assets or counter-guarantees 

by the central government and exempted bodies under the regulatory requirements. Irrevocable facilities 

also include commitments made to purchase securities to be issued by governments and private issuers. 

Irrevocable facilities relate to all irrevocable facilities that could lead to lending. 

98


(in millions of euro) 2005 2004 

Unused credit facilities 31,662 29,726 

Other 620 388 

Total irrevocable facilities 32,281 30,114 

Revocable credit facilities 28,354 24,961 

Total credit related and contingent liabilities 60,636 55,075 

Capital Adequacy 

Capital adequacy and the use of capital are monitored by the Rabobank Group and its subsidiaries, 

employing techniques based on the guidelines developed by the Basel Committee on Banking Regulations 

and Supervisory Practices (the ‘Basel Committee’) and implemented by the EU and the Dutch Central Bank 

for supervisory purposes. 

The Dutch Central Bank, in conjunction with other bank supervisors, regards the risk asset ratio 

developed by the Basel Committee as a key supervisory tool and sets individual ratio requirements for banks 

in the Netherlands. This ratio was designed to meet the dual objectives of strengthening the soundness and 

stability of the international banking system and of creating a fair and consistent supervisory framework for 

international banks by means of an international convergence of capital measurement and capital 

standards. The technique involves the application of risk weightings to assets (which for this purpose 

includes both balance sheet assets and off-balance sheet items) to reflect the credit and other risks 

associated with broad categories of transactions and counterparties. 

The Basel Committee guidelines set a minimum total risk asset ratio for all international banks of 8%. 

Bank capital adequacy requirements have also been established pursuant to EU directives. These directives, 

as implemented in the Netherlands, set forth capital standards similar to those of the Basel Committee 

guidelines. 

In addition, the EU Capital Adequacy Directive (the ‘CAD’) became effective January 1, 1996. This 

directive establishes minimum capital requirements for banks and investment firms for market risks. The 

CAD is based on a proposal by the Basel Committee. 

The risk asset approach to capital adequacy emphasises the importance of Tier I (core) capital, 

comprising primarily Group equity, including the Fund for general banking risks. In determining a bank’s risk 

asset ratio, the rules limit qualifying Tier II supplementary capital to an amount equal to Tier I capital. Tier II 

capital includes subordinated debt and fixed asset revaluation reserves. 

The concept of risk weighting assumes that banking activities generally involve some risk of loss. For 

risk weighting purposes, commercial lendings are taken as a bench-mark to which a risk weighting of 100% 

is ascribed. Other transactions, which are considered to present lower levels of risk than commercial 

lending, may qualify for reduced weightings. Off-balance sheet items are generally converted to credit risk 

equivalents by applying credit conversion factors laid down by the Basel Committee. The resulting amounts 

are then risk-weighted according to the nature of the counterparty. As a result, credit substitutes, such as 

standby letters of credit and acceptances, are allocated the same risk weightings as similar on balance sheet 

lending, while transaction-related off-balance sheet items, such as performance bonds, are allocated a 

lower weighting in recognition of the smaller likelihood of loss from these instruments. 

In the case of interest and exchange rate related contracts, the risks involved relate to the potential 

loss of cash flows rather than notional principal amounts. These risks are represented by the replacement 

cost (as defined by the Dutch Central Bank) of the contracts plus an add-on to reflect potential future 

volatility in replacement cost arising from movements in market rates. 

The Tier I ratio and the BIS ratio are the most common ratios used in the financial world to measure 

solvency. The Tier I ratio expresses the relationship between core capital and total risk-adjusted assets. At 

December 31, 2005, Rabobank Group’s Tier I ratio stood at 11.6 (10.9 at December 31, 2004). This is higher 

than the long-term target of 10. The minimum requirement set by the external supervisors is 4. The high 

solvency ratio is one of the reasons for the Rabobank Group’s long-term corporate triple A rating by both 

Moody’s and Standard & Poor’s. 

99

Total risk-adjusted items increased by € 17.8 billion to € 213.9 billion at December 31, 2005. This 

increase was largely due to the increase in lending. Tier I capital increased by € 3.5 billion to € 24.9 billion 

at December 31, 2005. 

The BIS ratio is calculated by dividing the total of Tier I and Tier II capital by the total of risk-adjusted 

assets times one hundred. At December 31, 2005, the BIS ratio came to 11.8 (10.8 at December 31, 2004). 

This comfortably exceeds the minimum requirement set by the external supervisors of 8.0. 

The following table sets forth the risk-weighted capital ratios of the Rabobank Group as of December 

31, 2005 and 2004, in each case calculated under the Netherlands’ implementation of the relevant EU 

directives. 

Development in capital and solvency ratios 


(in millions of euro, except ratios) 2005 2004 

Tier I capital 24,860 21,404 

Tier I ratio 11.6 10.9 

Qualifying capital 25,272 21,205 

BIS ratio 11.8 10.8 

Selected Statistical Information 

The following section discusses selected statistical information regarding the Rabobank Group’s 

operations. Unless otherwise indicated, average balances are calculated based on monthly balances and 

geographic data are based on the domicile of the customer. See ‘–Results of Operations’ for an analysis of 

fluctuations in the Rabobank Group’s results between periods. 

Return on Equity and Assets 1 

The following table presents information relating to the Rabobank Group’s return on equity and assets 

for each of the past three years. The first two columns corresponding to the years 2005 and 2004 are based 

on IFRS. The other columns corresponding to the years 2004 and 2003 are based on Dutch GAAP. Hence 

the figures of 2005 and 2003 are not comparable. 

2005 2004 2004 2003 

Return on Assets 2 0.40% 0.39% 0.35% 0.34% 

Return on Equity 3 8.44% 8.19% 8.97% 8.72% 

Equity to Assets Ratio 4 4.73 4.75 3.76 3.95 

(1) As of January 1, 2004 the figures have been restated in connection with the change in accounting policy concerning the recognition of Trust Preferred 

Securities I and II. 

(2) Net profit as a percentage of total average assets, based on month-end balances. 

(3) Net profit as a percentage of average equity, based on quarterly-end balances. 

(4) Average equity divided by average total assets, based on quarterly-end balances. 

The following table presents information relating to dividends paid on Rabobank Member Certificates 

for each of the past three years. The valuation of the Member Certificates is the same for IFRS and Dutch 

GAAP. 

(in millions of euro, except percentages) 2005 2004 2003 

Outstanding Member Certificates 1 4,311 3,854 3,854 

Payments 211 217 215 

Average dividend yield 4.89% 5.23% 5.19% 

(1) Average Outstanding Member Certificates based on month-end balances. 

100

Loan Portfolio 

Our loan portfolio consists of loans, overdrafts, assets subject to operating leases, finance lease 

receivables to governments, corporations and consumers and reverse repurchase agreements. The 

following table analyses our loan portfolio by sector at December 31, 2005, 2004 and 2003. The first two 

columns corresponding to the years 2005 and 2004 are based on IFRS. The other columns corresponding 

to the years 2004 and 2003 are based on Dutch GAAP. Hence the figures of 2005 and 2003 are not 

comparable. 



Public sector 1,053 1,616 2,201 2,161 

Private sector (corporate lending) 133,758 117,681 123,045 119,457 

Private sector (personal lending) 146,694 133,293 131,951 117,816 

Total loans (gross) excluding securities transactions 281,505 252,590 257,197 239,434 

Securities transactions 23,484 21,134 20,973 13,211 

Hedge accounting 1,819 2,238 — — 

Total loans (gross) including securities transactions 306,808 275,963 278,170 252,645 

Total loans (net) 1 304,451 273,946 276,170 250,797 

(1) The difference between total loans (gross) and total loans (net) represents provisions for loan losses. 

The table below sets forth a geographic breakdown of the Rabobank Group’s loan portfolio at 

December 31, 2005, 2004 and 2003. The first two columns corresponding to the years 2005 and 2004 are 

based on IFRS. The other columns corresponding to the years 2004 and 2003 are based on Dutch GAAP. 

Hence the figures of 2005 and 2003 are not comparable. 



Public Sector: 

The Netherlands 505 787 1,372 1,590 

Other countries in the Euro zone 1 266 279 279 135 

North America 120 439 439 127 

Latin America 43 20 20 7 

Asia 98 70 70 191 

Australia andNew Zealand — — — — 

Other countries 21 21 21 111 

Total Public Sector 1,053 1,616 2,201 2,161 

Private Sector: 

The Netherlands 218,363 200,278 203,666 188,469 

Other countries in the Euro zone 1 24,681 21,358 21,013 17,446 

North America 18,391 13,892 14,077 15,699 

Latin America 3,620 2,836 2,874 2,478 

Asia 2,764 2,196 2,225 3,054 

Australia and New Zealand 10,219 8,329 8,441 7,722 

Other countries 57 69 700 557 

Total Private Sector 2 278,095 248,958 252,996 235,425 

(1) Excluding the Netherlands. 

(2) After provisions for loan losses. 

101

Maturities and Interest Rate Sensitivity of Loan Portfolio 

Domestic Retail - Interest Rate Risk position, as at December 31, 2005 

(in millions of euro) On demand 1 - 3 4 - 6 7 - 9 10 - 12 1 - 2 2 - 5 5 - 10 > 10 Non-rate Total 

months months months months years years years years sensitive 

On balance sheet 

Assets 16,786 34,763 10,935 7,957 6,671 18,374 58,578 40,151 8,172 8,047 210,434 

Liabilities 9,562 96,270 13,916 3,876 3,566 9,989 30,520 547 2,744 39,233 210,224 

Gap 7,224 (61,508) (2,982) 4,081 3,106 8,385 28,058 39,603 5,428 (31,186) 211 

Off balance sheet 

Assets - 44,635 15,662 193 103 644 2,645 4,119 673 - 68,674 

Liabilities - 11,738 5,751 1,499 1,246 6,074 18,966 21,761 1,850 - 68,885 

Gap after OBS 7,224 (28,610) 6,930 2,774 1,963 2,955 11,736 21,961 4,251 (31,186) 0 

The three key indicators, used for managing the interest rate risk are the basis point value, the equity 

at risk and the income at risk. 

The basis point value (‘BPV’) is the absolute loss of market value of equity after a parallel increase of 

the yield curve with one basis point. In 2005 the BPV did not exceed € 20 million. 

Long-term interest rate risk is measured and managed using the equity at risk concept. Equity at risk 

is the sensitivity of the Group equity’s market value to interest rate fluctuations. In 2005, the equity at risk 

never exceeded 7.5%. 

Short-term interest rate risk is monitored using the income at risk concept. This is the maximum 

amount of interest income that is put at risk on an annual basis, based on a confidence level of 97.5%. In 

2005, the maximum income at risk did not exceed € 250 million. All three key indicators are calculated and 

reported to the BRMC monthly. Limits are set annually. 

Risk Elements 

Cross-Border Outstandings 

Cross-border outstandings are defined as loans (including accrued interest), acceptances, interestearning 

deposits with other banks, other interest-earning investments and any other monetary assets which 

are denominated in a currency other than the functional currency of the office or subsidiary where the 

extension of credit is booked. To the extent that the material local currency outstandings are not hedged or 

are not funded by local currency borrowings, such amounts are included in cross-border outstandings. 

At December 31, 2005, there were no cross-border outstandings exceeding 1% of total assets in any 

country where current conditions give rise to liquidity problems which are expected to have a material impact 

on the timely repayment of interest or principal. 

The following table analyses cross-border outstandings as of the end of each of the last three years, 

stating the name of the country and the aggregate amount of cross-border outstandings in each foreign 

country where such outstandings exceeded 1% of total assets, by type of borrower. 

102

Banks Public Private Total 

(in millions of euro) Authorities Sector Amount 

At December 31, 2005 IFRS 

France 6,781 1,281 5,902 13,964 

Germany 8,249 4,720 3,994 16,963 

Italy 1,496 3,509 1,327 6,332 

Ireland 3,903 394 10,743 15,040 

United Kingdom 23,797 1,539 16,358 41,694 

United States 13,429 7,368 65,655 86,452 

Spain 2,331 1,898 1,670 5,899 

Japan 5,037 10,309 151 15,497 

Australia 824 1,076 7,931 9,831 

At December 31, 2004 IFRS / Dutch GAAP 

France 5,457 2,832 4,800 13,089 

Germany 10,519 5,984 1,450 17,953 

Italy 1,000 6,813 603 8,416 

Ireland 2,164 388 8,118 10,670 

United Kingdom 13,295 2,415 13,435 29,145 

United States 4,667 4,304 33,861 42,832 

Spain 1,569 2,977 1,281 5,827 

Japan 9,114 8,845 2,573 20,532 

Australia 1,019 64 6,616 7,699 

At December 31, 2003 Dutch GAAP 

France 3,335 1,927 1,137 6,399 

Germany 4,413 5,298 757 10,468 

Italy 1,901 4,763 133 6,797 

Luxembourg 3,584 — 1,031 4,615 

United Kingdom 13,213 — 9,111 22,324 

United States 5,016 365 15,455 20,836 

Spain 1,505 2,273 462 4,240 

Loan portfolio 

One of the principal factors influencing the quality of the earnings and the loan portfolio is diversification 

of loans e.g. by industry or by region. In 2005 NAICS (North America Industry Classification System) has 

been introduced as the leading system to classify industries for Rabobank Group. The NAICS system 

distinguishes a large number of sectors, subsectors and industries. 

103

The following table is based on data according to the NAICS system and represents the loan portfolio 

of Rabobank Group loans by main sector at December 31, 2005. 

At December 31, 2005 

(in millions of euro) Balance Off-balance Total 

Sheet Sheet Amount 

Amount Amount Outstanding 

Outstanding Outstanding 

Food and Agri: 

Oilseed & grain 4,351 763 5,114 

Fruit & vegetables 5,645 103 5,749 

Sugar 980 41 1,021 

Animal protein 7,932 169 8,101 

Dairy 9,169 161 9,330 

Farm inputs 2,456 128 2,584 

Beverages 1,280 55 1,334 

Food retail & food services 3,660 270 3,930 

Other food & agri 12,770 362 13,131 

Total Food & Agri 48,243 2,052 50,295 

Trade, Manufacturing & Services: 

Utilities 1,045 461 1,506 

Construction 4,620 422 5,042 

Manufacturing: textile, apparel & leather 222 20 242 

Manufacturing: wood products 327 5 332 

Manufacturing: paper & printing activities 671 73 744 

Manufacturing: chemical products 1,085 41 1,126 

Manufacturing: metal & machinery 2,365 118 2,483 

Manufacturing: miscellaneous 2,079 295 2,374 

Wholesale 4,453 729 5,182 

Retail (except food & beverages) 3,634 130 3,763 

Transportation & warehousing 3,877 918 4,795 

Information & communication 1,848 343 2,191 

Finance & insurance 10,787 924 11,711 

Real estate, rental & leasing 15,474 189 15,663 

Professional, scientific & technical services 1,640 94 1,734 

Healthcare & social assistance 2,748 43 2,791 

Arts, entertainment & recreation 1,219 29 1,284 

Other services 25,246 662 25,908 

Total trade, manufacturing & services 83,340 5,496 88,837 

Private individuals 146,512 192 146,704 

Total private sector loans 278,095 7,740 285,836 

Apart from advances to other banks (€ 53 billion at December 31, 2005 which is 10% of balance sheet 

total) Rabobank Group’s portfolio only contains a considerable concentration of loans to private individuals. 

The total on-balance outstandings to private individuals is 53% of the total of on-balance private sector 

loans. Loans of Rabobank Group’s portfolio are well spread across numerous sub industry sectors. None 

of these is larger than 10% of total of private sector loans. Furthermore Rabobank Group’s portfolio is well 

spread across industries in many different countries and is therefore well diversified. 

104

Impaired Loans 

A loan is impaired if it is probable that payments of principal and interest will not be made in time and 

in accordance with the original contractual terms of the loan. There is also a matter of impairment if the 

obligor is past due more than 90 days or if the obligor has filed for bankruptcy or similar protection from 

creditors. In these cases the loan will be written down to the discounted realisable value of the available 

collateral and an adequate allowance will be made. 

The table below provides an analysis of the Rabobank Group’s impaired loans by business at 

December 31, 2005, 2004 and 2003. 


IFRS IFRS 1 Dutch GAAP 


Domestic Retail Banking: 

Local Rabobanks 2,595 2,408 2,092 1,749 

Rabohypotheekbank 89 99 99 68 

Other 22 20 20 - 

Total Domestic Retail Banking 2,706 2,527 2,211 1,817 

Wholesale and International Retail Banking: 

The Netherlands 640 628 670 850 

Rest of world 1,203 791 818 1,265 

Total Wholesale and International Retail Banking 1,843 1,419 1,488 2,115 

Asset Management 5 6 6 5 

Leasing 242 364 364 380 

Other 18 10 10 15 

Total Rabobank Group impaired loans 4,814 4,326 4,079 4,332 

(1) The figures of the impaired loans of 2004 based on IFRS are an accountable estimate. 

105

Summary of Loan Loss Experience 

The following table shows the movements in the allocation of the allowance for loan losses on loans 

accounted for as loans to banks and customers for the past three years. The first two columns 

corresponding to the years 2005 and 2004 are based on IFRS. The other columns corresponding to the 

years 2004 and 2003 are based on Dutch GAAP. Hence the figures of 2005 and 2003 are not comparable. 

IFRS 

Dutch GAAP 


Balance at January 1: 

Domestic Retail Banking 1,122 974 1,079 1,021 

Wholesale and International Retail Banking 782 853 751 683 

Asset Management and Investment 3 4 4 1 

Leasing 146 139 73 79 

Real Estate 32 25 25 - 

Other 18 6 2 1 

Total balance at January 1 2,103 2,001 1,934 1,785 

Addition 1 : 

Domestic Retail Banking 188 261 299 214 



Leasing 103 95 71 75 

Real Estate 1 - - - 

Other (13) 14 16 1 

Total additions 563 514 525 575 

Amount charged to the provisions: 

Domestic Retail Banking (146) (163) (179) (171) 

Wholesale and International Retail Banking (139) (149) (152) (184) 

Asset Management and Investment - (2) (3) — 

Leasing (78) (86) (86) (80) 

Real Estate (1) - - (7) 

Other - (2) - - 

Total amount charged to the provisions (364) (402) (420) (442) 

Other: 

Domestic Retail Banking 40 50 14 15 

Wholesale and International Retail Banking 51 (65) 10 (32) 

Asset Management and Investment - - 1 2 

Leasing 22 (2) 10 (1) 

Real Estate (2) 7 7 32 

Other 25 - 4 - 

Total other 136 (10) 46 16 

Balance at December 31: 

Domestic Retail Banking 1,204 1,122 1,213 1,079 



Leasing 193 146 68 73 

Real Estate 30 32 32 25 

Other 30 18 22 2 

Total balance at December 31 2,438 2,103 2,085 1,934 

(1) In the table the amount of EUR 575 million in 2003 represents bad debt expenses. In the year 2005 bad debt expenses amounted EUR 523 million 

after the receipt of EUR 40 million recoveries. In the year 2004 bad debts amounted to EUR 450 million after the receipt of EUR 64 million of recoveries. 

106

Deposits 

The following table presents the year-end amounts, of each deposit category for the years ended 

December 31, 2005, 2004 and 2003. Interest rates paid on customer deposits by banks and individuals 

reflect market conditions. Since mid 2001, current accounts no longer earn interest. The first two columns 

corresponding to the years 2005 and 2004 are based on IFRS. The other columns corresponding to the 

years 2004 and 2003 are based on Dutch GAAP. Hence the figures for 2005 and 2003 are not comparable. 



Deposits by businesses: 

Time deposits (non-banks) 36,162 35,377 50,982 39,086 

Current accounts 37,343 32,867 33,212 33,652 

Professional securities transactions (repo’s securities) 5,392 3,907 4,119 3,309 

Other 9,833 13,317 13,287 12,359 

Total deposits by businesses 88,730 85,468 101,600 88,406 

Deposits by individuals: 

Savings accounts 86,181 78,325 77,737 71,559 

Current accounts 10,897 10,509 10,556 10,657 

Other 651 3,180 2,230 1,949 

Total deposits by individuals 97,729 92,014 90,523 84,165 

Total deposits by businesses and individuals 186,459 177,482 192,123 172,571 

Short-term Borrowings 

Short-term borrowings are borrowings with an original maturity of one year or less. These are included 

in the Rabobank Group’s consolidated balance sheet under the items ‘Debt securities’. An analysis of the 

balance of short-term borrowings for December 31, 2005, 2004 and 2003 is provided below. The first two 

columns corresponding to the years 2005 and 2004 are based on IFRS. The other columns corresponding 

to the years 2004 and 2003 are based on Dutch GAAP. Hence the figures of 2005 and 2003 are not 

comparable. 



Year-end balance 60,073 54,223 38,084 34,547 

Average balance 61,633 54,404 39,643 31,642 

Maximum month-end balance 68,709 57,554 42,901 37,406 

107

SELECTED FINANCIAL INFORMATION 

The following selected financial data are derived from the audited consolidated financial statements of 

the Rabobank Group which have been audited by Ernst & Young Accountants, independent auditors. The 

data should be read in conjunction with the consolidated financial statements, related notes and the 

‘Management’s Discussion and Analysis of Financial Condition and Results of Operations’ included in this 

offering memorandum. The Rabobank audited consolidated financial statements for the year ended 

December 31, 2005 have been prepared in accordance with IFRS and the comparative figures of 2004 have 

been restated accordingly. IFRS differs in certain significant respects from U.S. GAAP. See ‘Summary of 

Principal Differences between IFRS and U.S. GAAP’ for a description of the principal differences between 

IFRS and U.S. GAAP as they relate to Rabobank. The financial statements for the year ended December 

31, 2004 are also prepared in accordance with Dutch GAAP which enables a comparison possible with the 

2003 financial statements. Dutch GAAP also differ in certain significant respects from U.S. GAAP, see 

‘Summary of Principal Differences between Dutch GAAP and U.S. GAAP’ for a description of the principal 

differences between Dutch GAAP and U.S. GAAP as they relate to Rabobank. 

Rabobank Group Consolidated Balance Sheet based on IFRS 

As at December 31, 

In EUR million 2005 2004 

ASSETS 

Cash and cash equivalents 2,923 7,269 

Due from other banks 53,065 41,050 

Trading financial assets 39,011 32,646 

Other financial assets at fair value through profit and loss 14,871 32,498 

Derivative financial instruments 24,135 32,035 

Loans to customers 304,451 273,946 

Available-for-sale financial assets 51,221 48,320 

Held-to-maturity financial assets 1,908 2,207 

Investments in associates 2,971 714 

Goodwill and other intangible assets 252 204 

Property and equipment 3,115 3,313 

Investment properties 768 1,178 

Deferred tax assets 1,236 1,076 

Other assets 6,307 7,118 

Total assets 506,234 483,574 

108

As at December 31, 


LIABILITIES 

Due to other banks 109,749 96,347 

Due to other bank at fair value through profit and loss 239 97 

Due to customers 186,427 177,471 

Due to customers at fair value through profit and loss 32 11 

Debt securities in issue 115,992 97,520 

Debt securities in issue at fair value through profit and loss 19,333 11,940 

Derivative financial instruments and other trading liabilities 28,081 39,171 

Other debts 7,346 7,650 

Insurance liabilities 3 17,882 

Other financial liabilities at fair value through profit and loss 7,341 7,090 

Provisions 931 1,081 

Deferred tax liabilities 329 223 

Employee benefits 1,437 1,958 

Subordinated debt 2,645 2,129 

Total liabilities 479,885 460,570 

EQUITY 

Equity of Rabobank Nederland and local Rabobanks 15,450 14,018 

Rabobank Membership Certificates issued by group companies 5,811 3,840 

21,261 17,858 

Trust Preferred Securities III-VI issued by group companies 2,092 1,877 

Minority interests 2,996 3,269 

Total equity 26,349 23,004 

Total equity and liabilities 506,234 483,574 

109

Rabobank Group Consolidated Balance Sheet based on Dutch GAAP: 

At December 31 1 

(in millions of euro, unless otherwise specified) 2004 2003 2002 2001 

ASSETS 

Cash 7,204 7,117 3,807 3,736 

Short-term government paper 4,132 3,211 1,813 5,311 

Banks 40,588 41,919 47,229 40,078 

Lending 276,170 250,797 225,252 208,614 

Interest-bearing securities 91,889 71,141 71,320 78,680 

Shares 15,168 10,093 9,414 12,556 

Participating interests 510 201 184 156 

Property and equipment 3,927 3,964 3,870 3,756 

Other assets 5,468 4,984 4,519 4,425 

Prepayments and accrued income 30,033 9,878 7,312 6,367 

Total assets 475,089 403,305 374,720 363,679 

LIABILITIES 

Banks 96,266 82,856 85,886 80,014 

Funds entrusted 192,123 172,571 171,632 172,174 

Debt securities 92,578 80,695 61,739 58,514 

Other liabilities 12,447 11,907 7,699 12,039 

Accruals and deferred income 34,314 12,513 8,218 4,187 

Provisions 20,752 19,177 18,338 18,336 

Group equity 2 26,609 23,586 21,208 18,415 

Total liabilities 475,089 403,305 374,720 363,679 

Contingent liabilities 7,612 6,435 7,655 9,652 

Irrevocable facilities 30,114 26,117 27,151 25,674 

(1) In order to facilitate comparisons, certain figures at Balance Sheet date prior to December 31, 2004 have been restated for changes in line item 

definitions and accounting policies. As a result, such figures may not correspond to figures for the same Balance Sheet date previously published by 

the Rabobank Group. The restated figures have not been audited. 

(2) Includes fund for general banking risks, subordinated loans, reserves and third-party interests. 

110

Rabobank Group Consolidated Profit and Loss Account based on IFRS 



Interest income 22,101 18,580 

Interest expense 15,694 12,385 

Interest 6,407 6,195 

Fee and commission income 2,639 2,294 

Fee and commission expense 422 422 

Fees and commission 2,217 1,872 

Income from associates 226 99 

Trading income 373 333 

Net income from non-trading financial assets and liabilities at fair value through 

profit and loss 20 (90) 

Gains on available-for-sale financial assets 38 27 

Income from Interpolis insurance business 353 214 

Other (271) 572 

Income 9,363 9,222 

Staff costs 3,880 3,683 

Other administrative expenses 1,953 2,173 

Depreciation and amortisation 331 321 

Operating expenses 6,164 6,177 

Value adjustments 517 479 

Operating profit before taxation 2,682 2,566 


Net profit for the year 2,083 1,793 

Of which attributable to Rabobank Nederland and local Rabobanks 1,577 1,392 

Of which attributable to holders of Rabobank Member Certificates 211 217 

Of which attributable to Trust Preferred Securities III to VI 111 20 

Of which attributable to minority interests 184 164 

Net profit for the year 2,083 1,793 

111

Rabobank Group Consolidated Profit and Loss Account based on Dutch GAAP: 1 

(in millions of euro, unless otherwise specified) 2004 2003 2002 2001 

Income 

Interest 6,249 5,956 5,345 5,036 

Income from securities and participating interests 482 353 529 517 

Commission 2,112 1,852 1,795 1,760 

Results on financial transactions 312 170 285 422 



Expenses 

Staff costs and other administrative expenses 6,364 5,871 5,471 5,597 


Operating expenses 6,732 6,243 5,839 5,965 

Value adjustments to receivables 525 575 500 480 

Value adjustments to financial fixed assets (11) (148) 252 59 

Addition to fund for general banking risks — — — — 



Taxation on operating profit 957 712 496 514 

Operating profit/Group profit after taxation 1,852 1,636 1,431 1,370 

Third-party interests 316 266 209 192 

Net profit 1,536 1,370 1,222 1,178 

(1) The figures prior to 2004 have been restated in connection with the change in accounting policy concerning the recognition of Trust Preferred 

Securities I and II and the investment results on insurance activities. The restated figures are unaudited. 

Additional Financial Data and Selected Ratios: 


columns corresponding to the years 2004 and previous years are based on Dutch GAAP. Hence the figures 

of 2005 and 2003, 2002 and 2001 are not comparable. 

2005 2004 2004 2003 2002 2001 

BIS ratio 1, 2 11.8 10.8 11.4 10.9 10.5 10.2 

Tier I ratio 2 11.6 10.9 11.4 10.8 10.3 9.9 

Ratio of value adjustments to 

receivables to loans and 

advances to banks and 

customers 0.21 0.24 0.23 0.24 

Ratio of bad debt expenses/ 

private sector lending 20 18 

(1) The required capital of the banking operations in accordance with the BIS requirements amounts to 8% of all risk-weighted assets, off-balance sheet 

items and market risk associated with trading portfolios. 

(2) The BIS Ratio and the Tier I ratio for 2001 have been calculated taking into account the effect on equity of the changed accounting policy for pensions 


112

RISK MANAGEMENT 

The Rabobank Group places a high priority on the management of risk and has extensive procedures 

in place for systematic risk management. Within the Rabobank Group, our risk management policies relating 

to interest rate risk, market risk and liquidity risk are developed and monitored by the Balance Sheet and 

Risk Management Committee (the ‘BRMC’) in cooperation with the Group Risk Management department. 

The BRMC is responsible for balance sheet management, establishing risk policy, setting risk measurement 

standards, broadly determining limits and monitoring developments, and advising the Executive Board on 

all relevant issues regarding risk management. Our risk management policies relating to credit risk are 

developed by the Central Credit Risk Committee Rabobank Group in cooperation with the Group Risk 

Management and the Credit Risk Management department. These two committees report to the Executive 

Board, which is ultimately responsible for risk management within the Rabobank Group. 

The principal risks we face are market risk, interest rate risk, credit risk, country risk liquidity risk, and 

operational risk. Rabobank is in the process of implementing the economic capital framework within the 

Rabobank Group as a measure of how much capital we should hold on the basis of our risk profile and 

desired credit rating. Economic capital represents the amount of capital needed to cover for all risks 

associated with a certain activity. The economic capital framework makes it possible to compare different 

risk categories with each other because all risks are translated to the same numerator. See also ‘Risk 

Factors’. 

Risk Adjusted Return on Capital (RAROC) 

Relating the profit achieved on a certain activity to the capital required for that activity produces the 

RAROC, the risk adjusted return on capital. RAROC is calculated by dividing economic return by economic 

capital. The calculation and review of RAROC across our business activities and entities assists the 

Rabobank Group in striking a balance between risk, returns and capital for both the Rabobank Group and 

its constituent parts. This approach encourages the each individual group entity to ensure appropriate 

compensation for the risks it runs. RAROC is therefore an essential instrument for positioning products in 

the market at the right price. 

The use of the RAROC model to classify the Rabobank Group’s activities also plays a significant part 

in the allocation of capital to the various group entities and the different risk categories. If the calculated 

RAROC lags behind the formulated minimum result to be achieved, which is a reflection of the costs of the 

capital employed, economic value is wasted. A higher RAROC implies the creation of economic value. 

Market Risk 

Market risk relates to the change in value of the Rabobank Group’s trading portfolio as a consequence 

of changes in market prices, such as interest rates, foreign exchange rates, credit spreads, commodity 

prices and equity share prices. The BRMC is responsible for developing and supervising market risk policies 

and monitors the Rabobank Group’s worldwide market risk profile. On a daily basis, the Market Risk 

department measures and reports the market risk positions. Market risk is calculated based on internallydeveloped 

risk models and systems, which are approved and accepted by the Dutch Central Bank. The 

Rabobank Group’s risk models are based on the ‘value-at-risk’ concept. Value-at-risk describes the 

maximum possible loss that the Rabobank Group can suffer in a single day, based on historical market price 

changes and a given certain confidence interval. Value-at-risk within the Rabobank Group is based on actual 

historical market circumstances. To measure the potential impact of strong adverse market price 

movements, stress tests are applied. These ‘event risk scenarios’ measure the effect of sharp and sudden 

changes in market prices. Statistical models are also used to generate other risk measures which assist the 

Market Risk department, as well as the BRMC in evaluating our market positions. 

During the year 2005, our daily trading value-at-risk fluctuated between € 14 (during 2004 this was 

€ 11) million and € 25 (22) million, with an average of € 19 (17) million. 

On the basis of the value-at-risk analysis, Rabobank Nederland determines its use of capital for market 

risk positions throughout the Rabobank Group in compliance with the regulations of the Dutch Central Bank. 

Interest Rate Risk 

The Rabobank Group is exposed to structural interest rate risk in its balance sheet. Interest rate risk 

can result from, amongst other things, mismatches in assets and liabilities; for example, mismatches 

between the periods for which interest rates are fixed on loans and funds entrusted. The Rabobank Group 

113

manages interest rate risk through the BRMC using both the accrual based ‘income-at-risk’ concept and 

the value based ‘equity-at-risk’ concept. Based on the income-at-risk and equity-at-risk analyses, the 

Executive Board forms an opinion with regard to the acceptability of losses related to projected interest rate 

scenarios, and decides upon limits with regard to Rabobank Nederland’s interest rate risk profile. 

The Rabobank Group’s short-term interest rate risk is measured and controlled based on a concept 

of ‘income-at-risk’. This is the maximum amount of interest at risk for the coming 12 months, given a certain 

confidence level, due to severe changes in short-and long-term interest rates. During 2005, the maximum 

income-at-risk for the Rabobank Group did not exceed € 250 million. The Rabobank Group’s long-term 

interest rate risk is measured and controlled based on a concept of ‘equity-at-risk’, or the sensitivity of the 

Rabobank Group’s market value of equity to changes in interest rates. Based on analysing certain scenarios, 

the consequences of changes in interest rates over a longer period of time are calculated and evaluated. 

During 2005, the maximum equity-at-risk for the Rabobank Group did not exceed 7.5%. 

Credit Risk 

The Rabobank Group aims to offer continuity in its services. It therefore pursues a prudent policy. Once 

granted, loans are carefully managed so there is a continuous monitoring of credit risk. Of the Rabobank 

Group’s credit portfolio to the private sector, 53% in 2005 consisted of loans to private individuals which 

tend to have a very low risk profile in relative terms. The remaining 47% is a highly diversified portfolio of 

loans to business clients in the Netherlands and internationally. 

With respect to the management of the Rabobank Group’s exposure to credit risk, Rabobank 

Nederland’s Credit Risk Management department and Group Risk Management department play a key role. 

Applications for a loan or renewal of existing loans beyond certain limits are subject to a thorough credit 

analysis by credit officers of this department. Further, it monitors the Rabobank Group’s credit portfolio and 

develops new methods for quantifying credit risks. 

Risk profiling is also undertaken at the portfolio level using internal risk classifications for portfolio 

modelling. Internal credit ratings are assigned to borrowers by allocating all outstanding loans into various 

risk categories on a regular basis. The table below shows the impaired loans (i.e., the amount of loans for 

which a provision has been made) per business unit as a percentage of private sector loans. 

Impaired loans/private sector lending per business unit 

IFRS IFRS 1 Dutch GAAP 

2005 2004 2004 2003 

Domestic Retail 1.35% 1.37% 1.20% 1.08% 

Wholesale and Int. Retail 3.40% 3.03% 3.18% 4.47% 

Leasing 1.75% 2.98% 2.99% 3.29% 

Total 1.73% 1.71% 1.60% 1.82% 

(1) The figures of the impaired loans of 2004 based on IFRS are an accountable estimate. 

Bad and Doubtful Debt 

The Rabobank Group’s credit portfolio is routinely monitored for doubtful and bad debt, which results 

in review of the credit quality and consequently, if needed, adjustment of the credit rating and taking a 

provision for doubtful debt. Within the Rabobank Group, a formal analysis of specifically identified larger 

loans takes place every quarter and is reported in the form of loan strategy reports, which include evaluation 

of the risks associated with each loan, the current financial condition of the borrower, the economic 

environment in which the borrower operates, the value of collateral and the strategy for the coming period 

to protect the interests of the Rabobank Group. 

The table below sets forth the Rabobank Group’s bad debt costs for the three years ended December 

31, 2005, per business unit as a percentage of our private sector lending. 

114

Bad debt costs per business unit 

2005 2004 2004 2003 

Domestic Retail 0.09% 0.14% 0.17% 0.13% 

Wholesale and Int. Retail 0.52% 0.21% 0.30% 0.60% 

Leasing 0.72% 0.73% 0.59% 0.65% 

Total 0.20% 0.18% 0.21% 0.24% 




In determining the bad debt costs, corporate loans are assessed on a loan by loan basis and the 

following factors are considered: 

• the financial standing of the customer, including a realistic assessment of the likelihood of 

repayment of the loan within an acceptable period and the extent of our commitments to the 

customer; 

• the realisable value of any collateral (security) for the loan; and 

• the costs associated with obtaining repayment and realisation of any security. 

Country Risk 

Loans to parties abroad expose the Rabobank Group not only to the customary credit risk but also to 

country risks. Country risk is specifically attributable to events in a specific country or group of countries. 

We encounter country risk in our lending, trading and investment activities. We manage country risk using 

a system of internal ratings for each country. Based on these ratings and the determination of our Country 

Limit Committee (‘CLC’) as to how much risk to take on, internal limits per country are established. The 

decisions on the country risk limits are taken at Executive Board level and are based on recommendations 

of the Country Limit Committee. Provisions for country risk are made if repayment problems might arise as 

a result of government measures or extreme circumstances in a country. Due account is taken of risk 

mitigating factors such as collateral outside the country of risk and structure of the transaction. 

Liquidity Risk 

Liquidity risk is the risk that a member of the Group will not be able to meet its financial liabilities when 

due. The Rabobank Group closely monitors its liquidity risk to maintain an adequate liquidity buffer such 

that Group entities are able to meet their financial liabilities when due. In past years, the Rabobank Group 

has worked on a substantial diversification of its funding base. By concentrating on central banks, money 

market funds, pension funds and asset managers, it is less dependent on funds from other commercial 

banks. On the asset side of the balance sheet, greater priority has been given to assets that can be 

converted readily into cash. Liquidity risk is an organisation-wide matter and managed by Treasury 

Rabobank Group in cooperation with Rabobank International Global Financial Markets. 

Operational Risk 

Operational risk is the risk of direct or indirect losses arising from deficiencies in procedures and 

systems and from human failures or from external events. We are in the process of implementing a Groupwide 

operational risk policy which was introduced in mid-2003. Decentralised databases are set up at all 

entities to record operational incidents and report them on a quarterly basis. In addition, sophisticated 

instruments are made available to enable robust operational risk management within each Rabobank Group 

entity. As before, the management of the individual Rabobank Group entities is responsible for developing 

policy, processes and procedures to manage operational risk in line with Group policy. 

115

GOVERNANCE OF THE RABOBANK GROUP 

Supervisory Board and Executive Board 

Rabobank Nederland has a Supervisory Board and an Executive Board. The Supervisory Board (raad 

van commissarissen) of Rabobank Nederland consists of at least seven persons and is responsible for 

monitoring Rabobank Nederland’s policy, compliance with applicable legislation and its articles of 

association and examining and reporting to the General Meeting on the annual statement of accounts. On 

the recommendation of the Supervisory Board the General Meeting appoints the Rabobank Group’s 

external auditor, whose statement on accounts is also submitted to the General Meeting. In addition, the 

Supervisory Board advises the Executive Board. In the performance of their duties, the members of the 

Supervisory Board act in the interests of Rabobank Nederland and its affiliated entities. Members of the 

Supervisory Board are, on the recommendation of the Supervisory Board, appointed by the General 

Meeting. The total remuneration of the members of the Supervisory Board amounted to € 1.2 million in 2005. 

The Executive Board (raad van bestuur) of Rabobank Nederland consists of at least two members. 

The number of members is determined by the Supervisory Board. The members are appointed by the 

Supervisory Board and may be suspended and removed by the Supervisory Board. The Executive Board 

prepares and executes Group strategy and has responsibility for the appointment, suspension and removal 

of general managers of Rabobank Nederland and the management of Rabobank Nederland, which 

includes, under the approval of the Supervisory Board, the authorisation of debenture issues of Rabobank 

Nederland. The Executive Board is responsible for the compilation of the annual statement of accounts for 

adoption by the General Meeting and the recommendation of the profit appropriation to Rabobank 

Nederland’s members. At present, the Executive Board consists of six persons. Bert (H.) Heemskerk is the 

Chairman of the Executive Board of Rabobank Nederland. The total remuneration of the members of the 

Executive Board amounted to € 7.9 million in 2005. 

No individual may be a member of both Rabobank Nederland’s Supervisory Board and Rabobank 

Nederland’s Executive Board. No member of the Supervisory Board is permitted to belong to the staff of 

Rabobank Nederland, a local Rabobank or any institution affiliated with Rabobank Nederland, nor is a 

member of the Supervisory Board permitted to belong to the Supervisory Board, the Executive Board or the 

board of directors of a local Rabobank. No member of the Executive Board is permitted to hold office with, 

or be employed by, any local Rabobank. The members of the Supervisory Board and the Executive Board 

cannot hold any office with a credit institution within the meaning of the Act on the Supervision of the Credit 

System 1992 which is not in any way affiliated with Rabobank Nederland. 

The following persons, all of whom are resident in the Netherlands except Mr. Berndsen who is resident 

in Belgium, are appointed members of the Supervisory Board respectively the Executive Board of Rabobank 

Nederland. 

116

Supervisory Board of Rabobank Nederland 

Name Born Year Appointed 1 Term Expires Nationality 

Lense (L.) Koopmans, Chairman 1943 2002 2009 Dutch 

Leo (L.J.M.) Berndsen 1942 2002 2009 Dutch 

Teun (T.) de Boon 1941 2002 2008 Dutch 

Bernard (B.) Bijvoet 1940 2002 2008 Dutch 

Sjoerd (S.E.) Eisma 1949 2002 2008 Dutch 

Louise (L.O.) Fresco 2 1952 2006 2010 Dutch 

Marinus (M.) Minderhoud 1946 2002 2007 Dutch 

Paul (F.M.) Overmars 1945 2005 2008 Dutch 

Hans (J.A.A.M.) van Rossum 1948 2002 2007 Dutch 

Herman (H.C.) Scheffer 1948 2002 2006 Dutch 

Martin (M.J.M.) Tielen 1942 2002 2006 Dutch 

Aad (A.W.) Veenman 1947 2002 2006 Dutch 

Antoon (A.J.A.M.) Vermeer 1949 2002 2007 Dutch 

Arnold (A.H.C.M) Walravens 1940 2004 2007 Dutch 

(1) As a result of a 2002 amendment of the management organisation of Rabobank Nederland the former supervisory council was replaced by the 

supervisory board due to which the appointment date for a number of supervisory directors was fixed at 2002 even though they had been previously

(electricity), Member of the Supervisory Board of Heembouw Groep B.V., Member of the Supervisory Board 

of Eureko-Achmea. 

Hans (J.A.A.M.) van Rossum: Head of the Administration Department of the Dutch Dairy Commodity 

Board. Chairman of the Board of Directors Zuid-Holland Investment Fund. 

Herman (H.C.) Scheffer: Senior Counsel Boer & Croon (strategy and management). Member of the 

Supervisory Board of the Coöperatieve Cehave Landbouwbelang (agriculture). Member of the Supervisory 

Board of Joint Services International N.V. (clothing). Chairman of the Supervisory Board of Bonda’s 

Veevoederbureau B.V. (livestock feeding). Chairman of the Supervisory Board of De Drie Mollen (coffee and 

tea). Chairman of the Advisory Board of De Telefoongids N.V. (yellow pages). 

Martin (M.J.M.) Tielen: Chairman of the Netherlands Feed Industry Association. President of the 

European Federation for Feed Manufacturers. Member of the European Union Evaluation Commission of 

the European Association of Establishment for Veterinary Education. 

Aad (A.W.) Veenman: Chairman of the Executive Board of N.V. Nederlandse Spoorwegen (Dutch 

railways). Chairman of the Supervisory Board of Koninklijke Ten Cate N.V. (textile). Member of the 

Supervisory Board of TENNET B.V. 

Antoon (A.J.A.M.) Vermeer: Chairman of the Board of Directors of the Southern Agriculture and 

Horticulture Organisation. Member of the Board of Directors of the Netherlands’ Agriculture and Horticulture 

Organisation. Chairman of the Supervisory Board of Sovion N.V. 

Arnold (A.H.C.M.) Walravens: Vice Chairman of the Supervisory Board of Eureko B.V. Member of the 

Board of Directors of Achmea Association. Member of the Supervisory Board of OWM Molest-risico W.A.; 

Member of the Board of Directors of Stichting PVF Nederland. Chairman of the Board of Achmea Re 

Luxembourg. Chairman of the Board of Directors of Eureko Reinsurance S.A., Luxembourg, Chairman of 

the Board of Directors of Eureko Re (Dublin) Ltd., Chairman of the Board of Directors of Achmea Re 

Management Company S.A. Luxembourg, Chairman of the Supervisory Board of Tauw Infra Consult 

(infrastructure consultancy). Member of the Supervisory Board of CSM N.V. (sugar). Director of MBA Studies 

and Member of the senate of International Executive Development Center, Bled, Slovenia. Chairman of the 

Supervisory Board of Wolters Kluwer Nederland B.V. (multi-media publisher). 

Executive Board of Rabobank Nederland 

Name Born Year Appointed Nationality 

Bert (H.) Heemskerk, Chairman 1943 2002 Dutch 

Bert (A.) Bruggink 1963 2004 Dutch 

Hans (J.C.) ten Cate 1946 2000 Dutch 

Piet (P.W.) Moerland 1949 2003 Dutch 

Sipko (S.N.) Schat 1 1960 2006 Dutch 

Piet (P.J.A.) van Schijndel 1950 2002 Dutch 

Rik (D.J.M.G.) baron van Slingelandt 2 1946 1996 Dutch 

(1) The Supervisory Board has resolved to appoint Mr. Schat as a member of the Executive Board as per July 1, 2006 

(2) Mr. van Slingelandt shall retire as a member of the Executive Board as per July 1, 2006 

Bert (H.) Heemskerk: Mr. Heemskerk was appointed Chairman of the Executive Board of Rabobank 

Nederland as of December 1, 2002. Mr. Heemskerk was previously the Chairman of the Executive Board 

of F. van Lanschot Bankiers N.V. from 1991 to 2002. Before moving to F. van Lanschot Bankiers N.V., Mr. 

Heemskerk worked at AMRO Bank/ABN AMRO for more than 20 years, serving as Director General 

Netherlands for ABN AMRO Netherlands from 1988 to 1991. Mr. Heemskerk holds several positions outside 

of Rabobank Nederland’s Executive Board, including, among others, as a Member of the Board of 

Liquidators, a Member of the Board of the Stock Exchange and a Member of the Advisory Council to the 

Amsterdam Institute of Finance and a member of the Board of Supervisory Directors of VADO (investment 

fund). 

Bert (A.) Bruggink: Mr. Bruggink was appointed Chief Financial Officer of the Executive Board of 

Rabobank Nederland as of November 15, 2004. Mr. Bruggink joined the Rabobank Group in 1986. After 

several different jobs in Finance and Control within Rabobank Group, he became Head of Finance and 

Control Rabobank International (1994-1998) and Group Finance Director Rabobank Group (1998-2004). As 

118

CFO he fulfils several additional functions: chairman of the Dutch interbank policy committee on accounting, 

member of the Dutch interbank policy committee on supervision, member of the Dutch interbank policy 

committee on monetary policy, member of the Dutch interbank policy committee on risk management, 

member of the Dutch interbank policy committee of CFO’s and member of policy committee on accounting 

of international bank associations. He also works as a part time professor at the Twente University of 

Technology (Financial Institutions and Markets).Mr Bruggink is a member of the consultative panel of CEBS 

(Committee of European Banking Supervisors). 

Hans (J.C.) ten Cate: Mr. ten Cate was appointed to Rabobank Nederland’s Executive Board as of 

September 1, 2000. As one of the two members of the Executive Board responsible for the wholesale 

business, Mr. ten Cate is primarily responsible for Corporate Clients Rabobank Nederland and the Credit 

Risk Department. Prior to joining Rabobank Nederland, Mr. ten Cate was employed at AMRO Bank/ABN 

AMRO for more than 25 years, concluding his tenure there as Senior Executive Vice-president (directeur 

generaal) Credit & Special Financing in 2000. Within the Rabobank Group, Mr. ten Cate also serves as 

Chairman of the Supervisory Board of Rabo Vastgoed, Chairman of the Supervisory Board of Gilde, 

Chairman of the Supervisory Board of De Lage Landen, Chairman of the Supervisory Board of FGH Bank, 

Vice-Chairman of the Supervisory Board of Robeco, Vice-Chairman of the Yes Bank in India and member 

of the Supervisory Board of Rabohypotheekbank. Mr. ten Cate also acts as Chairman of the Supervisory 

Board of Beurs Rotterdam N.V., Treasurer of the Foundation Museum Boijmans van Beuningen and 

Chairman of the Erasmus University Trust Fund. 

Piet (P.W.) Moerland: Mr. Moerland was appointed to Rabobank Nederland’s Executive Board as of 

January 1, 2003. As one of the two members of the Executive Board focused on the cooperative retail 

business, Mr. Moerland is responsible for Medium and Small scale Business, Shared Services and Facilities 

and the department that operationally supports the local banks. After completing his degree and dissertation 

in the field of economics at the Erasmus University of Rotterdam in 1978, Mr. Moerland undertook a position 

with Rabobank Nederland’s Central Group Staff from 1979 to 1980. Mr. Moerland then took a position as 

a professor of business administration with a focus on economics at the University of Groningen from 1981 

to 1987 and as a professor of business economics with a focus on corporate finance at the University of 

Tilburg from 1988 to 2002. Mr. Moerland also had an unsponsored chair as a professor of corporate 

governance at the University of Tilburg. Within the Rabobank Group Mr. Moerland serves as a Member of 

the Supervisory Board of Rabobank International Advisory Services B.V., a Member of the Supervisory 

Board of Interpolis and a Member of the Board of Directors of Rabobank Foundation. Outside Rabobank, 

Mr. Moerland serves as a Member of the Supervisory Board of Essent N.V. (electricity), a Member of the 

Advisory Board of the Netherlands Order of Accountants and Administration Consultants and a Member of 

the Board of Directors of the NVB (Association of Dutch Banks). 

Sipko (S.N.) Schat: The Supervisory Board has resolved to appoint Mr. Schat as a member of the 

Executive Board of Rabobank Nederland as per July 1, 2006. Mr. Schat took a position as in-house counsel 

with Rabobank Nederland between 1985 and 1990. Mr. Schat was senior manager Structured Finance 

between 1990 and 1995, Head Corporate Finance of Rabobank Ireland Plc between January 1994 and 

December 1994, Head Corporate Finance of Rabobank International between 1999 and 2002, Head 

Structured Finance Europe between 1995 and 1999. Mr. Schat took a position as Head Corporate Finance 

(worldwide), member of the Supervisory Board of Rabobank Ireland Plc and member of the board of Rabo 

Merchant Bank N.V. He was appointed a member of the management board of Rabobank International as 

of April 2002 being responsible for North and South America and as of Septmeber 2004 being responsible 

for Corporate Finance, Trade Finance, Private Equity and Corporate Advisory. 

Piet (P.J.A.) van Schijndel: Mr. van Schijndel was appointed to Rabobank Nederland’s Executive Board 

as of December 1, 2002. As one of the two members of the Executive Board focused on the cooperative 

retail business, Mr. van Schijndel has responsibility for marketing, product development, market support for 

the local banks, private banking and Group ICT. Mr. van Schijndel took a position as a management 

consultant with Rabobank Nederland from 1975 to 1977. From 1977 to 1979, Mr. van Schijndel was Head 

of Insurance Administration. From 1979 to 1983, Mr. van Schijndel was a member of the Staff Group 

Directorate Insurance. Thereafter, he served as Acting Head and Head of the Insurance and Travel 

Directorate from 1983 to 1986 and from 1986 to 1990, respectively, Vice-Chairman of the Executive Board 

of Interpolis from 1990 to 1997 and Chairman of the Executive Board of Interpolis from 1998 to 2002. Mr. 

van Schijndel serves as Chairman of the Supervisory Boards of Obvion and Rabohypotheebank and as a 

Member of the Supervisory Board of De Lage Landen, and the joint venture with KBC Bank. Furthermore, 

Mr. van Schijndel is a Member of the Board of Directors of the NVB (Association of Dutch Banks). 

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Rik (D.J.M.G.) baron van Slingelandt: Mr. van Slingelandt was appointed to Rabobank Nederland’s 

Executive Board as of February 1, 1996. Mr. van Slingelandt is responsible for Rabobank International 

Network, Global Financial Markets, Corporate Finance and Wholesale Support. From 1989 to 1996, he was 

the Director of International Operations for Rabobank Nederland. Mr. van Slingelandt worked with several 

companies before he joined the Rabobank Group. Mr. van Slingelandt was employed by Nationale 

Investeringsbank N.V. from 1972 to 1980. From 1980 to 1982, he was employed at Rijn Schelde Verolme 

as Head of the Financing Department. Subsequently, he was a Financial Director at Verolme Estaleiros 

Reunidos do Brasil S.A. in Rio de Janeiro (1982 – 1985). He joined the Robeco Group in 1985 as a member 

of the Investment Committee (until 1989). Mr. van Slingelandt is a member of the executive boards and 

supervisory boards of a number of Rabobank Group companies, acting as, among others, Chairman of the 

Managing Board of Rabobank International, Chairman of the Board of Directors of Rabobank 

Pensioenfonds, Chairman of the Board of Directors of IPB Holding B.V., Chairman of the Supervisory Board 

of Interpolis, Vice-chairman of the Supervisory Board of BGZ (Bank Gospodarki Zywnosciowej S.A.), 

Member of the Supervisory Board of Robeco Group N.V. and Member of the Board of Directors of Rabo 

Australia Ltd. Mr. van Slingelandt also is Vice-chairman of the Board of Directors of Bank Sarasin & Cie. AG, 

a Member of the Advisory Committee of Issuing Institutions (Euronext) and a Member of the Unico Steering 

Committee. 

Changes 

The Supervisory Board has resolved to appoint Sipko Schat as a member of the Executive Board of 

Rabobank Nederland as per July 1, 2006. 

Rik (D.J.M.G.) baron van Slingelandt will retire as a member of the Executive Board of Rabobank 

Nederland as per July 1, 2006. 

Central Delegates Assembly 

Influence and control of the local Rabobanks with respect to Rabobank Nederland are exercised 

directly or indirectly via representation in two corporate bodies, the Central Delegates Assembly and the 

General Meeting. 

The Central Delegates Assembly consists of the board members of the various Regional Delegates 

Assemblies which consist of the members of Rabobank Nederland, the local Rabobanks. The powers of 

the Central Delegates Assembly include, amongst other, the establishment of rules that all member banks 

must comply with and the right to approve the annual plan and the budget of Rabobank Nederland insofar 

as this concerns the business of the member banks. The outcome can influence Rabobank Nederland’s 

policy. Furthermore, in the Central Delegates Assembly substantive discussions take place which mainly 

concern the business of the local Rabobanks. 

The General Meeting 

The General Meeting is the body through which all local Rabobanks, as members of Rabobank 

Nederland, can exercise direct control. The General Meeting deals with important issues, such as the 

adoption of the financial statements, amendments to the Articles of Association and regulations, and the 

appointment of members of the Supervisory Board. 

Governance of the local Rabobanks 

Each local Rabobank within the Rabobank Group is governed by a board of directors and a supervisory 

board. Members of the supervisory board are elected by the members of the local Rabobank from their 

ranks. There are two possible organisational models for the local Rabobanks: the partnership model and 

the executive management model. 

Partnership model 

In the partnership model, the management of the local Rabobanks consist of persons elected by the 

members from their ranks, plus a managing director who is appointed by the Supervisory Board. The 

managing director is primarily concerned with the day-to-day management of the bank’s operations. The 

Supervisory Board supervises the management. Banks using the partnership model may install a members’ 

council and always have a general meeting. 

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Executive model 

In the executive model, the local Rabobanks have a Board of Directors comprising several persons 

appointed by the Supervisory Board. The Board of directors operates under the supervision of the 

Supervisory Board. In this model, no managers are elected by the members from their ranks, as is the case 

in the partnership model. In order to firmly and permanently embed member influence and control in the 

structure, banks using the executive model install a members’ council. The members’ council assumes the 

bulk of the powers of the General Meeting and furthermore promotes and structures member control and 

engagement. The General Meeting continues to exist, but only decides on major issues only that impact the 

local banks’ continued existence. 

Administrative, Management and Supervisory bodies - conflicts of interests 

The Issuer is not aware of any potential conflicts of interest between the duties to the Issuer of the 

persons listed under ‘Supervisory Board of Rabobank Nederland’ and ‘Executive Board of Rabobank 

Nederland’ above and their private interests or other duties. 

121

states. The EC Directives permit EU member states, when transforming the EC Directives into national law, 

to establish more stringent requirements, but do not permit more lenient requirements. In 2000, the EC 

adopted the Directive of March 20, 2000 on the taking up and pursuit of the Business of Credit Institutions 

(‘EC Directive 2000/12’), which directive consolidated various previous directives, including the EC 

Directives. 

As stated above, the European Commission has now adopted a proposal for the amendment of the 

EC Directive 2000/12 and the EEC Directive 1993/6 to introduce the new capital requirements framework 

agreed by the Basel Committee on Banking Supervision. The proposal sets out new rules on capital 

requirements. The proposal reflects the flexible structure and the major components of Basel II, but has 

been tailored to the specific features of the EU market. 

Instead of the current ‘one-size-fits-all’ approach, the proposed new framework would consist of three 

different approaches allowing financial institutions to choose the approach most suited to them: simple, 

intermediate and advanced. The simple and intermediate approaches would be available by end 2006 (but 

banks could still opt to apply the current rules until end 2007) and the most advanced approaches from end 

2007. Rabobank intends to make use of the advanced approach. 

On December 16, 2002, the European Union adopted a directive on the supplementary supervision of 

credit institutions, insurance undertakings and investment firms in a financial conglomerate. This directive 

aims to address the supervisory issues that arise from the blurring of distinctions between the activities of 

firms in each of the banking, securities, investment services and insurance sectors. The main objectives of 

the directive are to: 

I. ensure that a financial conglomerate has adequate capital; 

II. introduce methods for calculating a conglomerate’s overall solvency position; 

III. deal with the issues of intra-group transactions, exposure to risk and the suitability and professionalism 

of management at financial conglomerate level; and 

IV. prevent situations in which the same capital is used simultaneously as a buffer against risk in two or 

more entities which are members of the same financial conglomerate (‘double gearing’) and where a 

parent issues debt and downstreams the proceeds as equity to its regulated subsidiaries (‘excessive 

leveraging’). 

EU Member States have to provide that the provisions of this directive shall first apply to the supervision 

of accounts for the financial year beginning on January 1, 2005. 

Netherlands Regulation 

General 

In 2001, a major supervisory reform was undertaken in the Netherlands. The sector-oriented 

supervision (by the Dutch Central Bank on banks, the Pensions and Insurance Supervisory Board on 

pension funds and insurance institutions and the Netherlands Authority for the Financial Markets on 

securities institutions) has been replaced by a more functional approach. As of September 2002, supervision 

has been divided into prudential supervision, carried out by the Dutch Central Bank (which has merged with 

the Pension and Insurance Supervisory Board), and conduct of business supervision, carried out by the 

Netherlands Authority for the Financial Markets. 

Pursuant to authority granted under the Netherlands Act, the Dutch Central Bank, on behalf of the 

Dutch Minister of Finance, supervises and regulates the majority of the Rabobank Group’s activities. The 

Netherlands Authority for the Financial Markets supervises primarily the conduct of business. Set forth below 

is a brief summary of the principal aspects of the Netherlands Act in general. 

The Netherlands Act on the Supervision of the Credit System 1992 

Scope of the Act 

A credit institution is any enterprise whose business it is to receive funds repayable on demand or 

subject to notice and to grant credits or make investments for its own account. Rabobank Nederland and 

various Rabobank Group entities, including each of the local Rabobanks are credit institutions and, because 

they are engaged in the securities business as well as the commercial banking business, each is considered 

a ‘universal bank’. 

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Licensing 

Under the Netherlands Act, a credit institution established in the Netherlands is required to obtain a 

license from the Dutch Central Bank before engaging in any banking activities. The requirements to obtain 

a license, among others, are as follows: (i) the day-to-day policy of the credit institution must be determined 

by at least two persons; (ii) the credit institution must have a body of at least three members which has tasks 

similar to those of a board of supervisory directors; and (iii) the credit institution must have a minimum equity 

(eigen vermogen) of € 5,000,000. Also, the Dutch Central Bank shall refuse to grant a license if, among 

other things, it is of the view that (i) the persons who determine the day-to-day policy of the credit institution 

have insufficient expertise to engage in the business of the credit institution, (ii) in view of the interests of the 

creditors or future creditors, the trustworthiness of the persons who determine the day-to-day policy of the 

credit institution is not beyond doubt or (iii) through a qualified holding in the credit institution, influence on 

the policy of such enterprise or institution may be exercised which is contrary to ‘prudent banking policy’ 

(gezond bankbeleid). In addition to certain other grounds, the license may be revoked if a credit institution 

fails to comply with the requirements for maintaining it. 

Reporting and Investigation 

A credit institution is required to file with the Dutch Central Bank its annual financial statements in a 

form approved by the Dutch Central Bank, which includes a balance sheet and a profit and loss statement 

that have been certified by a qualified auditor in the Netherlands or an equally qualified foreign auditor who 

is licensed in the Netherlands. In addition, a credit institution is required to file with the Dutch Central Bank 

or a designated agency monthly balance sheets, on a basis established by the Dutch Central Bank, which 

also has the option to demand more frequent reports (including reports certified by a qualified auditor in the 

Netherlands or an equally qualified foreign auditor who is licensed in the Netherlands). The credit institutions’ 

reports to the Dutch Central Bank are required to be ‘truthful and not misleading’. 

A credit institution must also inform the Dutch Central Bank of any change in number and the identity 

or the credentials of the persons determining its day-to-day policy. Furthermore, a credit institution must 

also inform the Dutch Central Bank if it fails to comply, or to comply fully, with the Dutch Central Bank’s 

standards regarding solvency, liquidity or administrative organisation. 

Supervision 

The Dutch Central Bank exercises supervision with respect to the solvency and liquidity of credit 

institutions, supervision of the administrative organisation of credit institutions and structure supervision 

relating to credit institutions. To this end, the Dutch Central Bank has issued the following general guidelines: 

– Solvency Supervision 

The guidelines of the Dutch Central Bank on solvency supervision require that a credit institution 

maintains own funds in an amount equal to at least eight per cent. of its risk- weighted assets 

operations. These guidelines also impose limitations on the aggregate amount of claims (including 

extensions of credit) a credit institution may have against one debtor or a group of related debtors. 

– Liquidity Supervision 

The guidelines of the Dutch Central Bank relating to liquidity supervision require that a credit institution 

maintains sufficient liquid assets against certain liabilities of the credit institution. The basic principle of 

the liquidity directives is that liquid assets must be held against ‘net’ liabilities of credit institutions (after 

netting out claims and liabilities in a maturity schedule) so that the liabilities can be met on the due 

dates or on demand, as the case may be. These guidelines impose additional liquidity requirements if 

the amount of liabilities of a credit institution with respect to one debtor or group of related debtors 

exceeds a certain limit. 

– Structure Supervision 

The Netherlands Act provides that a credit institution must obtain a declaration of no-objection from 

the Minister of Finance (or, in certain cases, determined by the Minister of Finance from the Dutch 

Central Bank) before, among other things, (i) reducing its own funds (eigen vermogen) by way of 

repayment of capital or distribution of reserves or making disbursements from the item comprising the 

cover for general banking risks as referred to in article 2:424 of the Dutch Civil Code, (ii) acquiring or 

increasing a qualified holding in a regulated institution such as a credit institution or other regulated 

124

financial institution, if the balance sheet total of that institution at the time of the acquisition or increase 

amounts to more than 1% of the credit institution’s consolidated balance sheet total, (iii) acquiring or 

increasing a ‘qualified holding’ in another enterprise or institution if the amount paid for the acquisition 

or the increase together with any amounts paid for prior acquisitions and prior increases exceeds 1% 

of the consolidated own funds (eigen vermogen) of the credit institution, (iv) acquiring all or a substantial 

part of the assets and liabilities of another enterprise or institution, (v) merging with another enterprise 

or institution or (vi) proceeding to financial or corporate reorganisation. For purposes of the Netherlands 

Act, ’qualified holding’ is defined to mean the holding, directly or indirectly, of an interest of at least 

10% of the issued share capital or voting rights in an enterprise or institution, or a similar form of control. 

In addition, any person is permitted to hold, acquire or increase a qualified holding in a credit institution, 

or to exercise any voting power in connection with such holding, only after such declaration of noobjection 

has been obtained. The Netherlands Act provides for certain (prior) notification requirements 

applying to credit institutions and persons increasing or reducing their holdings in credit institutions. 

– Administrative Supervision 

The Dutch Central Bank also supervises the administrative organisation of the individual credit 

institutions, their financial accounting system and internal controls. The administrative organisation 

must be such as to ensure that a credit institution has at all times a reliable and up-to-date overview 

of its rights and obligations. Furthermore, the electronic data processing systems, which form the core 

of the accounting system, must be secured in such a way as to ensure optimum continuity, reliability 

and security against fraud. As part of the supervision of administrative organisations, the Dutch Central 

Bank has also stipulated that this system must be able to prevent conflicts of interests, including the 

abuse of insider information. 

Emergencies 

The Netherlands Act contains an ‘emergency regulation’ which can be declared in respect of a credit 

institution by a Dutch court at the request of the Dutch Central Bank if such credit institution is in a position 

which requires special measures for the protection of its creditors. As of the date of the emergency, only the 

court appointed administrators have the authority to exercise the powers of the organs of the credit 

institution. Furthermore, the emergency regulation provides for special measures for the protection of the 

interests of the creditors of the credit institution. A credit institution can also be declared in a state of 

bankruptcy by the court. 

Rabobank Nederland and the local Rabobanks file consolidated monthly and annual reports that 

provide a true and fair view of their respective financial position and results with the Dutch Central Bank. 

Our independent auditors audit these reports annually. 

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CAPITALISATION OF THE RABOBANK GROUP 

The following table sets forth in summary form the Group’s consolidated own funds and consolidated 

medium and long-term debt securities at December 31, 2005 and at December 31, 2004: 

at at 

(in EUR millions) December December 

31, 2005 31, 2004 

Equity 

Retained earnings and other reserves 15,450 14,018 

Rabobank Member Certificates issued by group companies 5,811 3,840 

Trust Preferred Securities III-VI issued by group companies 2,092 1,877 

Minority interest 2,996 3,269 

Equity 26,349 23,004 

Subordinated loans 2,645 2,129 

Group debt securities 1 135,325 109,460 

Total capitalisation 164,319 134,593 

Breakdown of reserves 

Revaluation reserves available for sale financial assets 184 478 

Other reserves 94 71 

Retained earnings 15,172 13,469 

Reserves 15,450 14,018 

There has been no material change in the capitalisation of the Rabobank Group since December 31, 2005. 

(1) Group debt securities includes short-term debt and long-term debt. The Rabobank Group had short-term debt amounting to € 54,223 million and 

€ 60,073 million, at December 31, 2004 and December 31, 2005, respectively. The Rabobank Group had long-term debt amounting to € 55,237 

million and € 75,252 million, at December 31, 2004 and December 31, 2005, respectively. 

126

RABOBANK AUSTRALIA BRANCH 

ABN 70 003 917 655 

Rabobank Australia Branch is otherwise described as the Australian Branch of Rabobank Nederland. 

Rabobank Australia Group encompasses all the operating entities of the Rabobank Group in Australia 

and New Zealand, including the Australian Branch of Rabobank Nederland, the New Zealand Branch of 

Rabobank Nederland, Rabobank Australia Limited, Rabo Australia Limited, Rabo Equipment Finance 

Limited, Rabo Corporate Finance & Securities Pty Limited, Rabo New Zealand Holdings Limited and 

Rabobank New Zealand Limited, together with their subsidiary companies. 

Rabobank Nederland entered the Australian market in 1990 through the establishment of a 

representative office. This office acted as a liaison office for the Global Rabobank Group by fulfilling a 

supporting and advisory role with respect to business and marketing opportunities in both Australia and 

New Zealand. 

A related area of interest for the Rabobank Group is servicing the trade finance requirements of its 

existing clients and significant growth potential is also identified in agri-trade finance through expansion of 

the group’s client base. 

In 1996, Rabobank Nederland was granted banking authorities to engage in banking on a branch basis 

in Australia and New Zealand. Rabobank Australia Branch is the holder of an Australian Financial Services 

Licence. This is in line with Rabobank Nederland’s international strategy, which is primarily targeted at 

establishing Rabobank Nederland as a global leader in the financing of international food and agri-business. 

Currently, the Australian-based Rabobank Australia Group office staff are all employed by Rabobank 

Australian Branch. 

Rabobank Australia Branch does not publish annual or interim accounts. Because it is a branch of 

Rabobank Nederland, its financial results are incorporated in the financial statements of Rabobank 

Nederland. 

Rabobank Australia Branch is not a stand-alone or separately incorporated legal entity and it does not 

have any share capital. 

127

RABOBANK SINGAPORE BRANCH 

Rabobank Singapore Branch is the Singapore Branch of Rabobank Nederland. 

Rabobank Nederland entered the Singaporean market in 1986 through the establishment of Rabobank 

Singapore Branch (which was then licensed to operate as an Offshore Bank in Singapore by the Monetary 

Authority of Singapore). Rabobank Singapore Branch is registered as a foreign company with the 

Accounting and Corporate Regulatory Authority in Singapore and bears the registration number F03634W. 

Rabobank Singapore Branch is currently licensed as a Wholesale Bank by the Monetary Authority of 

Singapore to carry out a wide range of banking business. 

Rabobank Singapore Branch prepares and files with the Accounting and Corporate Regulatory 

Authority in Singapore annual statutory accounts that reflect its operations in Singapore only. Rabobank 

Singapore Branch does not publish interim accounts. Because it is a branch of Rabobank Nederland, its 

financial results are incorporated in the financial statements of Rabobank Nederland. 

Rabobank Singapore Branch is not a separately incorporated legal entity and its capital is not 

represented by shares. 

128

TAXATION 

EU Savings Directive 

The EU has adopted a Directive (2003/48/EC) regarding the taxation of savings income. The Directive 

requires Member States to provide to the tax authorities of other Member States details of payments of 

interest and other similar income paid by a person to an individual in another Member State, except that 

Austria, Belgium and Luxembourg will instead impose a withholding system for a transitional period unless 

during such period they elect otherwise. 

Taxation in the Netherlands 

The following is intended as general information only and it does not purport to present any 

comprehensive or complete picture of all aspects of Dutch tax laws which could be of relevance to 

a holder of Notes. Prospective holders of Notes should therefore consult their tax advisor regarding 

the tax consequences of any purchase, ownership or disposal of Notes. 

The following summary is based on the Dutch tax law, published case law, and tax practice as in effect 

on the date hereof, without prejudice to any amendments introduced at a later date and implemented with 

or without retroactive effect. 

Withholding Tax 

All payments made under a Note will not be subject to any withholding tax or any deduction for, or on 

account of, any taxes of whatsoever nature imposed, levied, withheld or assessed by the Netherlands or 

any political subdivision or taxing authority thereof or therein, except if, de jure or de facto (rechtens dan wel 

in feite): 

(a) (i) one or more amount(s) to be paid under the Notes is or are contingent, in whole or in part, upon 

the amount of profits derived or distributed by, Rabobank Nederland or by an affiliate of Rabobank 

Nederland (verbonden lichaam); and 

(ii) the Notes do not have a specified final maturity date or have a final maturity date that falls on a 

date more than 10 years after the date of issue of the Notes; or 

(b) (i) one or more obligation(s) to make a payment under the Notes is or are contingent, in whole or in 

part, upon the amount of profits derived or distributed by, Rabobank Nederland or by an affiliate 

of Rabobank Nederland (verbonden lichaam); and 

(ii) the Notes do not have a specified maturity date or have a final maturity date that falls on a date 

more than 50 years after the date of issue of the Notes; and 

(iii) the Notes are subordinated. 

Individual and Corporate Income Tax 

Residents of the Netherlands 

If the Noteholder is resident or deemed to be resident of the Netherlands, subject to Dutch corporate 

income tax and the Notes are attributable to its (deemed) business assets, income derived from the Notes 

and gains realised upon the redemption, (deemed) disposal, transfer or alienation of the Notes are subject 

to corporate income tax at statutory rates, currently 29.6 per cent. 

If the Noteholder is an individual, resident or deemed to be resident of the Netherlands (including the 

non-resident individual holder who has opted to be taxed as a resident of the Netherlands), the actual 

income derived from the Notes and the actual gains realised upon the redemption, (deemed) disposal, 

transfer or alienation of the Notes are subject to individual income tax at progressive tax rates, the maximum 

being 52 per cent, if: 

(i) the Noteholder has an enterprise or an interest in an enterprise, to which enterprise or part 

thereof, as the case may be, the Notes are attributable; or 

(ii) such income or capital gain forms a benefit from miscellaneous activities (resultaat uit overige 

werkzaamheden) which, for instance, would be the case if the Noteholder performs activities with 

respect to the Notes that exceed regular active portfolio management (normaal, actief 

vermogensbeheer). 

129

If the Noteholder is an individual, resident or deemed to be resident of the Netherlands (including the 

non-resident individual holder who has opted to be taxed as a resident of the Netherlands), and if the above 

mentioned conditions (i) and (ii) do not apply to the individual holder, the actual income derived from the 

Notes and the actual gains realised upon the redemption, (deemed) disposal, transfer or alienation of the 

Notes will not be subject to individual income tax. Instead, the individual holder will be taxed on deemed 

income from savings and investments (sparen en beleggen). This deemed income amounts to 4 per cent. 

of the average of the individuals yield basis (rendementsgrondslag) at the beginning of the year and the 

individuals yield basis at the end of the year, insofar the average exceeds a certain threshold. The minimum 

of the individuals yield basis is deemed to amount to nil. The 4 per cent. deemed income from savings and 

investments is taxed annually at a flat rate of 30 per cent. The yield basis includes the fair market value of 

the Notes. 

Non-residents of the Netherlands 

A Noteholder that is not a resident nor deemed to be a resident of the Netherlands nor opts to be taxed 

as a resident of the Netherlands for Dutch tax purposes is not subject to Dutch taxes in respect of income 

derived from the Notes and capital gains realised upon the redemption, (deemed) disposal, transfer or 

alienation of the Notes, provided that: 

(i) the Noteholder does not have an enterprise or an interest in an enterprise that is, in whole or in 

part, carried on through a permanent establishment or a permanent representative in the 

Netherlands to which enterprise or part thereof, as the case may be, the Notes are attributable; 

or 

(ii) such income or capital gain does not form a benefit from miscellaneous activities (resultaat uit 

overige werkzaamheden) in the Netherlands which, for instance, would be the case if the 

Noteholder does not perform activities in the Netherlands with respect to the Notes that exceed 

regular active portfolio management (normaal, actief vermogensbeheer). 

Gift Tax or Inheritance Tax 

No Dutch gift tax or inheritance tax is payable in respect of any gift by, or inheritance on the death of, 

a Noteholder, unless: 

(i) the Noteholder is a resident or is deemed to be a resident of the Netherlands; 

(ii) at the time of the gift or the death of the Noteholder, such Noteholder has an enterprise (or an 

interest in an enterprise) which is, in whole or in part, carried on through a Dutch permanent 

establishment or permanent representative to which the Note is attributable; or 

(iii) the Note is acquired by way of a gift from a holder who passes away within 180 days after the 

date of the gift and who is not at the time of the gift, but is at the time of the death of such holder, 

a resident or a deemed resident of the Netherlands. 

Other Taxes 

No Dutch capital tax, value added tax, or other tax or duty, is due by Rabobank Nederland in respect 

of the issue, acquisition or transfer of the Notes. 

Residency 

Subject to the exceptions above, a Noteholder will not become a resident, or a deemed resident, of 

the Netherlands for tax purposes by reason only of the Noteholder’s acquisition (by way of issue or transfer 

to it), holding or enforcement, of the Notes. 

Taxation in Australia 

The comments below are of a general nature and are based on provisions currently in force in 

Australia as at the date of this Offering Circular. They relate to the position of persons who are the 

beneficial owners of the Notes. The comments are not exhaustive and, in particular, do not deal with 

the position of certain classes of Noteholders (including, without limitation, custodians and other 

third parties who hold Notes on behalf of Australian residents or non-residents of Australia who carry 

on a trade or business at or through a permanent establishment in Australia). Noteholders should 

130

consult their own professional advisers in relation to the Australian taxation implications of 

acquiring, holding or disposing of the Notes in their own particular circumstances. 

Australian withholding tax will not be payable on interest (or amounts in the nature of interest) paid on 

Notes issued by Rabobank Australia Branch to non-residents of Australia who do not derive that interest in 

carrying on business at or through a permanent establishment in Australia, or to Australian residents who 

derive that interest in carrying on a business at or through a permanent establishment outside Australia, if 

the requirements of section 128F of the Income Tax Assessment Act 1936 (the ‘Tax Act’) of Australia are 

complied with. 

Interest (or an amount in the nature of interest) is exempt from Australian withholding tax under section 

128F of the Tax Act if the Issuer of the Notes is either: 

(a) an Australian resident company at the time the Notes are issued and when the interest is paid; or 

(b) a non-resident company carrying on business at or through a permanent establishment in Australia at 

the time the Notes are issued and when the interest is paid 

and the ‘public offer’ test is satisfied. 

Broadly, the public offer test is satisfied if the Notes are issued as a result of being offered for issue: 

(a) to at least 10 persons each of whom: 

(i) was carrying on a business of providing finance, or investing or dealing in securities, in the course 

of operating in financial markets; and 

(ii) is not known, or suspected, by Rabobank to be an associate (as defined in subsection (9) of 

section 128F of the Tax Act) of any of the other persons covered by this paragraph; or 

(b) to at least 100 persons whom it is reasonable for Rabobank to regard as having acquired instruments 

similar to the Notes in the past or being likely to acquire instruments similar to the Notes in the future; 

or 

(c) as a result of being accepted for listing on a stock exchange, where Rabobank Australia Branch has 

entered into an agreement with the dealer, manager or underwriter in relation to the placement of the 

Notes requiring Rabobank Australia Branch to seek such a listing; or 

(d) as a result of negotiations being initiated publicly in electronic form, or in another form, that is used by 

financial markets for dealing in instruments similar to the Notes; or 

(e) to a dealer, manager or underwriter in relation to the placement of the Notes who, under an agreement 

with Rabobank Australia Branch offered the Notes for sale within 30 days in a way covered by any of 

paragraphs (a) to (d) above. 

In relation to the issue of a Global Note, the ‘public offer’ test will be satisfied if the Global Note falls 

within the definition of ‘global bond’ set out in subsection (10) of section 128F of the Tax Act. Broadly 

speaking, this will be the case if the following requirements are satisfied: 

(a) the Global Note describes itself as a global bond or a global note; and 

(b) it is issued to a clearing house (as defined in subsection (9) of section 128F of the Tax Act) or to a 

person as trustee or agent for, or otherwise on behalf of, one or more clearing houses; and 

(c) in connection with the issue of the Global Note, the clearing house or houses confer rights in relation 

to the Global Note on other persons and will record the existence of the rights; and 

(d) before the issue of the Global Note, Rabobank Australia Branch or a Dealer, in relation to the placement 

of debentures or debt interests, on behalf of Rabobank Australia Branch announces that, as a result 

of the issue, such rights will be able to be created; and 

(e) the announcement is made in a way or ways covered by any of subsections (3)(a) to (e) of section 128F 

of the Tax Act (reading a reference in those paragraphs to ‘debentures or debt interests’ as if it were 

a reference to the rights referred to in paragraph (d) above and a reference to the ‘company’ as if it 

included a reference to the Dealer); and 

(f) under the terms of the Global Note, interests in the Global Note are able to be surrendered, whether 

or not in particular circumstances, in exchange for other debentures issued by Rabobank Australia 

Branch that are not themselves Global Notes. 

131

The public offer test is not satisfied if at the time of issue Rabobank knew, or had reasonable grounds 

to suspect, that: 

(a) the Note or an interest in the Note was being, or would later be, acquired directly or indirectly by an 

associate (as defined in subsection (9) of section 128F of the Tax Act) of Rabobank; and 

(b) either: 

(i) the associate is a non-resident and the Note, or interest in the Note, was not being, or would not 

be, acquired by the associate in carrying on a business at or through a permanent establishment 

in Australia; or 

(ii) the associate is a resident of Australia and the Note, or interest in the Note, was being, or would 

be, acquired by the associate in carrying on a business at or through a permanent establishment 

in a country outside Australia; and 

(c) the Note or interest in the Note, was not being, or would not be, acquired by the associate in the 

capacity of a dealer, manager or underwriter in relation to the placement of the Notes, or a clearing 

house, custodian, funds manager or responsible entity of a registered scheme (as defined in the 

Corporations Act 2001 of Australia). 

The exemption in section 128F of the Tax Act does not apply to interest (or an amount in the nature of 

interest) paid by Rabobank Australia Branch to a holder in respect of a Note, if Rabobank was aware or had 

reasonable grounds to suspect, at the time of payment, that: 

(a) the holder is an associate (as defined in subsection (9) of section 128F of the Tax Act) of Rabobank; 

and 

(b) either: 

(i) the associate is a non-resident and the payment is not received by the associate in respect of a 

Note that the associate acquired in carrying on a business at or through a permanent 

establishment in Australia; or 

(ii) the associate is a resident of Australia and the payment is received by the associate in respect of 

a Note that the associate acquired in carrying on a business at or through a permanent 

establishment in a country outside Australia; and 

(c) the associate does not receive the payment in the capacity of a clearing house, paying agent, 

custodian, funds manager or responsible entity of a registered scheme (as defined in the Corporations 

Act 2001 of Australia). 

In certain circumstances, section 126 of the Tax Act imposes a type of withholding tax at the rate of 

47 per cent. on the payment of interest on bearer notes if the issuer fails to disclose the names and 

addresses of the holders to the Australian Taxation Office. Where interests in the relevant Notes are held by 

persons through Euroclear and/or Clearstream, Luxembourg, Rabobank Australia Branch intends to treat 

the operators of those systems as the holders of the relevant Notes for the purpose of section 126. 

If Rabobank Australia Branch is compelled by law at any time to withhold or deduct an amount in 

respect of any present or future taxes or duties of whatever nature imposed or levied by or on behalf of the 

Commonwealth of Australia or any authority therein having the power to tax, it will, except as stated in the 

Notes, pay such additional amounts as will result in the payment to the Noteholders concerned of the sum 

which would otherwise have been payable on the Notes. 

The Taxation Administration Act 1953 of Australia also requires a further type of withholding (Foreign 

Resident Withholding) which broadly provides that an entity carrying on business in Australia must withhold 

an amount from certain payments (prescribed by regulation) paid to non- residents, unless an appropriate 

exemption applies. Foreign Resident Withholding does not apply to payments of interest for the purposes 

of Division 11A of the Tax Act. Noteholders should obtain their own specific advice as to the effect (if any) 

of the Foreign Resident Withholding provisions in respect of any other payments received in connection with 

the Notes. 

Rabobank Australia Branch has been advised by its Australian counsel that, under current Australian law: 

(a) subject to compliance with the requirements of section 128F of the Tax Act referred to above, 

payments of principal and interest (or amounts in the nature of, or in substitution for, interest) to a holder 

of a Note who: 

132

(b) 

(c) 

(d) 

(e) 

(f) 

(g) 

(i) is a non-resident of Australia; 

(ii) during the taxable year has not carried on business at or through a permanent establishment 

within Australia; and 

(iii) is not an associate (as defined in subsection (9) of section 128F of the Tax Act) of Rabobank other 

than an associate who receives the payment in the capacity of a clearing house, paying agent, 

custodian, funds manager or responsible entity of a registered scheme (as referred to above) or, 

if the holder is such an associate, Rabobank did not know this or have reasonable grounds to 

suspect it, 

will not be subject to Australian withholding tax or Australian income tax; 

a holder of a Note who is a non-resident of Australia and who during the taxable year has not carried 

on business at or through a permanent establishment in Australia will not be subject to Australian 

income or capital gains tax on gains realised during that year on sale or redemption of the Note, 

provided that such gains do not have an Australian source and the Note was not used at any time by 

the holder in carrying on a business at or through a permanent establishment in Australia. A gain arising 

on the sale of a Note by a non-Australian resident holder to another non-Australian resident where the 

Note is sold outside Australia and all negotiations and documentation are conducted and executed 

outside Australia would not be regarded as having an Australian source; 

the Notes will not be subject to death, estate or succession duties imposed by Australia or by any 

instrumentality thereof or therein, if held outside Australia, or by a non-resident, at the time of death; 

no ad valorem stamp duty nor issue registration or similar taxes are payable in Australia on the issue 

or transfer of the Notes; 

no Australian goods and services tax is payable on the issue or transfer of Notes or in respect of the 

payment of principle or interest on the Notes; 

Australian resident Noteholders and non-resident Noteholders who hold their Notes in the course of 

carrying on a business through an Australian permanent establishment, will be required to include any 

interest derived in respect of the Notes in their assessable income. Depending upon the terms of the 

Notes, such Noteholders may also be required to include in their assessable income, or may be 

allowed a deduction in respect of, any profit or loss (respectively) on sale or redemption of the Notes; 

and 

payment of interest on Notes issued by Rabobank Australian Branch to Australian residents may be 

subject to withholding tax under Part VA of the Tax Act and section 12-140 of the Taxation 

Administration Act 1953 of Australia where the recipient of the interest does not quote their tax file 

number, or in certain circumstances, their Australian Business Number, or relevant exemption. Any 

such tax will be withheld at the rate currently of 48.5%. 

Taxation in Singapore 

The statements below are general in nature and are based on certain aspects of current tax laws in 

Singapore and administrative guidelines issued by the Monetary Authority of Singapore (‘MAS’) in force as 

at the date of this Offering Circular and are subject to any changes in such laws or guidelines, or the 

interpretation of such laws or guidelines, occurring after such date, which changes could be made on a 

retroactive basis. Neither those statements nor any other statements in this Offering Circular are to be 

regarded as advice on the tax position of any holder of the Notes or of any person acquiring, selling, or 

otherwise dealing with the Notes or on any tax implications arising from the acquisition, sale or other dealings 

in respect of the Notes. The statements do not purport to be a comprehensive description of all the tax 

considerations that may be relevant to a decision to purchase, own or dispose of the Notes and do not 

purport to deal with the tax consequences applicable to all categories of investors, some of which (such as 

dealers in securities) may be subject to special rules. Prospective holders of the Notes who are in doubt 

about their respective tax positions or any such tax implications of the purchase, ownership or transfer of 

Notes or who may be subject to tax in a jurisdiction other than Singapore should consult their professional 

advisers. 

Singapore Interest and other Payments 

Subject to the following paragraphs, under section 12(6) of the Income Tax Act, Chapter 134 of 

Singapore (the ‘Income Tax Act’) the following payments are deemed to be derived from Singapore: 

133

(a) interest, commission, fee or any other payment in connection with any loan or indebtedness or with 

any arrangement, management, guarantee, or service relating to any loan or indebtedness which is (i) 

borne, directly or indirectly, by a person resident in Singapore or a permanent establishment in 

Singapore except in respect of any business carried on outside Singapore through a permanent 

establishment outside Singapore or any immovable property situated outside Singapore; or (ii) 

deductible against any income accruing in or derived from Singapore; or 

(b) income derived from loans where the funds provided by such loans are brought into or used in 

Singapore. 

This is expected to apply to payments made by Rabobank Singapore Branch. Further, such payments 

where made to a person not known to the paying party to be a resident in Singapore for tax purposes are 

subject to withholding tax in Singapore at the prevailing corporate tax rate (the corporate tax is 20 per cent 

with effect from the Year of Assessment 2005, that is for income earned in the financial year or other basis 

period ended 2004). However, if the payment is derived on or after February 28, 1996 by a person not 

resident in Singapore otherwise than from any trade, business, profession or vocation carried on or 

exercised by such person in Singapore and is not effectively connected with any permanent establishment 

in Singapore of that person, the payment is subject to a final withholding tax rate of 15 per cent. The rate 

of 15 per cent. may be reduced by applicable tax treaties. 

Certain Singapore-sourced investment income derived by individuals on or after January 1, 2004 from 

financial investments is exempt from tax, including: 

(a) interest from debt securities; and 

(b) discount income from debt securities (not including discount income from secondary trading), 

except where such income is derived through a partnership in Singapore or is derived from the carrying on 

of a trade, business or profession. 

In addition, if the Dealers for more than half of the principal amount of a tranche of Notes issued under 

the Programme during the period from the date of this Offering Circular to December 31, 2008 are: 

(i) financial institutions who have been awarded ‘Financial Sector Incentive (Bond Market) Company’ 

status by the Minister for Finance of Singapore or such person as he may appoint; or 

(ii) financial institutions in Singapore where their staff based in Singapore have a leading and 

substantial role in the distribution of such tranche of Notes, 

such tranche of Notes (‘Relevant Notes’) would be ‘qualifying debt securities’ under the Income Tax Act. 

If the Relevant Notes are ‘qualifying debt securities’: 

(a) subject to certain prescribed conditions having been fulfilled (including the furnishing by the Issuer, or 

such other person as the Comptroller of Income Tax in Singapore (the ‘Comptroller’) may direct, of a 

return on the Relevant Notes within such period as the Comptroller may specify and such other 

particulars in connection with the Relevant Notes as the Comptroller may require to the Comptroller 

and the MAS and the inclusion by the Issuer in all offering documents relating to the Relevant Notes a 

statement to the effect that where interest or discount income is derived from the Relevant Notes by 

a person who is not resident in Singapore and who carries on any operation in Singapore through a 

permanent establishment in Singapore, the tax exemption (mentioned below) shall not apply if such 

non-resident person acquires the Relevant Notes using funds and profits from that person’s operations 

through a Singapore permanent establishment, interest on Relevant Notes, and discount income (not 

including discount income arising from secondary trading) on Relevant Notes (‘Relevant Discount 

Income’), derived by a holder who is not resident in Singapore and (aa) who does not have any 

permanent establishment in Singapore, or (bb) carries on any operation in Singapore through a 

permanent establishment in Singapore but the funds used by that person to acquire the Relevant 

Notes are not funds and profits of that person’s operations through a permanent establishment in 

Singapore, are exempt from Singapore tax; 

(b) subject to certain conditions having been fulfilled (including the furnishing by the Issuer, or such other 

person as the Comptroller may direct, of a return on the Relevant Notes within such period as the 

Comptroller may specify and such other particulars in connection with the Relevant Notes as the 

Comptroller may require to the Comptroller and the MAS), interest on Relevant Notes and Relevant 

Discount Income derived by any company in Singapore is subject to tax at a concessionary rate of 10 

per cent.; 

134

(c) interest on Relevant Notes and Relevant Discount Income derived by a body of persons (as defined in 

the Income Tax Act) in Singapore is subject to tax at a concessionary rate of 10 per cent.; and 

(d) subject to: 

(i) the Issuer including in all offering documents relating to the Relevant Notes a statement to the 

effect that any person whose interest or discount income derived from the Relevant Notes is not 

exempt from tax shall include such interest or discount income in a return of income made under 

the Income Tax Act; and 

(ii) the Issuer, or such other person as the Comptroller may direct, furnishing to the Comptroller and 

MAS a return on the Relevant Notes within such period as the Comptroller may specify and such 

other particulars in connection with those securities as the Comptroller may require, 

interest and Relevant Discount Income derived from the Relevant Notes is not subject to withholding 

of tax by the Issuer. 

However, notwithstanding the foregoing: 

(i) if during the primary launch of any tranche of Relevant Notes, such Relevant Notes are issued to 

fewer than four persons and 50 per cent. or more of the principal amount of such Relevant Notes 

is beneficially held or funded, directly or indirectly, by related parties of the Issuer, such Relevant 

Notes would not qualify as ‘qualifying debt securities’; and 

(ii) even though a particular tranche of Relevant Notes are ‘qualifying debt securities’, if, at any time 

during the tenure of such tranche of Relevant Notes, 50 per cent. or more of the principal amount 

of such Relevant Notes is held beneficially or funded, directly or indirectly, by any related party(ies) 

of the Issuer, interest and discount income derived from that tranche of Relevant Notes held by: 

(a) any related party of the Issuer, or 

(b) any other person where the funds used by such person to acquire such Relevant Notes are obtained, 

directly or indirectly, from any related party of the Issuer, shall not be eligible for the tax exemption, 

withholding tax exemption or concessionary rate of tax of 10 per cent, described in paragraphs (a) to 

(d) above. 

The term ‘related party’, in relation to a person, means any other person who, directly or indirectly, 

controls that person, or is controlled, directly or indirectly, by that person, or where he and that other person, 

directly or indirectly, are under the control of a common person. 

Notwithstanding that the Issuer is permitted to make interest and discount payments in respect of the 

Relevant Notes without deduction or withholding for tax under Section 45(1) of the Income Tax Act, any 

person whose interest or discount income derived from the Relevant Notes is not exempt from tax is 

required under the Income Tax Act to include such interest and discount income in a return of income made 

under the Income Tax Act. 

Capital Gains 

Any gains in the nature of capital made from the sale of Notes will not be taxable in Singapore. However, 

any gains from the sale of Notes which are gains from any trade, business, profession or vocation carried 

on by that person, if occurring in or derived from Singapore, may be taxable as such gains are considered 

revenue in nature. 

Luxembourg 

The comments below are intended as a basic summary of certain tax consequences in relation to the 

purchase, ownership and disposition of the Notes under Luxembourg law. Persons who are in any doubt 

as to their tax position should consult a professional tax adviser. 

Withholding tax 

Under Luxembourg tax law currently in effect and with the possible exception of interest paid to 

individual Noteholders, there is no Luxembourg withholding tax on payments of interest (including accrued 

but unpaid interest). There is also no Luxembourg withholding tax, with the possible exception of payments 

made to individual Noteholders, upon repayment of principal in case of reimbursement, redemption, 

repurchase or exchange of the Notes. 

135

Luxembourg non-resident individuals 

Under the Luxembourg laws dated June 21, 2005 implementing the European Council Directive 

2003/48/EC on the taxation of savings income (the ’Savings Directive’) and several agreements concluded 

between Luxembourg and certain dependent territories of the European Union, a Luxembourg based paying 

agent (within the meaning of the Savings Directive) is required since 1 July 2005 to withhold tax on interest 

and other similar income paid by it to (or under certain circumstances, to the benefit of) an individual resident 

in another Member State, unless the beneficiary of the interest payments elects for an exchange of 

information. The same regime applies to payments to individuals resident in certain EU dependent territories. 

The withholding tax rate is initially 15 per cent., increasing steadily to 20 per cent. and to 35 per cent. 

The withholding tax system will only apply during a transitional period, the ending of which depends on the 

conclusion of certain agreements relating to information exchange with certain third countries. 

Luxembourg resident individuals 

A 10% withholding tax has been introduced, as from January 1, 2006, on interest payments made by 

Luxembourg paying agents (defined in the same way as in the Savings Directive) to Luxembourg individual 

residents. Only interest accrued after July 1, 2005 falls within the scope of the withholding tax. This 

withholding tax represents the final tax liability for the Luxembourg individual resident taxpayers. 

Taxation in the United States 

The following is a summary of certain material U.S. federal income tax consequences of the acquisition, 

ownership and disposition of Notes by a U.S. Holder (as defined below). Except where otherwise expressly 

noted, all references to Notes in this summary refer only to Registered Notes issued by Rabobank 

Nederland. This summary does not address the material U.S. federal income tax consequences of every 

type of Note which may be issued under the Programme, and the relevant Final Terms will contain additional 

or modified disclosure concerning the material U.S. federal income tax consequences relevant to such type 

of Note as appropriate. This summary deals only with purchasers of Notes that are U.S. Holders and that 

will hold the Notes as capital assets. The discussion does not cover all aspects of U.S. federal income 

taxation that may be relevant to, or the actual tax effect that any of the matters described herein will have 

on, the acquisition, ownership or disposition of Notes by particular investors, and does not address state, 

local, foreign or other tax laws. In particular, this summary does not discuss all of the tax considerations that 

may be relevant to certain types of investors subject to special treatment under the U.S. federal income tax 

laws (such as financial institutions, insurance companies, investors liable for the alternative minimum tax, 

individual retirement accounts and other tax-deferred accounts, tax-exempt organisations, dealers in 

securities or currencies, investors that will hold the Notes as part of straddles, hedging transactions or 

conversion transactions for U.S. federal income tax purposes or investors whose functional currency is not 

the U.S. Dollar). Moreover, the summary does not address the U.S. federal income tax treatment of (i) Index 

Linked Notes, (ii) Equity Linked Notes, (iii) Notes for which payments of principal or interest are denominated 

in, or determined by reference to, more than one currency, or (iv) Notes with a term of more than 30 years. 

The U.S. federal income tax consequences of owning any such Notes will be discussed in the applicable 

Final Terms. 

As used herein, the term ‘U.S. Holder’ means a beneficial owner of Notes that is for U.S. federal income 

tax purposes (i) a citizen or resident of the United States, (ii) a corporation, or other entity treated as a 

corporation, created or organised under the laws of the United States or any State thereof, (iii) an estate the 

income of which is subject to U.S. federal income tax without regard to its source or (iv) a trust if a court 

within the United States is able to exercise primary supervision over the administration of the trust and one 

or more U.S. persons have the authority to control all substantial decisions of the trust, or the trust has 

elected to be treated as a domestic trust. 

The U.S. federal income tax treatment of a partner in a partnership that holds Notes will depend on 

the status of the partner and the activities of the partnership. Prospective purchasers that are partnerships 

should consult their tax adviser concerning the U.S. federal income tax consequences to their partners of 

the acquisition, ownership and disposition of Notes by the partnership. 

The summary is based on the tax laws of the United States, including the Internal Revenue Code of 

1986, as amended (the ‘Code’), its legislative history, existing and proposed regulations thereunder, 

published rulings and court decisions, all as currently in effect and all subject to change at any time, possibly 

with retroactive effect. 

136

Bearer Notes (including Exchangeable Bearer Notes while in bearer form) are not being offered to U.S. 

Holders. A U.S. Holder who owns a Bearer Note may be subject to limitations under United States income 

tax laws, including the limitations provided in sections 165(j) and 1287(a) of the Code. 

To ensure compliance with Internal Revenue Service Circular 230, U.S. Holders are hereby notified 

that: (a) any discussion of federal tax issues in this Offering Circular is not intended or written by us to be 

relied upon, and cannot be relied upon by U.S. Holders for the purpose of avoiding penalties that may be 

imposed on U.S. Holders under the Internal Revenue Code; (b) such discussion is written to support the 

promotion or marketing of the transactions or matters addressed herein; and (c) U.S. Holders should seek 

advice based on their particular circumstances from an independent tax advisor. 

THE SUMMARY OF U.S. FEDERAL INCOME TAX CONSEQUENCES SET OUT BELOW IS FOR 

GENERAL INFORMATION ONLY. PROSPECTIVE PURCHASERS SHOULD CONSULT THEIR OWN 

TAX ADVISERS AS TO THE PARTICULAR TAX CONSEQUENCES TO THEM OF OWNING THE 

NOTES, INCLUDING THE APPLICABILITY AND EFFECT OF STATE, LOCAL, FOREIGN AND OTHER 

TAX LAWS AND POSSIBLE CHANGES IN TAX LAW. 

Payments of Interest 

General 

Interest on a Note, whether payable in U.S. Dollars or a currency, composite currency or basket of 

currencies other than U.S. Dollars (a ‘foreign currency’), other than interest on a ‘Discount Note’ that is not 

‘qualified stated interest’ (each as defined below under ‘— Original Issue Discount — General’), will be 

taxable to a U.S. Holder as ordinary income at the time it is received or accrued, depending on the holder’s 

method of accounting for tax purposes. Interest paid by Rabobank Nederland on the Notes and original 

issue discount, if any, accrued with respect to the Notes (as described below under ‘— Original Issue 

Discount’) generally will constitute income from sources outside the United States. Prospective purchasers 

should consult their tax advisers concerning the applicability of the foreign tax credit and source of income 

rules to income attributable to the Notes. 

Original Issue Discount 

General 

The following is a summary of the principal U.S. federal income tax consequences of the ownership of 

Notes issued with original issue discount (‘OID’). The following summary does not discuss Notes that are 

characterised as contingent payment debt instruments for U.S. federal income tax purposes. In the event 

Rabobank Nederland issues contingent payment debt instruments the applicable Final Terms will describe 

the material U.S. federal income tax consequences thereof. 

A Note, other than a Note with a term of one year or less (a ‘Short-Term Note’), will be treated as issued 

with OID (a ‘Discount Note’) if the excess of the Note’s ‘stated redemption price at maturity’ over its issue 

price is equal to or more than a de minimis amount (0.25 per cent. of the Note’s stated redemption price at 

maturity multiplied by the number of complete years to its maturity). An obligation that provides for the 

payment of amounts other than qualified stated interest before maturity (an ‘instalment obligation’) will be 

treated as a Discount Note if the excess of the Note’s stated redemption price at maturity over its issue price 

is greater than 0.25 per cent. of the Note’s stated redemption price at maturity multiplied by the weighted 

average maturity of the Note. A Note’s weighted average maturity is the sum of the following amounts 

determined for each payment on a Note (other than a payment of qualified stated interest): (i) the number 

of complete years from the issue date until the payment is made multiplied by (ii) a fraction, the numerator 

of which is the amount of the payment and the denominator of which is the Note’s stated redemption price 

at maturity. Generally, the issue price of a Note will be the first price at which a substantial amount of Notes 

included in the issue of which the Note is a part is sold to persons other than bond houses, brokers, or 

similar persons or organisations acting in the capacity of underwriters, placement agents or wholesalers. 

The stated redemption price at maturity of a Note is the total of all payments provided by the Note that are 

not payments of ‘qualified stated interest’. A qualified stated interest payment is generally any one of a series 

of stated interest payments on a Note that are unconditionally payable at least annually at a single fixed rate 

(with certain exceptions for lower rates paid during some periods), or a variable rate (in the circumstances 

described below under ‘— Floating Rate Notes’), applied to the outstanding principal amount of the Note. 

Solely for purposes of determining whether a Note has OID, Rabobank Nederland will be deemed to 

exercise any call option that has the effect of decreasing the yield on the Note, and the U.S. Holder will be 

deemed to exercise any put option that has the effect of increasing the yield on the Note. 

137

U.S. Holders of Discount Notes must include OID in income calculated on a constant-yield method 

before the receipt of cash attributable to the income, and generally will have to include in income increasingly 

greater amounts of OID over the life of the Discount Notes. The amount of OID includible in income by a 

U.S. Holder of a Discount Note is the sum of the daily portions of OID with respect to the Discount Note for 

each day during the taxable year or portion of the taxable year on which the U.S. Holder holds the Discount 

Note (‘accrued OID’). The daily portion is determined by allocating to each day in any ‘accrual period’ a pro 

rata portion of the OID allocable to that accrual period. Accrual periods with respect to a Note may be of 

any length selected by the U.S. Holder and may vary in length over the term of the Note as long as (i) no 

accrual period is longer than one year and (ii) each scheduled payment of interest or principal on the Note 

occurs on either the final or first day of an accrual period. The amount of OID allocable to an accrual period 

equals the excess of (a) the product of the Discount Note’s adjusted issue price at the beginning of the 

accrual period and the Discount Note’s yield to maturity (determined on the basis of compounding at the 

close of each accrual period and properly adjusted for the length of the accrual period) over (b) the sum of 

the payments of qualified stated interest on the Note allocable to the accrual period. The ‘adjusted issue 

price’ of a Discount Note at the beginning of any accrual period is the issue price of the Note increased by 

(x) the amount of accrued OID for each prior accrual period and decreased by (y) the amount of any 

payments previously made on the Note that were not qualified stated interest payments. 

Acquisition Premium 

A U.S. Holder that purchases a Discount Note for an amount less than or equal to the sum of all 

amounts payable on the Note after the purchase date other than payments of qualified stated interest but 

in excess of its adjusted issue price (any such excess being ‘acquisition premium’) and that does not make 

the election described below under ‘Election to Treat All Interest as Original Issue Discount’ is permitted to 

reduce the daily portions of OID by a fraction, the numerator of which is the excess of the U.S. Holder’s 

adjusted basis in the Note immediately after its purchase over the Note’s adjusted issue price, and the 

denominator of which is the excess of the sum of all amounts payable on the Note after the purchase date, 

other than payments of qualified stated interest, over the Note’s adjusted issue price. 

Market Discount 

A Note, other than a Short-Term Note, generally will be treated as purchased at a market discount (a 

‘Market Discount Note’) if the Note’s stated redemption price at maturity or, in the case of a Discount Note, 

the Note’s ‘revised issue price’, exceeds the amount for which the U.S. Holder purchased the Note by at 

least 0.25 per cent. of the Note’s stated redemption price at maturity or revised issue price, respectively, 

multiplied by the number of complete years to the Note’s maturity (or, in the case of a Note that is an 

instalment obligation, the Note’s weighted average maturity). If this excess is not sufficient to cause the Note 

to be a Market Discount Note, then the excess constitutes ‘de minimis market discount’. For this purpose, 

the ‘revised issue price’ of a Note generally equals its issue price, increased by the amount of any OID that 

has accrued on the Note, and decreased by the amount of any payments previously made on the Note that 

were not qualified stated interest payments. 

Under current law, any gain recognised on the maturity or disposition of a Market Discount Note 

(including any payment on a Note that is not qualified stated interest) will be treated as ordinary income to 

the extent that the gain does not exceed the accrued market discount on the Note. Alternatively, a U.S. 

Holder of a Market Discount Note may elect to include market discount in income currently over the life of 

the Note. This election shall apply to all debt instruments with market discount acquired by the electing U.S. 

Holder on or after the first day of the first taxable year to which the election applies. This election may not 

be revoked without the consent of the U.S. Internal Revenue Service (the ‘IRS’). A U.S. Holder of a Market 

Discount Note that does not elect to include market discount in income currently will generally be required 

to defer deductions for interest on borrowings incurred to purchase or carry a Market Discount Note that is 

in excess of the interest and OID on the Note includible in the U.S. Holder’s income, to the extent that this 

excess interest expense does not exceed the portion of the market discount allocable to the days on which 

the Market Discount Note was held by the U.S. Holder. 

Under current law, market discount will accrue on a straight-line basis unless the U.S. Holder elects to 

accrue the market discount on a constant-yield method. This election applies only to the Note with respect 

to which it is made and is irrevocable. 

138

Election to Treat All Interest as Original Issue Discount 

A U.S. Holder may elect to include in gross income all interest that accrues on a Note using the 

constant-yield method described above under ‘— Original Issue Discount — General,’ with certain 

modifications. For purposes of this election, interest includes stated interest, OID, de minimis OID, market 

discount, de minimis market discount and unstated interest, as adjusted by any amortisable bond premium 

(described below under ‘Notes Purchased at a Premium’) or acquisition premium. This election will generally 

apply only to the Note with respect to which it is made and may not be revoked without the consent of the 

IRS. If the election to apply the constant-yield method to all interest on a Note is made with respect to a 

Market Discount Note, the electing U.S. Holder will be treated as having made the election discussed above 

under ‘Market Discount’ to include market discount in income currently over the life of all debt instruments 

with market discount held or thereafter acquired by the U.S. Holder. U.S. Holders should consult their tax 

advisers concerning the propriety and consequences of this election. 

Floating Rate Notes 

Notes that provide for interest at variable rates (‘Floating Rate Notes’) generally will bear interest at a 

‘qualified floating rate’ and thus will be treated as ‘variable rate debt instruments’ under Treasury regulations 

governing accrual of OID. A Floating Rate Note will qualify as a ‘variable rate debt instrument’ if (a) its issue 

price does not exceed the total noncontingent principal payments due under the Floating Rate Note by more 

than a specified de minimis amount, (b) it provides for stated interest, paid or compounded at least annually, 

at (i) one or more qualified floating rates, (ii) a single fixed rate and one or more qualified floating rates, (iii) a 

single objective rate, or (iv) a single fixed rate and a single objective rate that is a qualified inverse floating 

rate and (c) it does not provide for any payments that are contingent (other than as descibed in (a) above). 

A ‘qualified floating rate’ is any variable rate where variations in the value of the rate can reasonably be 

expected to measure contemporaneous variations in the cost of newly borrowed funds in the currency in 

which the Floating Rate Note is denominated. A fixed multiple of a qualified floating rate will constitute a 

qualified floating rate only if the multiple is greater than 0.65 but not more than 1.35. A variable rate equal 

to the product of a qualified floating rate and a fixed multiple that is greater than 0.65 but not more than 

1.35, increased or decreased by a fixed rate, will also constitute a qualified floating rate. In addition, two or 

more qualified floating rates that can reasonably be expected to have approximately the same values 

throughout the term of the Floating Rate Note (e.g., two or more qualified floating rates with values within 

25 basis points of each other as determined on the Floating Rate Note’s issue date) will be treated as a 

single qualified floating rate. Notwithstanding the foregoing, a variable rate that would otherwise constitute 

a qualified floating rate but which is subject to one or more restrictions such as a maximum numerical 

limitation (i.e., a cap) or a minimum numerical limitation (i.e., a floor) may, under certain circumstances, fail 

to be treated as a qualified floating rate unless the cap or floor is fixed throughout the term of the Note. 

An ‘objective rate’ is a rate that is not itself a qualified floating rate but which is determined using a 

single fixed formula and which is based on objective financial or economic information (e.g., one or more 

qualified floating rates or the yield of actively traded personal property). A rate will not qualify as an objective 

rate if it is based on information that is within the control of Rabobank Nederland (or a related party) or that 

is unique to the circumstances of Rabobank Nederland (or a related party), such as dividends, profits or the 

value of Rabobank Nederland’s stock (although a rate does not fail to be an objective rate merely because 

it is based on the credit quality of Rabobank Nederland). Other variable interest rates may be treated as 

objective rates if so designated by the IRS in the future. Despite the foregoing, a variable rate of interest on 

a Floating Rate Note will not constitute an objective rate if it is reasonably expected that the average value 

of the rate during the first half of the Floating Rate Note’s term will be either significantly less than or 

significantly greater than the average value of the rate during the final half of the Floating Rate Note’s term. 

A ‘qualified inverse floating rate’ is any objective rate where the rate is equal to a fixed rate minus a qualified 

floating rate, as long as variations in the rate can reasonably be expected to inversely reflect 

contemporaneous variations in the qualified floating rate. If a Floating Rate Note provides for stated interest 

at a fixed rate for an initial period of one year or less followed by a variable rate that is either a qualified 

floating rate or an objective rate for a subsequent period and if the variable rate on the Floating Rate Note’s 

issue date is intended to approximate the fixed rate (e.g., the value of the variable rate on the issue date 

does not differ from the value of the fixed rate by more than 25 basis points), then the fixed rate and the 

variable rate together will constitute either a single qualified floating rate or objective rate, as the case 

may be. 

A qualified floating rate or objective rate in effect at any time during the term of the instrument must be 

set at a ‘current value’ of that rate. A ‘current value’ of a rate is the value of the rate on any day that is no 

139

earlier than three months prior to the first day on which that value is in effect and no later than one year 

following that first day. 

If a Floating Rate Note that provides for stated interest at either a single qualified floating rate or a single 

objective rate throughout the term thereof qualifies as a ‘variable rate debt instrument’, then any stated 

interest on the Note which is unconditionally payable in cash or property (other than debt instruments of the 

Issuer) at least annually will constitute qualified stated interest and will be taxed accordingly. Thus, a Floating 

Rate Note that provides for stated interest at either a single qualified floating rate or a single objective rate 

throughout the term thereof and that qualifies as a ‘variable rate debt instrument’ will generally not be treated 

as having been issued with OID unless the Floating Rate Note is issued at a ‘true’ discount (i.e., at a price 

below the Note’s stated principal amount) in excess of a specified de minimis amount. OID on a Floating 

Rate Note arising from ‘true’ discount is allocated to an accrual period using the constant yield method 

described above by assuming that the variable rate is a fixed rate equal to (i) in the case of a qualified floating 

rate or qualified inverse floating rate, the value, as of the issue date, of the qualified floating rate or qualified 

inverse floating rate, or (ii) in the case of an objective rate (other than a qualified inverse floating rate), a fixed 

rate that reflects the yield that is reasonably expected for the Floating Rate Note. 

In general, any other Floating Rate Note that qualifies as a ‘variable rate debt instrument’ will be 

converted into an ‘equivalent’ fixed rate debt instrument for purposes of determining the amount and accrual 

of OID and qualified stated interest on the Floating Rate Note. Such a Floating Rate Note must be converted 

into an ‘equivalent’ fixed rate debt instrument by substituting any qualified floating rate or qualified inverse 

floating rate provided for under the terms of the Floating Rate Note with a fixed rate equal to the value of 

the qualified floating rate or qualified inverse floating rate, as the case may be, as of the Floating Rate Note’s 

issue date. Any objective rate (other than a qualified inverse floating rate) provided for under the terms of 

the Floating Rate Note is converted into a fixed rate that reflects the yield that is reasonably expected for 

the Floating Rate Note. In the case of a Floating Rate Note that qualifies as a ‘variable rate debt instrument’ 

and provides for stated interest at a fixed rate in addition to either one or more qualified floating rates or a 

qualified inverse floating rate, the fixed rate is initially converted into a qualified floating rate (or a qualified 

inverse floating rate, if the Floating Rate Note provides for a qualified inverse floating rate). Under these 

circumstances, the qualified floating rate or qualified inverse floating rate that replaces the fixed rate must 

be such that the fair market value of the Floating Rate Note as of the Floating Rate Note’s issue date is 

approximately the same as the fair market value of an otherwise identical debt instrument that provides for 

either the qualified floating rate or qualified inverse floating rate rather than the fixed rate. Subsequent to 

converting the fixed rate into either a qualified floating rate or a qualified inverse floating rate, the Floating 

Rate Note is then converted into an ‘equivalent’ fixed rate debt instrument in the manner described above. 

Once the Floating Rate Note is converted into an ‘equivalent’ fixed rate debt instrument pursuant to 

the foregoing rules, the amount of OID and qualified stated interest, if any, are determined for the ‘equivalent’ 

fixed rate debt instrument by applying the general OID rules to the ‘equivalent’ fixed rate debt instrument 

and a U.S. Holder of the Floating Rate Note will account for the OID and qualified stated interest as if the 

U.S. Holder held the ‘equivalent’ fixed rate debt instrument. In each accrual period, appropriate adjustments 

will be made to the amount of qualified stated interest or OID assumed to have been accrued or paid with 

respect to the ‘equivalent’ fixed rate debt instrument in the event that these amounts differ from the actual 

amount of interest accrued or paid on the Floating Rate Note during the accrual period. 

If a Floating Rate Note, such as a Note the payments on which are determined by reference to an index, 

does not qualify as a ‘variable rate debt instrument’, then the Floating Rate Note will be treated as a 

contingent payment debt obligation. The proper U.S. federal income tax treatment of Floating Rate Notes 

that are treated as contingent payment debt obligations will be more fully described in the applicable Final 

Terms. 

Short-Term Notes 

In general, an individual or other cash basis U.S. Holder of a Short-Term Note is not required to accrue 

OID (as specially defined below for the purposes of this paragraph) for U.S. federal income tax purposes 

unless it elects to do so (but may be required to include any stated interest in income as the interest is 

received). Accrual basis U.S. Holders and certain other U.S. Holders are required to accrue OID on Short- 

Term Notes on a straight-line basis or, if the U.S. Holder so elects, under the constant-yield method (based 

on daily compounding). In the case of a U.S. Holder not required and not electing to include OID in income 

currently, any gain realised on the sale or retirement of the Short-Term Note will be ordinary income to the 

extent of the OID accrued on a straight-line basis (unless an election is made to accrue the OID under the 

constant-yield method) through the date of sale or retirement. U.S. Holders who are not required and do 

140

not elect to accrue OID on Short-Term Notes will be required to defer deductions for interest on borrowings 

allocable to Short-Term Notes in an amount not exceeding the deferred income until the deferred income is 

realised. 

For purposes of determining the amount of OID subject to these rules, all interest payments on a Short- 

Term Note, are included in the Short-Term Note’s stated redemption price at maturity. A U.S. Holder may 

elect to determine OID on a Short-Term Note as if the Short-Term Note had been originally issued to the 

U.S. Holder at the U.S. Holder’s purchase price for the Short-Term Note. This election shall apply to all 

obligations with a maturity of one year or less acquired by the U.S. Holder on or after the first day of the first 

taxable year to which the election applies, and may not be revoked without the consent of the IRS. 

Fungible Issue 

Rabobank Nederland may, without the consent of the Noteholders, issue additional Notes with 

identical terms. These additional Notes, even if they are treated for non-tax purposes as part of the same 

series as the original Notes, in some cases may be treated as a separate series for U.S. federal income tax 

purposes. In such a case, the additional Notes may be considered to have been issued with OID even if the 

original Notes had no OID, or the additional Notes may have a greater amount of OID than the original Notes. 

These differences may affect the market value of the original Notes if the additional Notes are not otherwise 

distinguishable from the original Notes. 

Notes Purchased at a Premium 

A U.S. Holder that purchases a Note for an amount in excess of its principal amount, or for a Discount 

Note, its stated redemption price at maturity, may elect to treat the excess as ‘amortisable bond premium’, 

in which case the amount required to be included in the U.S. Holder’s income each year with respect to 

interest on the Note will be reduced by the amount of amortisable bond premium allocable (based on the 

Note’s yield to maturity) to that year. Any election to amortise bond premium shall apply to all bonds (other 

than bonds the interest on which is excludable from gross income for U.S. federal income tax purposes) 

held by the U.S. Holder at the beginning of the first taxable year to which the election applies or thereafter 

acquired by the U.S. Holder, and is irrevocable without the consent of the IRS. See also ‘— Original Issue 

Discount — Election to Treat All Interest as Original Issue Discount’. 

Purchase, Sale and Retirement of Notes 

A U.S. Holder’s tax basis in a Note will generally be its cost increased by the amount of any OID or 

market discount included in the U.S. Holder’s income with respect to the Note and the amount, if any, of 

income attributable to de minimis OID and de minimis market discount included in the U.S. Holder’s income 

with respect to the Note, and reduced by (i) the amount of any payments that are not qualified stated interest 

payments, and (ii) the amount of any amortisable bond premium applied to reduce interest on the Note. A 

U.S. Holder will generally recognise gain or loss on the sale or retirement of a Note equal to the difference 

between the amount realised on the sale or retirement and the tax basis of the Note. The amount realised 

does not include the amount attributable to accrued but unpaid interest, which will be taxable as interest 

income to the extent not previously included in income. Except to the extent described above under ‘Original 

Issue Discount — Market Discount’ or ‘Original Issue Discount — Short-Term Notes’ or attributable to 

changes in exchange rates (as discussed below), gain or loss recognised on the sale or retirement of a Note 

will be capital gain or loss and will be long-term capital gain or loss if the U.S. Holder’s holding period in the 

Notes exceeds one year. 

Gain or loss realised by a U.S. Holder on the sale or retirement of a Note generally will be U.S. source. 

Substitution of Issuer 

The terms of the Notes provide that, in certain circumstances (as described above under ‘Terms and 

Conditions of the Notes — Meeting of the Noteholders, Modifications and Substitutions’), the obligations of 

Rabobank Nederland under the Notes may be assumed by another entity. Any such assumption might be 

treated for U.S. federal income tax purposes as a deemed disposition of Notes by a U.S. Holder in exchange 

for new notes issued by the new obligor. As a result of this deemed disposition, a U.S. Holder could be 

required to recognise capital gain or loss for U.S. federal income tax purposes equal to the difference, if any, 

between the issue price of the new notes (as determined for U.S. federal income tax purposes) and the U.S. 

Holder’s tax basis in the Notes. U.S. Holders should consult their tax advisers concerning the U.S. federal 

income tax consequences to them of a change in obligor with respect to the Notes. 

141

Foreign Currency Notes 

Interest 

If an interest payment is denominated in, or determined by reference to, a foreign currency, the amount 

of income recognised by a cash basis U.S. Holder will be the U.S. Dollar value of the interest payment, based 

on the exchange rate in effect on the date of receipt, regardless of whether the payment is in fact converted 

into U.S. Dollars. 

An accrual basis U.S. Holder may determine the amount of income recognised with respect to an 

interest payment denominated in, or determined by reference to, a foreign currency in accordance with 

either of two methods. Under the first method, the amount of income accrued will be based on the average 

exchange rate in effect during the interest accrual period (or, in the case of an accrual period that spans two 

taxable years of a U.S. Holder, the part of the period within the taxable year). 

Under the second method, the U.S. Holder may elect to determine the amount of income accrued on 

the basis of the exchange rate in effect on the last day of the accrual period (or, in the case of an accrual 

period that spans two taxable years, the exchange rate in effect on the last day of the part of the period 

within the taxable year). Additionally, if a payment of interest is actually received within five business days of 

the last day of the accrual period, an electing accrual basis U.S. Holder may instead translate the accrued 

interest into U.S. Dollars at the exchange rate in effect on the day of actual receipt. Any such election will 

apply to all debt instruments held by the U.S. Holder at the beginning of the first taxable year to which the 

election applies or thereafter acquired by the U.S. Holder, and will be irrevocable without the consent of the 

IRS. 

Upon receipt of an interest payment (including a payment attributable to accrued but unpaid interest 

upon the sale or retirement of a Note) denominated in, or determined by reference to, a foreign currency, 

the U.S. Holder may recognise U.S. source exchange gain or loss (taxable as ordinary income or loss) equal 

to the difference between the amount received (translated into U.S. Dollars at the spot rate on the date of 

receipt) and the amount previously accrued, regardless of whether the payment is in fact converted into U.S. 

Dollars. 

OID 

OID for each accrual period on a Discount Note that is denominated in, or determined by reference to, 

a foreign currency, will be determined in the foreign currency and then translated into U.S. Dollars in the 

same manner as stated interest accrued by an accrual basis U.S. Holder, as described above. Upon receipt 

of an amount attributable to OID (whether in connection with a payment on the Note or a sale of the Note), 

a U.S. Holder may recognise U.S. source exchange gain or loss (taxable as ordinary income or loss) equal 

to the difference between the amount received (translated into U.S. Dollars at the spot rate on the date of 

receipt) and the amount previously accrued, regardless of whether the payment is in fact converted into U.S. 

Dollars. 

Market Discount 

Market Discount on a Note that is denominated in, or determined by reference to, a foreign currency, 

will be accrued in the foreign currency. If the U.S. Holder elects to include market discount in income 

currently, the accrued market discount will be translated into U.S. Dollars at the average exchange rate for 

the accrual period (or portion thereof within the U.S. Holder’s taxable year). Upon the receipt of an amount 

attributable to accrued market discount, the U.S. Holder may recognise U.S. source exchange gain or loss 

(which will be taxable as ordinary income or loss) determined in the same manner as for accrued interest or 

OID. A U.S. Holder that does not elect to include market discount in income currently will recognise, upon 

the disposition or maturity of the Note, the U.S. Dollar value of the amount accrued, calculated at the spot 

rate on that date, and no part of this accrued market discount will be treated as exchange gain or loss. 

Bond Premium 

Bond premium (including acquisition premium) on a Note that is denominated in, or determined by 

reference to, a foreign currency, will be computed in units of the foreign currency, and any such bond 

premium that is taken into account currently will reduce interest income in units of the foreign currency. On 

the date bond premium offsets interest income, a U.S. Holder may recognise U.S. source exchange gain 

or loss (taxable as ordinary income or loss) measured by the difference between the spot rate in effect on 

that date, and on the date the Notes were acquired by the U.S. Holder. A U.S. Holder that does not elect 

142

to take bond premium (other than acquisition premium) into account currently will recognise a market loss 

when the Note matures. 

Sale or Retirement 

As discussed above under ‘Purchase, Sale and Retirement of Notes’, a U.S. Holder will generally 

recognise gain or loss on the sale or retirement of a Note equal to the difference between the amount realised 

on the sale or retirement and its tax basis in the Note. A U.S. Holder’s tax basis in a Note that is denominated 

in a foreign currency will be determined by reference to the U.S. Dollar cost of the Note. The U.S. Dollar cost 

of a Note purchased with foreign currency will generally be the U.S. Dollar value of the purchase price on 

the date of purchase or, in the case of Notes traded on an established securities market, as defined in the 

applicable Treasury Regulations, that are purchased by a cash basis U.S. Holder (or an accrual basis U.S. 

Holder that so elects), on the settlement date for the purchase. 

The amount realised on a sale or retirement for an amount in foreign currency will be the U.S. Dollar 

value of this amount on the date of sale or retirement or, in the case of Notes traded on an established 

securities market, as defined in the applicable Treasury Regulations, sold by a cash basis U.S. Holder (or 

an accrual basis U.S. Holder that so elects), on the settlement date for the sale. Such an election by an 

accrual basis U.S. Holder must be applied consistently from year to year and cannot be revoked without 

the consent of the IRS. 

A U.S. Holder will recognise U.S. source exchange rate gain or loss (taxable as ordinary income or 

loss) on the sale or retirement of a Note equal to the difference, if any, between the U.S. Dollar values of the 

U.S. Holder’s purchase price for the Note (or, if less, the principal amount of the Note) (i) on the date of sale 

or retirement and (ii) the date on which the U.S. Holder acquired the Note. Any such exchange rate gain or 

loss will be realised only to the extent of total gain or loss realised on the sale or retirement. 

Disposition of Foreign Currency 

Foreign currency received as interest on a Note or on the sale or retirement of a Note will have a tax 

basis equal to its U.S. Dollar value at the time the interest is received or at the time of the sale or retirement. 

Foreign currency that is purchased will generally have a tax basis equal to the U.S. Dollar value of the foreign 

currency on the date of purchase. Any gain or loss recognised on a sale or other disposition of a foreign 

currency (including its use to purchase Notes or an exchange for U.S. Dollars) will be ordinary U.S. income 

or loss. 

Backup Withholding and Information Reporting 

In general, payments of interest and accrued OID on, and the proceeds of a sale, redemption or other 

disposition of, the Notes payable to a U.S. Holder by a U.S. paying agent or other U.S. intermediary will be 

reported to the IRS and to the U.S. Holder as may be required under applicable regulations. Backup 

withholding will apply to these payments and to accruals of OID if the U.S. Holder fails to provide an accurate 

taxpayer identification number or certification of exempt status or fails to report all interest and dividends 

required to be shown on its U.S. federal income tax returns. Certain U.S. Holders (including, among others, 

corporations) are not subject to backup withholding. U.S. Holders should consult their tax advisers as to 

their qualification for exemption from backup withholding and the procedure for obtaining an exemption. 

Reportable Transactions 

A U.S. taxpayer that participates in a ‘reportable transaction’ will be required to disclose this 

participation to the IRS. The scope and application of these rules is not entirely clear. A U.S. Holder may be 

required to treat a foreign currency exchange loss from the Notes as a reportable transaction if the loss 

exceeds U.S.$ 50,000 in a single taxable year, if the U.S. Holder is an individual or trust, or higher amounts 

for other non-individual U.S. Holders. In the event the acquisition, holding or disposition of Notes constitutes 

participation in a ‘reportable transaction’ for purposes of these rules, a U.S. Holder will be required to 

disclose its investment by filing Form 8886 with the IRS. Pursuant to U.S. tax legislation enacted in 2004, a 

penalty the amount of U.S.$10,000 in the case of a natural person and U.S.$50,000 in all other cases is 

generally imposed on any taxpayer that fails to timely file an information return with the IRS with respect to 

a transaction resulting in a loss that is treated as a reportable transaction. Accordingl, if a U.S. Holder realizes 

a loass on any Note (or, possibly, aggregate losses from the Notes) satisfying the monetary thresholds 

discussed above, the U.S. Holder could be required to file an information return with the IRS, and failure to 

do so may subject the U.S. Holder to the penalties descibed above. In addition, the Issuer and its advisers 

143

may also be required to disclose the transaction to the IRS: and to maintain a list of U.S. Holders, and to 

furnish this list and certain other information to the IRS upon written request. Prospective purchasers are 

urged to consult their tax advisers regarding the application of these rules to the acquisition, holding or 

disposition of Notes. 

144

TRANSFER RESTRICTIONS 

Rule 144A Notes 

Each purchaser of Restricted Notes issued by Rabobank Nederland pursuant to Rule 144A, by 

accepting delivery of this Offering Circular, will be deemed to have represented, agreed and acknowledged 

that: 

(1) It is (a) a qualified institutional buyer within the meaning of Rule 144A, (b) acquiring such Notes for its 

own account or for the account of a qualified institutional buyer and (c) aware, and each beneficial 

owner of such Notes has been advised, that the sale of such Notes to it is being made in reliance on 

Rule 144A. 

(2) It understands that such Notes have not been and will not be registered under the Securities Act and 

may not be offered, sold, pledged or otherwise transferred except (a) in accordance with Rule 144A 

to a person that it and any person acting on its behalf reasonably believe is a qualified institutional buyer 

purchasing for its own account or for the account of a qualified institutional buyer, (b) in an offshore 

transaction in accordance with Rule 903 or Rule 904 of Regulation S or (c) pursuant to an exemption 

from registration under the Securities Act provided by Rule 144 thereunder (if available), in each case 

in accordance with any applicable securities laws of any State of the United States. 

(3) It understands that such Notes, unless otherwise determined by the Issuer in accordance with 

applicable law, will bear a legend to the following effect: 

THIS NOTE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE U.S. SECURITIES ACT 

OF 1933 (THE ‘SECURITIES ACT’) OR WITH ANY SECURITIES REGULATORY AUTHORITY OF ANY 

STATE OR OTHER JURISDICTION OF THE UNITED STATES AND MAY NOT BE OFFERED, SOLD, 

PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (1) IN ACCORDANCE WITH RULE 144A 

UNDER THE SECURITIES ACT TO A PERSON THAT THE HOLDER AND ANY PERSON ACTING ON 

ITS BEHALF REASONABLY BELIEVE IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE 

MEANING OF RULE 144A PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A 

QUALIFIED INSTITUTIONAL BUYER, (2) IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH 

RULE 903 OR RULE 904 OF REGULATION S UNDER THE SECURITIES ACT OR (3) PURSUANT TO 

AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 

THEREUNDER (IF AVAILABLE), IN EACH CASE IN ACCORDANCE WITH ANY APPLICABLE 

SECURITIES LAWS OF ANY STATE OF THE UNITED STATES. NO REPRESENTATION CAN BE MADE 

AS TO THE AVAILABILITY OF THE EXEMPTION PROVIDED BY RULE 144 UNDER THE SECURITIES 

ACT FOR RESALES OF THIS NOTE. 

(4) Rabobank Nederland, the Registrar, the Dealers and their affiliates, and others will rely upon the truth 

and accuracy of the foregoing acknowledgments, representations and agreements. If it is acquiring 

any Notes for the account of one or more qualified institutional buyers, it represents that it has sole 

investment discretion with respect to each such account and that it has full power to make the 

foregoing acknowledgments, representations and agreements on behalf of each such account. 

(5) It understands that the Notes offered in reliance on Rule 144A will be represented by one or more 

Restricted Global Certificates. Before any interest in a Restricted Global Certificate may be offered, 

sold, pledged or otherwise transferred to a person who takes delivery in the form of an interest in an 

Unrestricted Global Certificate, it will be required to provide a Transfer Agent with a written certification 

(in the form provided in the Agency Agreement) as to compliance with applicable securities laws. 

(6) Distribution of this Offering Circular, or disclosure of any of its contents to any person other than such 

purchaser and those persons, if any, retained to advise such purchaser with respect thereto is 

unauthorised, and any disclosure of any of its contents, without the prior written consent of the Issuer, 

is prohibited. 

Prospective purchasers are hereby notified that sellers of the Notes may be relying on the 

exemption from the provisions of Section 5 of the Securities Act provided by Rule 144A. 

Regulation S Notes 

Each purchaser of Registered Notes outside the United States pursuant to Regulation S and each 

subsequent purchaser of such Notes in resales prior to the expiration of the distribution compliance period 

(as used in ‘Plan of Distribution’), by accepting delivery of this Offering Circular and the Notes, will be 

deemed to have represented, agreed and acknowledged that: 

145

(1) It is, or at the time Notes are purchased will be, the beneficial owner of such Notes and (a) it is not a 

U.S. person and it is located outside the United States (within the meaning of Regulation S) and (b) it 

is not an affiliate of the Issuer or a person acting on behalf of such an affiliate. 

(2) It understands that such Notes have not been and will not be registered under the Securities Act and 

that, prior to the expiration of the distribution compliance period, it will not offer, sell, pledge or 

otherwise transfer such Notes except in an offshore transaction in accordance with Rule 903 or Rule 

904 of Regulation S, or in the case of Notes issued by Rabobank Nederland, in accordance with Rule 

144A under the Securities Act to a person that it and any person acting on its behalf reasonably believe 

is a qualified institutional buyer purchasing for its own account or the account of a qualified institutional 

buyer in each case in accordance with any applicable securities laws of any State of the United States. 

(3) The Issuer, the Registrar, the Dealers and their affiliates, and others will rely upon the truth and accuracy 

of the foregoing acknowledgments, representations and agreements. 

(4) It understands that the Notes offered in reliance on Regulation S will be represented by one or more 

Unrestricted Global Certificates. Prior to the expiration of the distribution compliance period, before 

any interest in an Unrestricted Global Certificate representing Notes issued by Rabobank Nederland 

may be offered, sold, pledged or otherwise transferred to a person who takes delivery in the form of 

an interest in a Restricted Global Certificate, it will be required to provide a Transfer Agent with a written 

certification (in the form provided in the Agency Agreement) as to compliance with applicable securities 

laws. 

146

PLAN OF DISTRIBUTION 

Summary of Distribution Agreement 

Subject to the terms and on the conditions contained in an amended and restated Distribution 

Agreement dated May 31, 2006 (the ‘Distribution Agreement’) as further amended or supplemented as at 

the Issue Date, between the Issuer, the Permanent Dealers (as defined in the Distribution Agreement) and 

the Arranger, the Notes will be offered by the Issuer to the Permanent Dealers. However, the Issuer has 

reserved the right to sell Notes directly on its own behalf to Dealers that are not Permanent Dealers. The 

Notes may be resold at prevailing market prices, or at prices related thereto, at the time of such resale, as 

determined by the relevant Dealer. The Notes may also be sold by the Issuer through the Dealers, acting as 

agents of the Issuer. The Distribution Agreement also provides for Notes to be issued in syndicated Tranches 

that are jointly and severally underwritten by two or more Dealers. 

The Issuer will pay each relevant Dealer a commission as agreed between them in respect of Notes 

subscribed by it. The Issuer has agreed to reimburse the Arranger for its expenses incurred in connection 

with the establishment of the Programme and the Dealers for certain of their activities in connection with the 

Programme. The commissions in respect of an issue of Notes on a syndicated basis will be stated in the 


The Issuer has agreed to indemnify the Dealers in respect of such issue of Notes against certain 

liabilities in connection with the offer and sale of such Notes, including liability under the Securities Act, and 

to contribute for payments that such Dealers may be required to make in respect thereof. The Distribution 

Agreement entitles the Dealers to terminate any agreement that they make to purchase Notes in certain 

circumstances prior to payment for such Notes being made to the Issuer. 

Selling Restrictions 

General 

These selling restrictions may be modified by the agreement of the Issuer and the Dealers following a 

change in a relevant law, regulation or directive. Any such modification will be set out in the Final Terms 

issued in respect of the issue of Notes to which it relates or in a supplement to this Offering Circular. 

No action has been taken in any jurisdiction that would permit a public offering of any of the Notes, or 

possession or distribution of the Offering Circular or any other offering material or any Final Terms, in any 

country or jurisdiction where action for that purpose is required. 

Each Dealer has agreed that it will comply with all relevant laws, regulations and directives in each 

jurisdiction in which it purchases, offers, sells or delivers Notes, or has in its possession or distributes the 

Offering Circular, any other offering material or any Final Terms. 

United States 

The Notes have not been and will not be registered under the Securities Act and may not be offered 

or sold within the United States or to, or for the account or benefit of, U.S. persons except in certain 

transactions exempt from the registration requirements of the Securities Act. Terms used in this paragraph 

have the meanings given to them by Regulation S under the Securities Act. 

Bearer Notes having a maturity of more than one year are subject to U.S. tax law requirements and 

may not be offered, sold or delivered within the United States or its possessions or to a United States person, 

except in certain transactions permitted by U.S. tax regulations. Terms used in this paragraph have the 

meanings given to them by the U.S. Internal Revenue Code and regulations thereunder. 

Each Dealer has represented and agreed that, except as permitted by the Distribution Agreement, it 

will not offer, sell or deliver the Notes of any identifiable Tranche, (i) as part of their distribution at any time or 

(ii) otherwise until 40 days after completion of the distribution of such Tranche as determined, and certified 

to the Issuer, by the relevant Agent, or in the case of Notes issued on a syndicated basis, the Lead Manager, 

within the United States or to, or for the account or benefit of, U.S. persons, and only in accordance with 

Rule 903 of Regulation S or (in the case of Notes issued by Rabobank Nederland) Rule 144A under the 

Securities Act. Each Dealer has further agreed that it will have sent to each dealer to which it sells Notes 

(other than a sale of Notes issued by Rabobank Nederland pursuant to Rule 144A) during the distribution 

compliance period a confirmation or other notice setting forth the restrictions on offers and sales of the 

147

Notes within the United States or to, or for the account or benefit of, U.S. persons. Terms used in this 

paragraph have the meanings given to them by Regulation S under the Securities Act. 

In addition, until 40 days after the commencement of an offering of Notes, an offer or sale of Notes 

within the United States by any dealer that is not participating in the offering may violate the registration 

requirements of the Securities Act if such offer or sale is made otherwise than in accordance with Rule 144A. 

The Distribution Agreement provides that the Dealers may directly or through their respective U.S. 

broker-dealer affiliates arrange for the offer and resale of Notes issued by Rabobank Nederland within the 

United States only to qualified institutional buyers pursuant to Rule 144A. 

Each purchaser of Restricted Notes that have not been registered under the Securities Act is hereby 

notified that the offer and sale of such Restricted Notes to it is being made in reliance upon the exemption 

from the registration requirements of the Securities Act provided by Rule 144A. Each purchaser of Restricted 

Notes pursuant to Rule 144A, by accepting delivery of this Offering Circular, will be deemed to have 

represented and agreed that it is a qualified institutional buyer, that it is aware that the sale to it is being 

made in reliance on Rule 144A and that it is acquiring the Notes for its own account or for the account of a 

qualified institutional buyer. See ‘Transfer Restrictions’. 

European Economic Area 

In relation to each Member State of the European Economic Area which has implemented the 

Prospectus Directive (each, a ‘Relevant Member State’), each Dealer has represented, warranted and 

agreed, and each further Dealer appointed under the Programme will be required to represent, warrant and 

agree, that with effect from and including the date on which the Prospectus Directive is implemented in that 

Member State (the ‘Relevant Implementation Date’) it has not made and will not make an offer of Notes to 

the public (where the Notes have a denomination of less than €50,000 (or its equivalent in any other 

currency as at the date of issue of the Notes)) in that Relevant Member State, except that it may, with effect 

from and including the Relevant Implementation Date, make an offer of Notes to the public in that Relevant 

Member State: 

(a) in the period beginning on the date of publication of a prospectus in relation to such offer which has 

been approved by the competent authority in that Relevant Member State or, where appropriate, 

approved in another Relevant Member State and notified to the competent authority in that Relevant 

Member State, or final terms in relation to such offer, as applicable, all in accordance with the 

Prospectus Directive and ending on the date specified in such prospectus or final terms, as applicable; 

(b) at any time to legal entities which are authorised or regulated to operate in the financial markets or, if 

not so authorised or regulated, whose corporate purpose is solely to invest in securities; 

(c) at any time to any legal entity which has two or more of (1) an average of at least 250 employees during 

the last financial year; (2) a total balance sheet of more than €43,000,000 and (3) an annual turnover 

of more than €50,000,000, as shown in its last annual or consolidated accounts; 

(d) to fewer than 100 natural or legal persons (other than qualified investors as defined in the Prospectus 

Directive) subject to obtaining the prior consent of the relevant Dealer or Dealers nominated by the 

Issuer for any such offer; or 

(e) at any time in any other circumstances falling within Article 3(2) of the Prospectus Directive, 

provided that no such offer of Notes shall result in a requirement for the publication by the Issuer or any 

Dealer of a prospectus pursuant to Article 3 of the Prospectus Directive. 

For the purposes of this provision, the expression an ‘offer of Notes to the public’ in relation to any 

Notes in any Relevant Member State means the communication in any form and by any means of sufficient 

information on the terms of the offer and the Notes to be offered so as to enable an investor to decide to 

purchase or subscribe the Notes, as the same may be varied in that Member State by any measure 

implementing the Prospectus Directive in that Member State and the expression ‘Prospectus Directive’ 

means Directive 2003/71/EC and includes any relevant implementing measure in each Relevant Member 

State. 

United Kingdom 

Each Dealer has represented, warranted and agreed, and each further Dealer appointed under the 

Programme will be required to represent, warrant and agree that: 

148

(1) in relation to any Notes which have a maturity of less than one year, (a) it is a person whose ordinary 

activities involve it in acquiring, holding, managing or disposing of investments (as principal or agent) 

for the purposes of its business and (b) it has not offered or sold and will not offer or sell any Notes 

other than to persons whose ordinary activities involve them in acquiring, holding, managing or 

disposing of investments (as principal or agent) for the purposes of their businesses or who it is 

reasonable to expect will acquire, hold, manage or dispose of investments (as principal or agent) for 

the purposes of their businesses where the issue of the Notes would otherwise constitute a 

contravention of section 19 of the Financial Services and Markets Act 2000 (the ‘FSMA’) by the Issuer; 

(2) it has only communicated or caused to be communicated and will only communicate or cause to be 

communicated any invitation or inducement to engage in investment activity (within the meaning of 

section 21 of the FSMA) received by it in connection with the issue or sale of any Notes in 

circumstances in which section 21(1) of the FSMA does not apply to the Issuer; and 

(3) it has complied and will comply with all applicable provisions of the FSMA with respect to anything 

done by it in relation to such Notes in, from or otherwise involving the United Kingdom. 

The Netherlands 

Pursuant to the Netherlands Savings Certificates Act (‘Wet inzake spaarbewijzen’ or the ‘Savings 

Certificates Act’) of May 21, 1985, any transfer or acceptance of Notes which fall within the definition of 

savings certificates (‘spaarbewijzen’) in the Savings Certificates Act is prohibited unless the transfer and 

acceptance is done through the mediation of either the Issuer or a member of Euronext Amsterdam N.V. 

(‘Member’). The aforesaid prohibition does not apply (i) to a transfer and acceptance by natural persons not 

acting in the course of their business of profession and (ii) to the issue of Notes qualifying as savings 

certificates to the first holders thereof. In addition, pursuant to the Savings Certificates Act, certain 

identification requirements in relation to the issue of, transfer of or payment on Notes qualifying as savings 

certificates have to be complied with. The Savings Certificates Act is not applicable to the issue and trading 

of Notes qualifying as savings certificates, if such Notes are physically issued outside the Netherlands and 

are not distributed within the Netherlands in the course of primary trading immediately thereafter. 

Each Dealer has represented, warranted and agreed and each further Dealer appointed under the 

Programme will be required to represent, warrant and agree, that Notes (including rights representing an 

interest in a global Note) with a maturity of less than 12 months that qualify as money market instruments 

may only be offered, directly or indirectly, in or from The Netherlands (i) if they each have a minimum 

denomination (or minimum aggregate purchase price) of €50,000 or the equivalent thereof in another 

currency, or (ii) solely to persons who trade or invest in securities in the conduct of their profession or 

business (which includes banks, securities firms, investment institutions, insurance companies, pension 

funds, other institutional investors, and finance companies and large enterprises which as an ancillary 

activity regularly invest in securities), provided that it is made clear both upon making the offer and in any 

documents or advertisements in which a forthcoming offering of the Notes is publicly announced (whether 

electronically or otherwise) that such offer is and will be exclusively made to professional investors, or (iii) in 

circumstances where another exception to or exemption or dispensation from the prohibition of section 3 

subsection 4 of the Dutch Act on the Supervision of the Securities Trade 1995 (Wet toezicht effectenverkeer 

1995) applies. 

Australia 

This Offering Circular has not and no prospectus or other disclosure document in relation to the 

Programme or the Notes has been lodged with the Australian Securities and Investments Commission. Each 

Dealer represents and agrees and each further Dealer appointed under the Programme will be required to 

represent and agree that, and unless the relevant Final Terms or supplement to this Offering Circular 

otherwise provides, it: 

(a) has not offered or invited applications, and will not offer or invite applications, for the issue, sale or 

purchase of the Notes in Australia (including an offer or invitation which is received by a person in 

Australia) and 

(b) has not distributed or published, and will not distribute or publish, the Offering Circular or any other 

offering material or advertisement relating to the Notes in Australia, 

unless (i) the minimum aggregate consideration payable by each offeree is at least AUD 500,000 

(disregarding moneys lent by the offeror or its associates) or the offer or invitation otherwise does not require 

149

disclosure to investors in accordance with Part 6D.2 of the Corporations Act 2001 (Cth), and (ii) such action 

complied with all applicable laws and regulations. 

In addition, each Dealer agrees that, in connection with the primary distribution of the Notes, it will not 

sell Notes to any person who has been notified in writing by Rabobank Australia Branch to be an associate 

of Rabobank Australia Branch, the acquisition of a Note by whom would cause Rabobank Australia Branch 

to fail to satisfy the public offer test in section 128F of the Australian Tax Act as a result of section 128F(5) 

of the Income Tax Assessment Act 1936 of Australia. 

Singapore 

This Offering Circular has not been registered as a prospectus with the Monetary Authority of 

Singapore. Accordingly, each Dealer has represented and agreed and each further Dealer appointed under 

the Programme will be required to represent and agree that it has not offered or sold any Notes or caused 

the Notes to be made the subject of an invitation for subscription or purchase nor will it offer or sell the Notes 

or cause the Notes to be made the subject of an invitation for subscription or purchase, nor has it circulated 

or distributed nor will it circulate or distribute this Offering Circular or any other document or material in 

connection with the offer or sale, or invitation for subscription or purchase, of the Notes, whether directly or 

indirectly, to persons in Singapore other than (i) to an institutional investor under Section 274 of the Securities 

and Futures Act, Chapter 289 of Singapore (the ‘SFA’), (ii) to a relevant person pursuant to Section 275(1), 

or any person pursuant to Section 275(1A), and in accordance with the conditions, specified in Section 275 

of the SFA or (iii) otherwise pursuant to, and in accordance with the conditions of, any other applicable 

provision of the SFA. 

Where the Notes are subscribed or purchased under Section 275 of the SFA by a relevant person 

which is: 

(a) a corporation (which is not an accredited investor (as defined in Section 4A of the SFA)) the sole 

business of which is to hold investments and the entire share capital of which is owned by one or more 

individuals, each of whom is an accredited investor; or 

(b) a trust (where the trustee is not an accredited investor) whose sole purpose is to hold investments and 

each beneficiary of the trust is an individual who is an accredited investor, 

shares, debentures and units of shares and debentures of that corporation or the beneficiaries’ rights and 

interest (howsoever described) in that trust shall not be transferred within six months after that corporation 

or that trust has acquired the Notes pursuant to an offer made under Section 275 of the SFA except: 

(1) to an institutional investor (for corporations, under Section 274 of the SFA) or to a relevant person 

defined in Section 275(2) of the SFA, or to any person pursuant to an offer that is made on terms that 

such shares, debentures and units of shares and debentures of that corporation or such rights and 

interest in that trust are acquired at a consideration of not less than S$200,000 (or its equivalent in a 

foreign currency) for each transaction, whether such amount is to be paid for in cash or by exchange 

of securities or other assets, and further for corporations, in accordance with the conditions specified 

in Section 275 of the SFA; 

(2) where no consideration is or will be given for the transfer; or 

(3) where the transfer is by operation of law. 

Republic of France 

Each Dealer has represented, warranted and agreed that: 

(i) it has only made and will only make an offer of Notes to the public in France (i) in the case of a 

prospectus in relation to those Notes having been approved by the Autorité des marchés financiers 

(‘AFM’), on or after the date of its publication or, (ii) in the case of a prospectus having been approved 

by the competent authority of another Member State of the European Economic Area which has 

implemented the Prospectus Directive, in the period beginning on the date of notification of such 

approval to the AMF, all in accordance with articles L.412-1 and L.621-8 of the French Code monétaire 

et financier and the Règlement général of the AMF and ending at the latest on the date which is 12 

months after the date of the approval of the prospectus; or 

(ii) it has only made and will only make an offer of Notes to the public in France and/or it has only required 

and will only require the admission to trading on Euronext Paris in circumstances which do not require 

150

(iii) 

the publication by the offeror of a prospectus pursuant to articles L.411-2 and L.412-1 of the French 

Code monétaire et financier; and 

it has not offered or sold and will not offer or sell, directly or indirectly, any Notes to the public in France 

and it has not distributed or caused to be distributed and will not distribute or cause to be distributed 

to the public in France, this Prospectus, the relevant Final Terms or any other offering material relating 

to the Notes and such offers, sales and distributions have been and will be made in France only to (a) 

providers of investment services relating to portfolio management for the account of third parties 

and/or (b) qualified investors (investisseurs qualifiés), all as defined in, and in accordance with, articles 

L.411-1, L.411-2 and D.411-1 of the French Code monétaire et financier. 

This Prospectus has not been submitted to the clearance procedures of the AMF. 

Japan 

The Notes have not been and will not be registered under the Securities and Exchange Law of Japan 

(the ‘Securities and Exchange Law’). Accordingly, each of the Dealers has represented, warranted and 

agreed and each further Dealer appointed under the Programme will be required to represent, warrant and 

agree that it has not, directly or indirectly, offered or sold and will not, directly or indirectly, offer or sell any 

Notes in Japan or to, or for the benefit of, a resident of Japan or to others for re-offering or re-sale, directly 

or indirectly, in Japan or to, or for the benefit of, any resident of Japan except pursuant to an exemption 

from the registration requirements of, and otherwise in compliance with, the Securities and Exchange Law 

and other relevant laws and regulations of Japan. As used in this paragraph, ‘resident of Japan’ means any 

person resident in Japan, including any corporation or other entity organised under the laws of Japan. 

151

GENERAL INFORMATION 

1. Application has been made to the AFM to approve this document as a base prospectus for the 

purposes of Article 5.4 of the Prospectus Directive. Application has also be made for Notes issued under 

the Programme to be admitted to trading on Eurolist by Euronext Amsterdam N.V., and to be admitted to 

the official list and traded on the regulated market, the ‘Bourse de Luxembourg’ of the Luxembourg Stock 

Exchange. In connection with the application to list the Notes under the Programme on the ‘Bourse de 

Luxembourg’ of the Luxembourg Stock Exchange a legal notice relating to the issue of the Notes and a 

copy of the Articles of Association of Rabobank Nederland will be deposited with the Registre de Commerce 

et des Sociétés à Luxembourg where such documents may be examined and copies may be obtained. The 

Luxembourg Stock Exchange has allocated to the Programme the number 12077 for listing purposes. 

2. The Issuer has obtained all necessary consents, approvals and authorisations in connection with the 

issue and performance of the Notes. The update and amendment to the Programme was authorised by 

Rabobank Nederland by a resolution of the Executive Board of Rabobank Nederland passed on November 

8, 2005, by a resolution of the Supervisory Board passed on December 1, 2005 and by a Secretary’s 

Certificate dated May 29, 2006. 

3. Except as disclosed under ‘Recent developments’ on page 69 of this Offering Circular, there has been 

no significant change in the financial or trading position of the Issuer or of the Group, and there has been 

no material adverse change in the financial position or prospects of the Issuer or of the Group, since 

December 31, 2005. 

4. Neither the Issuer nor any member, subsidiary or affiliate of the Group is, or has been during the 12 

months preceding the date of this Offering Circular, involved in any governmental, legal or arbitration 

proceedings which may have, or have had in the recent past, significant effects on the Issuer’s and/or 

Rabobank Group’s financial position or profitability, nor so far as the Issuer is aware are any such 

proceedings involving any of them pending or threatened. 

5. Each Bearer Note, Receipt, Coupon and Talon will bear the following legend: ‘Any United States person 

who holds this obligation will be subject to limitations under the United States income tax laws, including 

the limitations provided in Sections 165(j) and 1287(a) of the Internal Revenue Code’. 

6. The Notes have been accepted for clearance through the Euroclear and Clearstream, Luxembourg 

systems. In addition, Rabobank Nederland will make an application with respect to any Restricted Notes of 

a Registered Series to be accepted for trading in book-entry form by DTC. Acceptance by DTC of Restricted 

Notes of each Tranche of a Registered Series issued by Rabobank Nederland will be confirmed in the 

applicable Final Terms. The Common Code, the International Securities Identification Number (ISIN), the 

Committee on the Uniform Security Identification Procedure (CUSIP) number and (where applicable) the 

identification number for any other relevant clearing system for each Series of Notes will be set out in the 


The address of Euroclear is 1 Boulevard du Roi Albert II, B-1210 Brussels, Belgium, the address of 

Clearstream, Luxembourg is 42 Avenue JF Kennedy L-1855 Luxembourg and the address of DTC is 55 

Water Street, New York, New York 10041. The address of any alternative clearing system will be specified 

in the applicable Final Terms. 

7. The issue price and the amount of the relevant Notes will be determined based on the prevailing market 

conditions. The Bank does not intend to provide any post-issuance information in relation to any issues of 

Notes. 

8. So long as any of the Notes are outstanding the following documents will be available, during usual 

business hours on any weekday (Saturdays and public holidays excepted), for inspection at the office of the 

Paying Agent in Luxembourg: 

(i) the Distribution Agreement (as amended and supplemented from time to time); 

(ii) the Agency Agreement (as amended and supplemented from time to time) relating to the 

Programme (which includes the form of the Global Notes, the Definitive Notes, the Certificates 

and the Coupons, Talons and Receipts relating to Bearer Notes); 

(iii) each set of Final Terms for Notes that are listed on Euronext Amsterdam or the Luxembourg Stock 

Exchange; and 

(iv) the Articles of Association of Rabobank Nederland. 

152

9. For the period of 12 months following the date of this Offering Circular, copies of the following 

documents will be available, free of charge during usual business hours on any weekday (Saturdays and 

public holidays excepted), at the office of the Fiscal Agent and the Paying Agents in Luxembourg and the 

Netherlands: 

(i) the Distribution Agreement (as amended and supplemented from time to time); 

(ii) the Agency Agreement (as amended and supplemented from time to time) (which includes the 

form of the Global Notes, the Registered Notes, the Definitive Notes, and the Coupons, Talons 

and Receipts relating to Definitive Notes) and the Covenant (as amended and supplemented from 

time to time); 

(iii) the Articles of Association of the Issuer; 

(iv) a copy of the latest Offering Circular (together with any supplement thereto); 

(v) the audited and consolidated financial statements of the Issuer and Rabobank Group for the 

years ended December 31, 2003, December 31, 2004 and December 31, 2005; 

(vi) a copy of the ISDA Definitions; and 

(vii) the most recently published annual reports of Rabobank Group. 

10. Ernst & Young Accountants, of which the ‘Register accountants’ are members of the Netherlands 

Institute for Register accountants, has audited, and issued unqualified audit reports, on the financial 

statements of Rabobank Nederland for the years ended December 31, 2005, 2004 and 2003. Ernst & 

Young has given its consent to the inclusion in this Offering Circular of its audit report for the year ended 

December 31, 2005 as included on page F92 hereof, and of its audit reports for the years ended December 

31, 2004 and 2003 as incorporated by reference herein in the form and context in which they appear. Ernst 

& Young has no interest in Rabobank Nederland. 

153

FORM OF FINAL TERMS 

COÖPERATIEVE CENTRALE RAIFFEISEN-BOERENLEENBANK B.A. 

(RABOBANK NEDERLAND) 



(RABOBANK NEDERLAND) AUSTRALIA BRANCH 

(Australian Business Number 70 003 917 655) 



(RABOBANK NEDERLAND) SINGAPORE BRANCH 

(Singapore Company Registration Number F03634W) 


Euro 80,000,000,000 


Due from seven days to perpetuity 

SERIES NO: [•] 

TRANCHE NO: [•] 

[•] Notes due [•] 

Issue Price: [•] 

The date of these Final Terms is [•] 

PART A – CONTRACTUAL TERMS 

Terms used herein shall be deemed to be defined as such for the purposes of the Conditions set forth 

in the Offering Circular (the ‘Offering Circular’) dated May 31, 2006 [and the supplemental Offering Circular 

dated [•]] which [together] constitute[s] a base prospectus for the purposes of the Prospectus Directive 

(Directive 2003/71/EC) (the ‘Prospectus Directive’). This document constitutes the Final Terms of the 

Notes described herein for the purposes of Article 5.4 of the Prospectus Directive and must be read in 

conjunction with the Offering Circular, as so supplemented. Full information on the Issuer and the offer of 

the Notes is only available on the basis of the combination of these Final Terms and the Offering Circular. 

The Notes will be issued on the terms of these Final Terms read together with the Offering Circular. Each 

Issuer accepts responsibility for the information contained in these Final Terms which, when read together 

with the Offering Circular, contains all information that is material in the context of the issue of the Notes. 

The Offering Circular is available for viewing at, and copies may be obtained from, Rabobank Nederland at 

Croeselaan 18, 3521 CB Utrecht, the Netherlands and the principal office in England of the Arranger and of 

the Paying Agent in Luxembourg and Amsterdam and www.bourse.lu. 

[The following alternative language applies if the first tranche of an issue which is being increased was issued 

under an Offering Circular with an earlier date.] 

Terms used herein shall be deemed to be defined as such for the purposes of the Conditions (the 

‘Conditions’) set forth in Offering Circular dated May 31, 2006 [and the supplemental Offering Circular dated 

[•]]. This document constitutes the Final Terms of the Notes described herein for the purposes of Article 5.4 

of the Prospectus Directive (Directive 2003/71/EC) (the ‘Prospectus Directive’) and must be read in 

conjunction with the Offering Circular dated [current date] [and the supplemental Offering Circular dated [•]], 

which [together] constitute[s] a base prospectus for the purposes of the Prospectus Directive, save in 

respect of the Conditions which are extracted from the Offering Circular dated [original date] [and the 

supplemental Offering Circular dated [•]] and are attached hereto. Full information on the Issuer and the offer 

of the Notes is only available on the basis of the combination of these Final Terms and the Offering Circulars 

dated [original date] and [current date] [and the supplemental Offering Circulars dated [•] and [•]]. The 

Offering Circulars [and the supplemental Offering Circulars] are available for viewing at, and copies may be 

obtained from Rabobank Nederland at Croeselaan 18, 3521 CB Utrecht, the Netherlands and the principal 

office in England of the Arranger and of the Paying Agent in Luxembourg and Amsterdam and 

www.bourse.lu. 

154

[The following alternative language applies if Notes are issued pursuant to Rule 144A.] 

THE NOTES REFERRED TO HEREIN THAT ARE REPRESENTED BY A RESTRICTED GLOBAL 

CERTIFICATE HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE U.S. SECURITIES ACT OF 

1933 (THE ‘SECURITIES ACT’) OR WITH ANY SECURITIES REGULATORY AUTHORITY OF ANY STATE 

OR OTHER JURISDICTION OF THE UNITED STATES AND MAY NOT BE OFFERED, SOLD, PLEDGED OR 

OTHERWISE TRANSFERRED EXCEPT (1) IN ACCORDANCE WITH RULE 144A UNDER THE SECURITIES 

ACT TO A PERSON THAT THE HOLDER AND ANY PERSON ACTING ON ITS BEHALF REASONABLY 

BELIEVE IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A PURCHASING 

FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER, (2) IN AN 

OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 903 OR RULE 904 OF REGULATION S UNDER 

THE SECURITIES ACT OR (3) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE 

SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE), IN EACH CASE IN 

ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES. 

NO REPRESENTATION CAN BE MADE AS TO THE AVAILABILITY OF THE EXEMPTION PROVIDED BY 

RULE 144 UNDER THE SECURITIES ACT FOR RESALES OF NOTES REPRESENTED BY A RESTRICTED 

GLOBAL CERTIFICATE] 

[A Dutch language summary of the principal terms of the Notes is contained in the Schedule hereto.] 

[Include whichever of the following apply or specify as ‘Not Applicable’. Note that the numbering should 

remain as set out below, even if ‘Not Applicable’ is indicated for individual paragraphs or sub-paragraphs. 

Italics denote guidance for completing the Final Terms.] 

[When completing any final terms, or adding any other final terms or information, consideration should be 

given as to whether such terms or information constitute ‘significant new factors’ and consequently trigger 

the need for a supplement to the Prospectus under Article 16 of the Prospectus Directive.] 

1 Issuer: [Coöperatieve Centrale Raiffeisen-Boerenleenbank B.A. 

(Rabobank Nederland)/ 


(Rabobank Nederland) Australia Branch/ 


(Rabobank Nederland) Singapore Branch] 

2 (i) Series Number: [•] 

(ii) Tranche Number: [•] 

[(If fungible with an existing Series, details of 

that Series, including the date on which the 

Notes become fungible.)] 

3 Specified Currency or Currencies: [•] 

4 Aggregate Nominal Amount: 

(i) Series: [•] 

(ii) Tranche: [•] 

5 Issue Price: [•] per cent. of the Aggregate Nominal Amount [plus 

accrued interest from [insert date] (if applicable)] 

6 Specified Denominations: 1 [•] 

1) Notes (including Notes denominated in sterling) in respect of which the issue proceeds are to be accepted by the Issuer in the United Kingdom or 

whose issue otherwise constitutes a contravention of section 19 of the FSMA and which have a maturity of less than one year must have a minimum 

redemption value of £100,000 (or its equivalent in other currencies). 

155

7 (i) Issue Date: [•] 

(ii) Interest Commencement Date 

(if different from the Issue Date): 

[[•]/Not Applicable] 

8 Maturity Date: [specify date (or indicate if Notes are perpetual) or (for 

Floating Rate Notes) Interest Payment Date falling in or 

nearest to the relevant month and year] 

9 Domestic Note: (if Domestic Note, there will 

be no gross-up for withholding tax) 

[No/Yes] 

10 Interest Basis: [[•] per cent. Fixed Rate] 

[[specify reference rate] +/- [•] per cent. Floating Rate] 

[Zero Coupon] 

[Index Linked Interest] 

[Equity Linked Interest] 

[Other (specify)] 

[further particulars specified below] 

11 Redemption/Payment Basis: [Redemption at par] 

[Index Linked Redemption] 

[Equity Linked Redemption] 

[Interest Linked Redemption] 

[Dual Currency] 

[Partly Paid] 

[Instalment] 

[Protection Amount] 

[Other (specify)] 

[The Redemption Amount shall be determined as 

provided below.] 

12 Change of Interest or Redemption/ [Specify details of any provision for convertibility of 

Payment Basis: 

Notes into another interest or redemption/payment 

basis] 

13 Put/Call Options: [Investor Put] 

[Issuer Call] 

[(further particulars specified below)] 

14 (i) Status of the Notes: [Senior/Subordinated (Tier 2)/Subordinated (Tier 

3)/Subordinated Perpetual] 

(ii) Date approval for issuance of Notes [•] 

obtained: [N.B. Only relevant where Board (or similar) 

authorisation is required for the particular tranche of 

Notes] 

15 Method of distribution: [Syndicated/Non-syndicated] 

PROVISIONS RELATING TO INTEREST (IF ANY) PAYABLE 

16 Fixed Rate Note Provisions [Applicable/Not Applicable] 

(If not applicable, delete the remaining sub-paragraphs 

of this paragraph) 

156

(i) Rate[(s)] of Interest: [•] per cent. per annum [payable [annually/semiannually/quarterly/monthly] 

in arrear] 

(ii) Interest Payment Date(s): [•] in each year [adjusted in accordance with Condition 

10(h)(A) or 10(h)(B) [specify any applicable Business 

Centre(s) for the definition of ‘Business Day’]/ 

unadjusted]] 

(iii) Fixed Coupon Amount [(s)]: [•] per [•] in nominal amount 

(iv) Broken Amount: [Insert particulars of any initial or final broken interest 

amounts which do not correspond with the Fixed 

Coupon Amount[(s)] and the Interest Payment Date(s) 

to which they relate] 

(v) Day Count Fraction (Condition 1(a)): 30/360/Actual/Actual 

([ICMA]/[ISDA])/Other][adjusted/unadjusted] 

(vi) Determination Date(s) (Condition 1(a)): [•] in each year [insert regular interest payment dates, 

ignoring issue date or maturity date in the case of a 

long or short first or last coupon] 

(vii) Other terms relating to the method of [Not Applicable/give details] 

calculating interest for Fixed Rate Notes: 

17 Floating Rate Provisions [Applicable/Not Applicable] (If not applicable, delete 

the remaining sub-paragraphs of this paragraph). 

(i) Interest Period(s): [•] 

(ii) Specified Interest Payment Dates: [•] 

(iii) Business Day Convention: [Floating Rate Business Day Convention/Following 

Business Day Convention/Modified Following 

Business Day Convention/Preceding Business Day 

Convention/other (give details)] 

(iv) Business Centre(s) (Condition 1(a)): [•] (please provide all the relevant Business Centres) 

(v) Manner in which the Rate(s) of Interest [Screen Rate Determination/ISDA Determination/other 

is/are to be determined: 

(give details)] 

(vi) Interest Period Date(s): [Not Applicable/specify dates] 

(vii) Party responsible for calculating the [Not Applicable/•] 

Rate(s) of Interest and Interest Amount(s) 

(if not the Calculation Agent): 

(viii) Screen Rate Determination 

[Applicable/Not Applicable] 

(Condition 1(a)): 

- Reference Rate: [•] 

- Interest Determination Date: [[•]/[TARGET] Business Days in [specify city] for 

[specify currency] prior to [the first day in each Interest 

Accrual Period/each Interest Payment Date]] 

- Relevant Screen Page: [•] 

(ix) ISDA Determination (Condition 1(a)): [Applicable/ Not Applicable] 

- Floating Rate Option: [•] 

- Designated Maturity: [•] 

- Reset Date: [•] 

ISDA Definitions: (if different from those [•] 

157

set out in the Conditions) [ 

(x) Margin(s): [+/-] [•] per cent. per annum 

(xi) Minimum Rate of Interest: [•] per cent. per annum 

(xii) Maximum Rate of Interest: [•] per cent. per annum 

(xiii) Day Count Fraction (Condition 1(a)): [•] 

(xvi) Fall back provisions, rounding provisions, [•] 

denominator and any other terms 

relating to the method of calculating 

interest on Floating Rate Notes, if 

different from those set out in the 

Conditions: 

18 Zero Coupon Note Provisions [Applicable/Not Applicable] (If not applicable, delete 

the remaining sub-paragraphs of this paragraph) 

(i) Amortisation Yield (Condition 7(b)): [•] per cent. per annum 

(ii) Reference Price: [•] 

(iii) Day Count Fraction (Condition 1(a)): [•] 

(iv) Any other formula/basis of [•] 

determining amount payable: 

19 Index Linked Interest Note Provisions [Applicable/Not Applicable] (If not applicable, delete 


(i) Index/Formula: [Give or annex details] 

(ii) Calculation Agent responsible for [•] 

calculating the Rate(s) of Interest and 

Interest Amount: [•] 

(iii) Basket: 2 The basket composed of each Index specified below 

in the relative weighting specified: 

Index Exchange Related Weighting 

Exchange 

2) Delete if single Index. 

158

(iv) Provisions for determining Rate(s) of [•] 

Interest and Interest Amount where 

calculated by reference to Index and/or 

Formula: 

(v) Sponsor: [•] 

(vi) Provisions for determining Coupon [•] 

where calculation by reference to 

Index and/or Formula is impossible 

or impracticable: 

(vii) Interest Period(s) or Calculation [•] 

Periods: 

(viii) Interest Period Date(s): 

[Not Applicable/specify dates] 

(ix) Interest Determination Date(s): [•] 

(x) Specified Interest Payment Dates: [•] 

(xi) Business Day Convention: [Floating Rate Business Day Convention/Following 




(xii) Business Centre(s) (Condition 1(a)): [•] (please provide all the relevant Business Centres) 

(xiii) Minimum Rate of Interest: 

[•] per cent. per annum 

(xiv) Maximum Rate of Interest: 


(xv) Day Count Fraction (Condition 1(a)): [•] 

(xvi) Exchange: 

[•] 

(xvii) Related Exchange: 

[•] 

20 Equity Linked Interest Note Provisions 

(i) Underlying Security/Formula: [Give or annex details] 


calculating the Rate(s) of Interest and 

Interest Amount: 

(iii) Basket: 3 The basket composed of Underlying Securities of each 

Company specified below in the [relative 

proportions/number of shares of each Company] 

specified: 

Underlying Company Exchange Related Proportion/ 

Securities Exchange Number 

3) Delete if single Underlying Security. 

159

(iv) Equity Valuation Date: [•] 

(v) Valuation Time: [•] 

(vi) Company: [•] 

(vii) Clearing System: [•] 

(viii) Provisions for determining Rate(s) of 

Interest and Interest Amount where 

calculation by reference to Underlying 

Security and/or Formula is impossible 

or impracticable: 

[•] 

[•] 

(ix) Interest Period(s): [•] 

(x) Interest Period Dates: [Not Applicable/specify dates] 

(xi) Interest Determination Date(s): [•] 

(xii) Specified Interest Payment Date(s) [•] 

(xiii) Business Day Convention: 

(xiv) Business Centre(s) (Condition 1(a)): 

[Floating Rate Business Day Convention/Following 




[•] (please provide all the relevant Business Centres) 

(xv) Minimum Rate of Interest: [•] per cent. per annum 

(xvi) Maximum Rate of Interest: 

(xvii) Day Count Fraction (Condition 1(a)): 

(xviii) Such other additional terms or 

provisions as may be required: 

(xvx) Description of formula to be used to 

determine Rate(s) of Interest and 

Interest Amount:: 


[•] 

[•] 

[•] 

(xx) Exchange: [•] 

(xxi) Related Exchange: 

[•] 

21 Dual Currency Note Provisions [Applicable/Not Applicable] (If not applicable, delete 


(i) 

Rate of Exchange/Method of calculating [Give details] 

Rate of Exchange: 

(ii) Calculation Agent, if any, responsible [•] 

for calculating the principal and/or 

interest due: 

(iii) Provisions applicable where calculation [•] 

by reference to Rate of Exchange is 

impossible or impracticable: 

160

(iv) Person at whose option Specified [•] 

Currency(ies) is/are payable: 

(v) Day Count Fraction (Condition 1(a)): [•] 

PROVISIONS RELATING TO REDEMPTION 

22 Call Option [Applicable/Not Applicable] (If not applicable, delete 


(Refer to Condition [•]) 

(i) Optional Redemption Date(s): [•] 

(ii) Optional Redemption Amount(s) of [•] per Note of [•] Specified Denomination 

each Note and method, if any, of 

calculation of such amount(s): 

(iii) 

If redeemable in part: 

Minimum Redemption Amount: 

Maximum Redemption Amount: 

[•] 

[•] 

(iv) Notice period: [The Issuer shall give notice of its intention to redeem 

the Notes not less than [•] Business Days prior to the 

relevant Optional Redemption Date] 

23 Put Option [Applicable/Not Applicable] (If not applicable, delete 


(i) Optional Redemption Date(s): [•] 

(ii) Optional Redemption Amount(s) of [•] per Note of [•] Specified Denomination 

each Note and method, if any, of 

calculation of such amount(s): 

(iii) Notice period: [•] 

24 Final Redemption Amount (all Notes [[•] per Note of [•] Specified Denomination/Other/See 

except Equity Linked Redemption Notes Appendix] 

and Index Linked Redemption Notes) of 

Each Note 

25 Final Redemption Amount (Equity Linked [Applicable/Not Applicable] (If not applicable, delete 

Redemption Notes) 


(i) 

Underlying Securities and/or Formula for [•] 

calculating the Equity Linked 

Redemption Amount: 


calculating the Equity Linked 

Redemption Amount: 

161

(iii) Basket: 4 The basket composed of Underlying Securities of each 

Company specified below in the [relative 

proportions/number of shares of each Company] 

specified: 

Underlying Company Exchange Related Proportion/ 

Securities Exchange Number 

(iv) Determination Date for determining the [Not Applicable/specify dates] 

Equity Linked Redemption Amount: 

(v) Underlying Securities Amount: 5 [•] 

(vi) Valuation Time: [•] 

(vii) Equity Valuation Date: [•] 

(viii) Presentation Date: 

[•] 

(ix) Company: [•] 

(x) ISIN Code / Common Code: [•] 

(xi) Business Centre: [•] 

(xii) Clearing System: [•] 

(xiii) Potential Adjustment Event: 

(xiv) Merger Event: 



(xv) Tender Offer: [Applicable/Not Applicable] 

(xvi) Nationalisation: 

(xvii) De-Listing: 

(xviii) Insolvency: 

(xix) Change in Law: 




[Applicable/Not Applicable]] 

(xx) Conversion Right: [Applicable/Not Applicable], (if applicable insert 

description) (Condition [•]) 

(xxi) Reverse Conversion Right: 

(xxii) Clearing system through which 

Underlying Securities Amount may be 

delivered upon redemption: 

[Applicable/Not Applicable], (if applicable insert 

description) (Condition [•]) 

[•] 


5) Only applies to physically settled Notes. 

162

(xxiii) Physical Settlement by delivery of 

Underlying Securities Amount: 

(xxiv) Such other additional terms or 

provisions as may be required: 

(xxv) Delivery Agent: 


[•] 

[Coöperatieve Centrale Raifeissen-Boerenleenbank 

B.A. (Rabobank International)] [Specify other] [Not 

Applicable] 

26 Final Redemption Amount (Index Linked [Applicable/Not Applicable] (If not applicable, delete 

Redemption Notes) 


(i) Formula: [•] 


calculating the Redemption Amount: 

(iii) Basket: 6 The basket composed of each Index specified below 

in the relative weighting specified: 

Index Exchange Related Weighting 

Exchange 

(iv) Index: [•] 

(v) Valuation Time: [•] 

(vi) Index Valuation Date: [•] 

(vii) Exchange: [•] 

(viii) Related Exchange: 

[•] 

(ix) Sponsor: [•] 

(x) Provisions for determining Final [•] 

Redemption Amount where calculated 

by reference to Index and/ or Formula 

and/or other variable: 

(xi) 

Determination Date(s) for determining the [•] 

Final Redemption Amount: 

(xii) Provisions for determining Final 

Redemption Amount where calculation 

by reference to Index and/or Formula 

and/or other variable is impossible or 

impracticable or otherwise disrupted: 

(xiii) Payment Date: 

(xiv) Minimum Final Redemption 

[•] 

[•] 

[•] 


163

(xv) Maximum Final Redemption 

[•] 

(xvi) Such other additional terms or provisions [•] 

as may be required: 

27 Early Redemption Amount 

(i) Early Redemption Amount(s) of each [As set out in the Conditions/Other] 

Note payable on redemption for taxation 

reasons (Condition 7(c)) or an event of 

default (Condition 13) and/or the 

method of calculating the same (if 

required or if different from that set out in 

the Conditions): 

(ii) Redemption for taxation reasons [Yes/No] 

permitted on days other than Interest 

Payment Dates (Condition 7(c)): 

(iii) Unmatured Coupons to become void [Yes/No/Not Applicable] 

upon early redemption (Bearer Notes 

only) (Condition 10(f)): 

(iv) 

Early Redemption Amount of each Note [[•]/ Not Applicable] 

payable on redemption pursuant to 

Condition 7(g): 

GENERAL PROVISIONS APPLICABLE TO THE NOTES 

28 Form of Notes Bearer Notes/Exchangeable Bearer Notes/Registered 

Notes] (Refer Condition [•]) 

[Delete as appropriate] 

[Temporary Global Note/Certificate exchangeable for a 

permanent Global Note/Certificate which is 

exchangeable for Definitive Notes/Certificates on [•] 

days’ notice/at any time/in the limited circumstances 

specified in the permanent Global Note/Certificate] 

[temporary Global Note/Certificate exchangeable for 

Definitive Notes/Certificates on [•] days’ notice] 

[permanent Global Note/Certificate exchangeable for 

Definitive Notes/Certificates on [•] days’ notice/at any 

time/in the limited circumstances specified in the 

permanent Global Note/Certificate] 

[restricted Global Certificate exchangeable for 

Definitive Certificates in the limited circumstances 

specified in the Restricted Global Certificate (for Notes 

issued pursuant to Rule 144A) 

29 Financial Centre(s) (Condition 10(h)) or other [specify either Condition 10(h)(A) or Condition 10(h)(B), 

special provisions relating to payment dates: or give details. Note that this paragraph relates to the 

date and place of payment, and not interest period 

end dates, to which sub-paragraphs 17(iv), 19(x) and 

20(xiv) relate] 

164

30 Talons for future Coupons or Receipts to be [Yes/No. If yes, give details] 

attached to Definitive Notes (and dates on 

which such Talons mature): 

31 Details relating to Partly Paid Notes: amount [Not Applicable/give details] 

of each payment comprising the Issue Price 

and date on which each payment is to be 

made and consequences (if any) of failure to 

pay, including any right of the Issuer to forfeit 

the Notes and interest due on late payment: 

32 Details relating to Instalment Notes: [Not Applicable/give details] 

Amount of each instalment, date on which 

each payment is to be made: 

33 Redenomination, renominalisation and [Not Applicable/The provisions [in Condition [•]] 

reconventioning provisions: 

[annexed to these Final Terms] apply] 

34 Consolidation provisions: [Not Applicable/The provisions [in Condition [•]] 

[annexed to these Final Terms] apply] 

35 Other terms or special conditions: 7 [•] 

DISTRIBUTION 

36 (i) If syndicated, names and addresses of [Not Applicable/give names and addresses] 

Managers: 

(Include names and addresses of entities agreeing to 

underwrite the issue on a firm commitment basis and 

names and addresses of the entities agreeing to place 

the issue without a firm commitment or extra 

information will be required if the managers and 

underwriters are not the same or if the placing is on a 

‘best efforts’ basis if such entities are not the same as 

the Dealers) 

(ii) Stabilising Manager(s) (if any): [Not Applicable/give names] 

(iii) Dealers’ Commission: [•] 

37 If non-syndicated, name and address of [Not Applicable/give names and addresses] 

Dealer: 

[If the sole Dealer in respect of Notes issued by 

Rabobank Nederland is Rabobank International 

Rabobank International will not subscribe for the 

Notes, but will act as agent for the placement of Notes. 

Such Notes will be deemed to be issued at the time 

when the Notes are transferred from Rabobank 

International to the subscriber and Rabobank 

International receives funds from the subscriber on 

behalf of Rabobank Nederland]. 

38 Applicable TEFRA exemption: [C Rules/D Rules/ Not Applicable] 

39 Additional selling restrictions: [Not Applicable/give details] 

40 Subscription period: [Not Applicable/give details] 

7) When adding any other final terms consideration should be given as to whether such terms constitute a ‘significant new factor’ and consequently 

trigger the need for a supplement to the Prospectus under Article 16 of the Prospectus Directive. 

165

GENERAL 

41 Additional steps that may only be taken Not Applicable/give details] 

following approval by an Extraordinary 

Resolution in accordance with Condition 14(a): 

42 The aggregate principal amount of Notes [Not Applicable/[Euro•]] 

issued has been translated into Euro at the 

rate of [•], producing a sum of (for Notes 

not denominated in Euro): 

43 In the case of Notes listed on Eurolist [Applicable/Not Applicable] (If not applicable, delete 

by Euronext Amsterdam N.V.: 


(i) Numbering and letters: The Notes will be numbered from 1 onwards and in the 

denominations of [currency/amount] and [currency/ 

amount] and will be preceded by the letters [A, AV, AX, 

AM, AF] 

(ii) Amsterdam Listing Agent: Rabobank Nederland or Coöperatieve Centrale 

Raffeisen-Boerenleenbank B.A. (Rabo Securities) 

(iii) Amsterdam Paying Agent: Coöperatieve Centrale Raffeisen-Boerenleenbank 

B.A. (Rabo Securities) 

[LISTING AND ADMISSION TO TRADING APPLICATION 

These Final Terms comprise the final terms required to list and have admitted to trading the issue of 

Notes described herein pursuant to the Euro 80,000,000,000 Global Medium Term Note Programme of 

Rabobank Nederland. 

RESPONSIBILITY 

The Issuer accepts responsibility for the information contained in these Final Terms. [Information on the 

underlying has been extracted from [•]. The Issuer confirms that such information has been accurately 

reproduced and that, so far as it is aware, and is able to ascertain from information published by [•], no facts 

have been omitted which would render the reproduced information inaccurate or misleading.] 

Signed on behalf of the Issuer: 

By: 

Duly authorised 

166

PART B – OTHER INFORMATION 

1 Listing 

(i) Listing: [Euronext Amsterdam/Luxembourg/Other (specify)/ 

None] 

(ii) Admission to Trading: [Application has been made for the Notes to be 

admitted to trading on [•] with effect from [•]/No 

application for admission to trading has been made]. 8 

(i) Estimate of total expenses related to [•] 

admission to trading: 

2 Ratings 

Rating: 

[Not Applicable] 

[The Notes to be issued have been rated:] 

[S&P: 

[Moody’s: 

[Fitch Ratings Ltd: 

[[Other: 

[•]] 

[•]] 

[•]] 

[•]] 

(the above disclosure should reflect the rating 

allocated to Notes of the type being issued under the 

Programme generally or, where the issue has been 

specifically rated, that rating.) 

[Need to include a brief explanation of the meaning of 

the ratings if this has previously been published by the 

rating provider.] 

3 [Notification 

The Netherlands Authority for the Financial Markets (Autoriteit Financiële Markten) [has been requested to 

provide/has provided - include first alternative for an issue which is contemporaneous with the 

establishment or update of the Programme and the second alternative for subsequent issues] the [include 

names of competent authorities of host Member States] with a certificate of approval attesting that the 

Offering Circular has been drawn up in accordance with the Prospectus Directive.] 

[Notwithstanding the foregoing, no offer of Notes to the public may be made in any Relevant Member State, 

which requires the Issuer to undertake any action in addition to the filing of the Final Terms with the 

Netherlands Authority for the Financial Markets unless and until the Issuer advises such action has been 

taken.] 9 

4 [Interests of natural and legal persons involved in the [issue/offer] 

[Include a description of any interest, including conflicting ones, that is material to the issue/offer, detailing 

the persons involved and the nature of the interest. May be satisfied by the inclusion of the following 

statement: 

[Save as disclosed in the Offering Circular, so far as the Issuer is aware, no person involved in the offer of 

the Notes has an interest material to the offer.] 

8) Where documenting a fungible issue, indicate that original securities are already admitted to trading. The concept of admission to trading will not be 

relevant for Notes which are listed on the Professional Securities Market in the UK or EuroMTF in Luxembourg. 

9) Delete if the minimum denomination is at least €50,000. 

167

5 [Reasons for the offer, estimated net proceeds and total expenses 10 

(i) [Reasons for the offer: [•] 

(See ‘Use of Proceeds’ wording in Offering Circular – 

if reasons for offer different from making profit and/or 

hedging certain risks will need to include those 

reasons here.)] 

(ii) Estimated net proceeds [•] 

(If proceeds are intended for more than one use will 

need to split out and present in order of priority. If 

proceeds insufficient to fund all proposed uses state 

amount and sources of other funding.) 

(iii) Estimated total expenses: [•] [Include breakdown of expenses.]] 

(If the Notes are derivative securities to which Annex 

XII of the Prospectus Directive Regulation applies it is 

only necessary to include disclosure of net proceeds 

and total expenses at (ii) and (iii) where disclosure is 

included at (i) above.) 

6 Yield (Fixed Rate Notes Only) 11 [•] 

Indication of yield: 

[Calculated as [include details of method of calculation 

in summary form] on the Issue Date.] 

The yield is calculated at the Issue Date on the basis 

of the Issue Price. It is NOT an indication of future 

yield. 

7 Historic interest rates (Floating Rate Notes only) 12 

Details of historic [LIBOR/EURIBOR/other] rates can be obtained from [Telerate]. 

8 Performance of index/formula, explanation of effect on value of investment and associated 

risks and other information concerning the underlying (Index-Linked Notes only) 13 

[Include details of where past and future performance and volatility of the index/formula can be obtained] 

[Include a clear and comprehensive explanation of how the value of the investment is affected by the 

underlying and the circumstances when the risks are most evident.] 

[Need to include details of the settlement procedures for derivative securities] 

[Need to include the exercise price or the final reference price of the underlying] 

[Need to include a description of any market disruption or settlement disruption events that affect the 

underlying.] 

[Need to include adjustment rules in relation to events concerning the underlying.] 

[Where the underlying is a security the name of the issuer of the security and its ISIN or other such security 

identification code.] 

[Where the underlying is an index need to include the name of the index and a description if composed by 

the Issuer and if the index is not composed by the Issuer need to include details of where the information 

about the index can be obtained. Where the underlying is not an index need to include equivalent 

information.] 

[Where the underlying is an interest rate a description of the interest rate.] 




13) Required for derivative securities to which Annex XII to the Prospectus Directive applies. 

168

[Where the underlying is a basket of underlyings disclosure of the relevant weightings of each underlying in 

the basket.] 

9 Performance of rate[s] of exchange and explanation of effect on value of investment (Dual 

Currency Notes only) 14 

[Include details of where past and future performance and volatility of the relevant rates can be obtained] 


underlying and the circumstances when the risks are most evident] 

10 Performance of underlying, explanation of effect on value of investment and associated risks 

and information concerning the underlying (Equity-Linked Notes only) 15 

[Need to include details of the settlement procedures for derivative securities] 

[Need to include the exercise price or the final reference price of the underlying] 

[Need to include a description of any market disruption or settlement disruption events that affect the 

underlying.] 

[Need to include adjustment rules in relation to events concerning the underlying.] 

[Where the underlying is a security the name of the issuer of the security and its ISIN or other such security 

identification code.] 

[Include details of where past and future performance and volatility of the relevant rates can be obtained] 


underlying and the circumstances when the risks are most evident.] 

[Where the underlying is Equity, include the name of underlying and include details of where the information 

about the Equity can be obtained.] 

11 Operational information 

(i) ISIN Code: [•] 

(ii) Common Code: [•] 

(iii) Fondscode: [•]/ Not Applicable 

(iv) German WKN-code: [•]/ Not Applicable 

(v) Private Placement number [•]/ Not Applicable 

(vi) Any clearing system(s) other than [Not Applicable/give name(s) and number(s)] 

Euroclear and Clearstream, Luxembourg 

and the relevant number(s): 

(i) The Depository Trust Company [Rabobank Nederland only – CUSIP Number] 

(vii) Delivery: Delivery [against/free of] payment 

(viii) Names and addresses of additional 

Paying/ Delivery Agent(s) (if any): 

Not Applicable/[•] 

(ix) Names (and addresses) of Calculation Not Applicable/[•] 

Agent(s) (if different from Coöperatieve 

Centrale Raiffeisen-Boerenleenbank B.A. 

(Rabobank International)) 



169

12 General 

Tradeable Amount: 

Time period during which the offer is open 

Description of the application process: 

Description of possibility to reduce 

subscriptions 

Manner for refunding excess amount paid 

by applicants: 

Minimum and/or maximum amount of 

application: 

Method and time limit for paying up the 

securities and for delivery of the securities: 

Manner and date in which resuls of the offer 

are to be made public: 

Procedure for exercise of any right of 

pre-emption, the negotiability of subscription 

rights and the treatment of subscription rights 

not exercised: 

[•] 

So long as the Notes are represented by a temporary 

Global Note or permanent Global Note, the Notes will 

be tradeable only in principal amounts of at least the 

Specified Denomination or if more than one Specified 

Denomination, the lowest Specified Denomination, 

and integral multiples of the Tradeable Amount in 

excess thereof 

[•] 

[•] 

[•] 

[•] 

[•] 

[•] 

[•] 

[•] 

[Where interest or discount is derived from any Notes by any person who is not resident in Singapore 

and who carries on any operations in Singapore through a permanent establishment in Singapore, the tax 

exemption available under Section 13(1)(a) and 13(1)(aa) of the Income Tax Act, Chapter 134 of Singapore 

for interest and discount income derived from the Notes shall not apply if such person acquires such Notes 

using the funds and profits of such person’s operations through a permanent establishment in Singapore. 

Any person whose interest or discount derived from the Notes is not exempt from tax shall include such 

interest and discount in a return of income made under the Income Tax Act, Chapter 134 of Singapore.] 16 

[Rabobank Singapore Branch, as issuer of the Notes, is subject to restrictions on the acceptance of 

deposits in Singapore dollars. The Notes do not constitute or evidence a debt repayable by Rabobank 

Singapore Branch on demand to the Noteholder. The Noteholder may recover the principal sum from 

Rabobank Singapore Branch subject to the Terms and Conditions of the Notes as set out in the Offering 

Circular. The value of the Notes, if sold on the secondary market, is subject to the market conditions 

prevailing at the time of the sale.] 17 

16) To be inserted where the Notes are ‘qualifying debt securities’ under the Income Tax Act, Chapter 134 of Singapore and the Notes are issued by 

Rabobank Singapore Branch. 

17) To be inserted when the Notes are issued by Rabobank Singapore Branch, denominated in Singapore dollars, issued to sophisticated investors (as 

defined in the Guidelines for Operation of Wholesale Banks issued by the Monetary Authority of Singapore) or their nominees and Rabobank 

Singapore Branch reasonably expects or foresees that the Notes will not be held at all times by persons who are sophisticated investors. 

170

SUMMARY OF SIGNIFICANT DIFFERENCES BETWEEN IFRS AND U.S. GAAP 

Our consolidated annual and financial statements included in this Offering Circular are presented in 

Euro and have been prepared and presented in accordance with IFRS, as adopted by the EU, which 

comprise standards and interpretations approved by the International Accounting Standards Board (‘IASB’) 

and the International Accounting Standards and International Financial Reporting Interpretations 

Committee. 

IFRS as adopted by the EU differs from U.S. GAAP in certain respects that may be material to the 

financial information included in this Offering Circular. In making an investment decision, investors must rely 

upon their own examination of the Rabobank Group, the terms of any Notes offered and the financial 

information contained herein. Potential investors should consult their own professional advisors for an 

understanding of differences between IFRS as adopted by the EU and U.S. GAAP and how those 

differences might affect the financial information included in this Offering Circular. 

We have summarised below certain significant differences between IFRS as adopted by the EU and 

U.S. GAAP relevant to our IFRS financial statements. However, this summary does not purport to provide 

a comprehensive analysis, including quantification, of such differences but rather a list of potential 

differences in accounting principles related to our IFRS financial statements. We have not quantified these 

differences, nor have we undertaken a reconciliation of our IFRS financial statements to U.S. GAAP. Had we 

undertaken any such quantification or reconciliation, other potentially significant accounting and disclosure 

differences may have come to our attention that are not identified below. Accordingly, we cannot assure you 

that the identified differences in the summary below represent all of the principal differences to our IFRS 

financial statements. 

The regulatory bodies that promulgate IFRS and U.S. GAAP have significant on-going projects that 

could affect a future comparison such as this. We have not attempted to identify future differences between 

IFRS as adopted by the EU and U.S. GAAP resulting from prescribed changes in accounting standards. 

Neither have we attempted to identify all future differences between IFRS as adopted by the EU and U.S. 

GAAP that may affect our IFRS financial statements as a result of transactions or events that may occur in 

the future. 

First time adoption of IFRS 

Rabobank applied IFRS as adopted by the EU for the first time for its financial statements for the year 

ended December 31, 2005. IFRS includes a standard which prescribes how an entity should apply IFRS for 

the first time. Although the general rule of this standard is that IFRS should be applied as if an entity had 

always applied IFRS (i.e. retroactive application) there are several exemptions to this rule. The standard 

amongst others includes exemptions for hedge accounting, business combinations, employee benefits, 

cumulative translation differences, designation of previously recognised financial instruments and insurance 

contracts. 

U.S. GAAP does not include similar exemptions. Therefore under U.S. GAAP the financial statements 

could significantly differ for the mentioned exemptions. 

Goodwill 

Under IFRS, contingent consideration is recognised when it is probable and reliable measurable. Under 

U.S. GAAP, contingent consideration is recognised when the contingency is resolved and the consideration 

becomes determinable. 

Financial instruments 

Although IFRS and U.S. GAAP are generally similar with respect to the recognition and measurement 

of financial instruments there are certain differences that could result in significant differences between IFRS 

financial statements and U.S. GAAP financial statements. 

IFRS and U.S. GAAP define different categories of financial instruments, the classification criteria and 

requirements for subsequent measurement are presented in the table below: 

171

Classification IFRS U.S. GAAP 

Held for Trading 

Generally financial instruments Accounted for at fair value. Similar to IFRS. 

held for sale in the short Unrealised and realised gains 

term. 

and losses recognised in the 

income statement. 

Financial assets and liabilities designated at fair value through profit or loss 

When certain criteria are met. Category does not 

Accounted for at fair value. 

exist under U.S. GAAP. 

Unrealised and realised gains 

and losses recognised in the 

income statement. 

Held-to-maturity 

Generally financial assets held Accounted for at amortised cost. Similar to IFRS. 

with a positive intent and ability 

to hold to maturity. 

Loans and receivables 

Generally financial assets with Accounted for at amortised cost. Category not defined 

fixed or determinable payments 

in U.S. GAAP however 

that are not quoted on an active 

treatment of these type 

market. 

of assets is similar to IFRS. 

Available-for-sale 

Financial instruments that are Accounted for at fair value. Similar to IFRS except for 

not held for trading purposes, Unrealised and realised gains foreign exchange gains and 

originated by us or held-to- and losses recognised in a losses on monetary items. 

maturity. separate component of equity Only debt and equity securities 

except for impairment losses and may be classified in this 

foreign exchange gains and losses category. 

on monetary items. 

Transaction costs for financial assets at amortised cost 

IFRS requires transaction costs for financial assets at amortised cost to be included at initial recognition 

when these costs are directly attributable and incremental. Under U.S. GAAP these costs are included as 

transaction costs when these costs are directly attributable. 

Hedging Contracts and Derivatives 

U.S. GAAP and IFRS have similar rules with respect to hedge accounting being that if there is a 

designated hedging relationship between a hedging instrument and a hedged item and, among other 

requirements, this relationship is considered effective, it must be designated as a ‘cash flow’ or a ‘fair value’ 

hedge. Gains and losses of derivatives in ‘cash flow’ hedges are deferred as a component of shareholders’ 

equity. The deferred gains and losses are then reclassified to the profit and loss statement when the hedged 

item affects the income statement. In a fair value hedge the changes in fair value of a hedged item for the 

hedged risk are recognised to the income statement during the year incurred. These changes in fair value 

may be offset, in whole or in part depending on a variety of factors, by the gains and losses on the hedge 

instruments which are also recorded in earnings. 

Some instruments or groups of instruments may qualify for hedge accounting under IFRS where these 

do not qualify for hedge accounting under U.S. GAAP. Under IFRS a portfolio of assets and or liabilities can 

be hedged item when applying fair value hedge accounting for a portfolio hedge of interest rate risk. Under 

IFRS as adopted by the EU the rules with respect to fair value hedge accounting for a portfolio hedge of 

interest rate risk are relaxed with respect to prepayment risk included in the portfolio and with respect to 

172

effectiveness testing. Rabobank applies fair value hedge accounting for a portfolio hedge of interest rate risk 

as adopted by the EU. Under U.S. GAAP these items would not have qualified for hedge accounting and 

consequently under U.S. GAAP more assets would have been measured at amortised cost resulting in more 

volatile results. 

IFRS allows entities to designate certain financial assets and financial liabilities at fair value through 

profit or loss. Such designation can be made when one of three criteria is met. These criteria can be 

summarised as: it eliminates or significantly reduces a measurement of recognition inconsistency, a group 

of financial assets and or financial liabilities is managed and its performance is evaluated on a fair value basis 

in accordance with a documented risk management or investment strategy, or the financial instrument 

contains a substantial embedded derivative. U.S. GAAP does not have a similar option. Consequently under 

U.S. GAAP less financial instruments would be included at fair value through profit or loss with the 

consequence that result would be more volatile. 

Transfer of financial assets 

Under IFRS a transfer of financial assets is accounted for as a derecognition only if substantially all of 

the asset’s risks and rewards of ownership are transferred or control is transferred in the event that not 

substantially all of the asset’s risks and rewards are transferred. However if substantially all the risks and 

rewards are retained, the asset is not derecognised. Control is transferred if the transferee has the practical 

ability to sell the asset unilaterally without needing to impose additional restrictions on the transfer. 

Under U.S. GAAP a transfer of financial assets is accounted for as a sale only if the transferor 

surrenders control of the assets and to the extend that consideration other than beneficial interests in the 

transferred assets is received. Control is surrendered only if the following conditions are met: the transferred 

assets have been isolated from the transferor, each transferee has the unconstrained right to pledge or 

exchange the assets (or, if the transferee is a qualifying special purpose entity ‘QSPE’, each holder of the 

beneficial interests in the QSPE has the unconstrained right to pledge or exchange those beneficial interests) 

and the transferor does not maintain effective control over the transferred asset. A transfer of financial assets 

to a QSPE should not consolidate the QSPE. An SPE is qualifying only if it is demonstrably distinct from the 

transferor and its activities are strictly limited. A QSPE generally may hold only passive financial assets and 

may be permitted to dispose of them only in automatic response to certain objectively defined events. 

Investments on which significant influence can be exercised 

Generally IFRS and U.S. GAAP are similar in the sense that investments on which significant influence 

can be exercise should be included using the equity method. However IFRS includes an exemption to this 

rule for items held by venture capital organisations or mutual funds, unit trusts and similar entities. For such 

items the fair value option for financial instruments could be applied. 

Joint ventures 

Under IFRS joint ventures can be included either by applying the equity method or through 

proportionate consolidation. Rabobank accounts for its joint ventures by applying the proportionate 

consolidation method. 

Under U.S. GAAP joint ventures should be included in the financial statements by applying the equity 

method. 

Foreign Currency Transactions 

Under IFRS, at the balance sheet date, foreign currency monetary balances are reported using the 

closing exchange rate. All differences from prior period that arise as a result of changes in foreign exchange 

rates are recorded in the income statement. 

Under U.S. GAAP for available for sale monetary items all changes in fair value (unless other than 

temporary declined in value) are recorded in other comprehensive income including those that arise as a 

result of changes in foreign exchange rates. 

Provision for Risks and Charges 

The treatment of loss contingencies under U.S. GAAP is similar to IFRS. However, if a range estimates 

for the obligation is determined and no amount in the range is more likely than any other amount in the range, 

the minimum (rather than the mid-point) amount must be used to measure the liability. Accordingly to IFRS 

173

as adopted by the EU, the entity must discount the anticipated cash flows expected to be required to settle 

the obligation if the impact is material. 

Restructuring activities 

Under IFRS a restructuring provision can be recognised when an entity has a present obligation to 

restructure, having developed a formal plan for restructuring and raised a valid expectation in those affected 

that it will carry out restructuring, and a reasonable estimate can be made of the amount of the obligation. 

U.S. GAAP requires that the liability for the costs of restructuring are recognised and measured at fair value 

when the liability is incurred, rather than at the date at which the exit plan is committed to. In particular, 

where employees are required to serve beyond the minimum retention period in order to receive one-time 

termination benefits such as severance pay, the costs of the one time termination benefit are recognised at 

fair value over the term of the retention period. If it is not possible for the employee to determine the type 

and amount of benefits they will receive from involuntary termination then it is not possible to recognise a 

provision for any such amounts. 

Sale and Leaseback 

Under IFRS, capital gains from property sold at fair value are recognised at the time of sale when an 

operating lease is signed with the new owner under certain conditions. Under U.S. GAAP, any gain realised 

is deferred over the duration of the lease contract. 

Deferred Taxes 

IFRS measures deferred taxes using the enacted or substantially enacted tax rate, where U.S. GAAP 

measures deferred taxes only on the enacted tax rate. 

Under IFRS, deferred tax in respect of temporary differences on subsidiaries, associates and joint 

ventures is not recognised in some circumstances. Under U.S. GAAP, such differences on equity method 

investments, other than certain foreign corporate joint ventures, is recognised in full. 

Minority interests 

Under IFRS, minority interests of shareholders are presented separately from capital and reserves 

within shareholders’equity. 

Under U.S. GAAP minority interests do not form part of the shareholders’ equity. Minority interests are 

a liability form a consolidated point of view. 

Rabobank has a significant amount of minority interest consequently under U.S. GAAP shareholders’ 

equity would be significantly less as compared to IFRS. 

Disclosure differences between IFRS and U.S. GAAP 

In addition to the summary of significant differences between IFRS and U.S. GAAP, which may affect 

consolidated income and total shareholders’ equity, there are a number of significant differences with 

respect to disclosure. Compared to IFRS the financial statements disclosures required under U.S. GAAP 

can be more comprehensive in many areas including taxes, retirement and other post retirement benefits, 

leasing, segment information and related party disclosures. 

174

SUMMARY OF PRINCIPAL DIFFERENCES BETWEEN DUTCH GAAP AND U.S. GAAP 

The audited consolidated financial statements of the Group included or incorporated by reference in 

this Offering Circular for the years ended December 31, 2005 and preceeding are prepared and presented 

in accordance with generally accepted accounting principles in the Netherlands (‘Dutch GAAP’), which 

differs in certain significant respects from generally accepted accounting principles in the United States 

(‘U.S. GAAP’). Certain significant differences between U.S. GAAP and Dutch GAAP relevant to the financial 

statements are summarised below. Such summary should not be considered exhaustive. 

Goodwill 

Dutch GAAP: Goodwill represents the excess of the purchase price of investments, subsidiaries and 

participating interests over the estimated fair value of net assets acquired at acquisition date and may be 

debited or credited in full to shareholders’ equity at the transaction date. Alternatively, goodwill may be 

capitalised with a maximum amortisation period of, normally, 20 years. 

U.S. GAAP: Goodwill is capitalised without amortisation. Goodwill is periodically tested for impairment, 

following specifically prescribed procedures. 

Fund for General Banking Risks 

Dutch GAAP: In addition to specific allowances for loan losses and country risk, that may be 

determined on a dynamic basis, Dutch banks maintain a fund for general banking risks, classified outside 

shareholders’ equity. This fund is net of taxes and covers general banking risks. These risks include risks 

on account of unforeseeable and therefore unquantifiable expenses, such as frauds and nationalisations, 

and risks on account of exceptional setbacks associated with lending and other banking activities. Fund 

level is quantified by management estimate. Movements in the fund are accounted for separately in the 

income statement. The fund is presented in the balance sheet as part of group equity. 

U.S. GAAP: Under U.S. GAAP, a fund for general banking risks is not allowed. The amounts classified 

in the fund under Dutch GAAP would be part of shareholders’ equity under U.S. GAAP. 

Bonds and other Interest-bearing Securities in the Investment Portfolio 

Dutch GAAP: Bonds and other interest-bearing securities included in the investment portfolio are 

carried at redemption value. The difference between redemption value and cost is accounted for under 

prepayments and accrued income or accruals and deferred income and taken to interest income over the 

term of the securities concerned. Gains and losses on the sale of bonds and other interest-bearing securities 

are accrued or deferred, as appropriate, and then taken as interest income over the weighted average 

remaining term to maturity of that investment portfolio. If, as a result, capitalised losses exceed deferred 

gains, the excess may be taken directly to the income statement and deducted from interest income. 

However, gains and losses on securities sold on account of a structural reduction of the investment portfolio 

are taken directly to interest income. 

U.S. GAAP: All bonds and other interest-bearing securities included in the investment portfolio are 

classified as ‘available for sale’ if these securities may be sold prior to maturity as part of the asset/liability 

management or in response to other factors, or classified as ‘held to maturity’ in other cases. If classified 

as ‘available for sale’, they are carried at market value. Unrealised gains and losses are reported in a separate 

component of shareholders’ equity. Realised gains and losses are recognised in the income statement. If 

securities are classified as ‘held to maturity’, amortised realised gains and losses are recognised directly in 

the income statement. 

Shares in the Investment Portfolio 

Dutch GAAP: Shares (and other variable-yield securities) are carried at market value. Unrealised gains 

and losses are taken to a share revaluation reserve, net of tax. If the revaluation reserve is insufficient to 

absorb a decline in value, this amount is charged to the income statement. Realised gains are included in 

the income statement. 

U.S. GAAP: All shares are classified as ‘available for sale’ and stated at market value. Unrealised 

valuation differences are reported in a separate component of shareholders’ equity, net of taxes. The amount 

of the writedown is charged to the income statement only when a decline in value is judged to be other than 

temporary. Realised gains are included in the income statement. 

175

Derivatives Used for Hedging Purposes 

Dutch GAAP: Derivatives which are used to manage overall structural interest rate exposure and which 

are not assigned to specific assets, liabilities or firm commitments are accounted for on an accrual basis. 

U.S. GAAP: These derivatives are carried at fair value and changes in fair value are included in income 

as they occur. 

Property in Use 

Dutch GAAP: Property is carried at current cost (replacement cost) or appraisal value. Changes in value 

are taken to the revaluation reserve, net of taxes. Bank premises are depreciated on a straight-line basis 

over their useful life. Property in use by insurance companies is normally carried at appraisal value and not 

depreciated. 

U.S. GAAP: Bank premises and property in use by insurance companies are carried at cost and 

depreciated on a straight-line basis over their useful life. Property held for investment is generally carried at 

the lower of cost or net realisable value and depreciated on a straight-line basis over its useful life. 

Provision for Deferred Taxes 

Dutch GAAP: In the accounts of banks, provisions for deferred taxes are carried at present value. 

U.S. GAAP: Provisions for deferred taxes are carried on a nominal basis. 

Pensions, other Post-employment Benefits and Post-retirement Benefits 

Dutch GAAP: Pensions and other post-employment benefits are generally calculated using actuarial 

computations based on current compensation levels, taking into account the return achieved by the pension 

funds in excess of the actuarial interest rate. However, it is allowed to include estimates of future economic 

factors such as pay increases, indexations, and investment returns in the calculation. The expected costs 

of post-retirement benefits are only provided upon retirement. As an alternative, Dutch GAAP also allows 

the application of IAS 19 or, for (subsidiaries of) companies listed in the US, FAS 87. 

U.S. GAAP: For pensions, specific actuarial computations are prescribed based on current and future 

compensation levels taking into account the market value of the assets of the pension funds and current 

interest rates. Other post-employment benefits are recognised when the employer’s services have been 

rendered, the rights have been vested and the obligation is probable and quantifiable. Post-retirement 

benefits have to be accrued during the years that an employee renders services. 

Technical Provisions (Insurance) 

Dutch GAAP and U.S. GAAP: The calculation of technical provisions rely on actuarial principles which 

can, to a certain extent, be different between Dutch GAAP and U.S. GAAP. 

Other Provisions 

Dutch GAAP: Provisions could be set up under certain conditions for expenses that are expected to 

be incurred in the future. Provision for life insurance is calculated in accordance with Actuarial Principles of 

the Insurance Chamber (‘Verzekeringskamer’). Furthermore, a provision is normally made for future 

catastrophes. 

U.S. GAAP: The criteria for setting up provisions are more stringent under U.S. GAAP and include, 

among other provisions, a requirement that a liability be incurred at the financial statement date for expenses 

expected to be incurred in the future. Provision for life insurance is calculated on the basis of specific 

actuarial principles that differ in some respects from those applied under Dutch GAAP. A provision for future 

catastrophes is not allowed. 

Consolidation 

Dutch GAAP: Companies that are controlled by the parent company are included in consolidation. 

Control may be established, among other ways, by having more than 50 per cent. of the voting rights. 

U.S. GAAP: Companies are consolidated where there is a majority of the voting rights or a direct or 

indirect controling financial interest. 

176

INDEX TO FINANCIAL STATEMENTS 

CONSOLIDATED FINANCIAL STATEMENTS OF THE RABOBANK GROUP 

FOR THE YEAR ENDED DECEMBER 31, 2005 

Consolidated balance sheet at December 31, 2005 

Consolidated profit and loss account for 2005 

Consolidated statement of changes in equity 

Consolidated cash flow statement 

Notes to the consolidated financial statements 

Auditors’ report 

Page 

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F92 

HISTORICAL FINANCIAL INFORMATION 

Key figures Rabobank Group 

Consolidated balance sheet of Rabobank Group 

Consolidated profit and loss account of Rabobank Group 

Cash flow statement of Rabobank Group 

Balance sheet of Rabobank Nederland (2005-2004) 

Profit and loss account of Rabobank Nederland (2005-2004) 

Balance sheet of Rabobank Nederland (2004-2003) 

Profit and loss account of Rabobank Nederland (2004-2003) 

Material Contracts 

Third party information and statement by experts and declarations of any interest 

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HISTORICAL FINANCIAL INFORMATION 

KEY FIGURES RABOBANK GROUP 1 

2005 2004 2004 2003 2002 2001 

Volume of services (in EUR millions) 

Total assets 506,234 483,574 475,089 403,305 374,720 363,679 

Private sector lending 278,095 248,958 252,996 235,425 212,323 197,262 

Due to customers 186,459 177,482 192,123 172,571 171,632 172,174 

Assets managed and held in 

custody 224,200 223,400 195,000 184,000 168,000 194,400 

Financial position and solvency (in EUR millions) 

Equity 26,349 23,004 18,143 15,233 14,261 12,380 2 

Tier I capital 24,860 21,404 22,621 19,660 17,202 15,092 2 

Qualifying capital 25,272 21,205 22,586 19,892 17,414 15,542 2 

Total risk-weighted assets 213,901 196,052 198,552 182,820 165,843 152,812 

Solvency requirement 17,112 15,684 15,887 14,626 13,268 12,225 

Tier I ratio 11.6 10.9 11.4 10.8 10.3 9.9 2 

BIS ratio 11.8 10.8 11.4 10.9 10.5 10.2 2 

Profit and loss account (in EUR millions) 

Total income 9,363 9,222 10,055 9,018 8,518 8,388 

Total expenses 6,164 6,177 6,732 6,243 5,839 5,965 

Value adjustments 517 479 514 427 752 539 

Operating profit before taxation 2,682 2,566 2,809 2,348 1,927 1,884 

Net profit 2,083 1,793 1,536 1,370 1,222 1,178 

Ratios 

Return on equity 9.1% 9.0% 10.1% 9.6% 9.9% 9.5% 

Efficiency ratio 65.8% 67.0% 67.0% 69.2% 68.5% 71.1% 

Nearby 

Member banks 248 288 288 328 349 369 

Offices: 

- branches 1,249 1,299 1,299 1,378 1,516 1,648 

- contact points 3,031 2,965 2,965 2,800 2,697 2,618 

Cash dispensing machines 3,116 3,062 3,062 2,981 2,979 2,889 

Foreign offices 267 244 244 222 169 137 

Employees 

- total number 50,988 56,324 56,324 57,055 58,096 58,120 

- full-time equivalents 45,580 50,216 50,216 50,849 51,867 52,173 

Employee satisfaction 81% 85% 85% 85% 84% 83% 

Client data 

Members (x 1,000) 1,551 1,456 1,456 1,360 1,108 825 

Membership/customer ratio 17.7% 16.7% 16.7% 16.0% 13.2% 9.7% 

Rating 

Standard & Poor’s AAA AAA AAA AAA AAA AAA 

Moody’s Investor Service Aaa Aaa Aaa Aaa Aaa Aaa 

SAM rating (corporate social 

responsibility) 3 80% 74% 64% 

General: 

Due to consolidation effects, the sum of the figures relating to Group entities will not always correspond 

with Rabobank Group totals. Changes in terms of percentages can vary as a result of rounding. 

1) These figures are unaudited. The first two columns corresponding to the years 2005 and 2004 are based on IFRS. The other columns corresponding 

to the years 2001 up to and including 2004 are based on Dutch GAAP. 

2) The Tier 1 ratio and the BIS ratio for 2001 have been calculated taking into account the effect on equity of the changed accounting policy for pensions 


3) The SAM rating is calculated every two years. 

F93

CONSOLIDATED BALANCE SHEET (AFTER PROFIT APPROPRIATION) 

OF RABOBANK GROUP AT DECEMBER 31* 

(in EUR millions) 2004 2003 

Assets 

Cash 7,204 7,117 

Short-term government paper 4,132 3,211 

Professional securities transactions 26,134 30,199 

Other banks 14,454 11,720 

Banks 40,588 41,919 

Public sector lending 2,201 2,161 

Private sector lending 252,996 235,425 


Lending 276,170 250,797 

Interest-bearing securities 91,889 71,141 

Shares 15,168 10,093 

Participating interests 510 201 

Property and equipment 3,927 3,964 


Prepayments and accrued income 30,033 9,878 

Total assets 475,089 403,305 

Liabilities 


Other banks 73,368 62,676 

Banks 96,266 82,856 

Savings 77,737 71,559 


Other funds entrusted 110,267 97,703 

Funds entrusted 192,123 172,571 

Debt securities 92,578 80,695 

Other liabilities 12,447 11,907 

Accruals and deferred income 34,314 12,513 

Provisions 20,752 19,177 

448,480 379,719 

Fund for general banking risks 1,756 1,679 


3,847 3,890 

Member Capital 3,841 3,853 

Revaluation reserve 136 222 

Other reserves 12,287 11,158 

Trust Preferred Securities III, IV, V and VI 1,879 - 

Reserves 18,143 15,233 

Third-party interests 4,619 4,463 

Group equity 26,609 23,586 


Contingent liabilities 7,612 6,435 

Irrevocable facilities 30,114 26,117 

*) At January 1, 2004 a change in accounting policy concerning the recognition of Trust Preferred Securities I and II was introduced. The comparative 

figures for 2003 have been restated accordingly. 

F94

CONSOLIDATED PROFIT AND LOSS ACCOUNT OF RABOBANK GROUP* 


Income 

Interest income 18,773 17,794 

Interest expense 12,524 11,838 

Interest 6,249 5,956 

Income from securities and participating interests 482 353 

Commission income 2,458 2,146 

Commission expense 346 294 

Commission 2,112 1,852 

Results on financial transactions 312 170 

Other income 900 687 

Total income 10,055 9,018 

Expenses 

Staff costs 4,029 3,770 

Other administrative expenses 2,335 2,101 

Staff costs and other administrative expenses 6,364 5,871 

Depreciation 368 372 

Operating expenses 6,732 6,243 

Value adjustments to receivables 525 575 

Value adjustments to financial fixed assets (11) (148) 

Total expenses 7,246 6,670 

Operating profit before taxation 2,809 2,348 

Taxation on operating profit 957 712 

Operating profit/Group profit after taxation 1,852 1,636 

Third-party interests 316 266 

Net profit 1,536 1,370 

*) At January 1, 2004 changes in accounting policy concerning the recognition of Trust Preferred Securities I and II and concerning the recognition of 

investment results on insurance activities were introduced. The comparative figures for 2003 have been restated accordingly. 

F95

CASH FLOW STATEMENT OF RABOBANK GROUP* 


Cash flow from operational activities 

Operating profit/Group profit after taxation 1,852 1,636 

Adjustments for: 

- Depreciation 368 372 

- Value adjustments to receivables 525 575 

- Value adjustments to financial fixed assets (11) (148) 

- Movements in technical reserves relating to the 

insurance business 1,363 1,119 

- Movements in other provisions 212 (280) 

- Movements in accrued and deferred items 1,646 1,729 

4,103 3,367 

Cash flow from business operations 5,955 5,003 

Movements in short-term government paper (921) (1,398) 

Movements in securities trading portfolio (19,723) 2,665 

Movements in securitised loans (963) (50) 

Movements in banks 14,741 633 

Movements in lending (25,898) (26,120) 

Movements in funds entrusted 19,552 939 

Other movements from operational activities (1,550) 4,609 

(14,762) (18,722) 

Net cash flow from operational activities (8,807) (13,719) 

Cash flow from investing activities 

Investments and purchases 

- Investment portfolio (24,469) (24,222) 

- Participating interests (321) (45) 

- Tangible fixed assets (534) (686) 

(25,324) (24,953) 

Disposals, redemptions and sales 

- Investment portfolio 20,575 19,900 

- Participating interests 11 15 

- Tangible fixed assets 239 227 

20,825 20,142 

Net cash flow from investing activities (4,499) (4,811) 

Cash flow from financing activities 

Movements in Member Capital and Trust Preferred 1,867 2 

Securities III, IV, V and VI 

Movements in subordinated loans (120) 1,450 

Movements in debt securities 11,883 18,956 

Payment on Member Capital and Trust Preferred 

Securities III, IV, V and VI (237) (215) 

Net cash flow from financing activities 13,393 20,193 

Net cash flow/movement in cash 87 1,663 

The cash flow statement provides a summary of the net movements in operational, investing and financing activities. Cash and cash equivalents consist 

of legal tender and balances available on demand with central banks. 



F96

BALANCE SHEET OF RABOBANK NEDERLAND* 

AT DECEMBER 31 (BEFORE PROFIT APPROPRIATION) 


Assets 

Cash 1,807 6,212 

Short-term government securities 364 3,384 


Other banks 111,654 97,767 

Banks 148,555 123,829 




Lending 99,720 75,658 


Shares 5,813 4,811 

Interests in group companies 7,426 8,167 

Other equity interests 2,436 239 

Property and equipment 338 215 

Intangible assets 74 19 




Total assets 371,105 329,428 

Equity and liabilities 


Other banks 119,882 98,509 

Banks 139,778 120,719 

Savings 1,597 730 









357,906 319,392 


Capital 638 638 

Revaluation reserve and translation differences 524 817 


Profit for the year 916 715 

Equity 2,740 2,322 

Capital base 13,199 10,036 



Credit facilities 31,716 21,484 

*) The financial statements of Rabobank Nederland have been prepared in accordance with accounting principles generally accepted in the Netherlands 

and comply with the financial reporting requirements included in Part 9 of Book 2 of the Netherlands Civil Code. Apart from two exceptions, these 

accounting principles are the same as those used in preparing the consolidated financial statements of Rabobank Group, which have been prepared 

according to IFRS. The exceptions concern the measurement of associates and the measurement of internal derivative financial instruments. The 

terminology of the following accounting policies- is also derived from the consolidated financial statements. Associates are measured at net asset value 

and internal derivative financial instruments are measured using the accrual method. Rabobank Group comprises the local Rabobanks (‘Members’) in 

the Netherlands, the central cooperative Rabobank Nederland and other specialised subsidiaries. 

F97

PROFIT AND LOSS ACCOUNT OF RABOBANK NEDERLAND FOR 2005* 


Share of profit of associates after tax 1,605 1,320 

Other income/(expense) after tax (689) (605) 

Profit for the year 916 715 

Prepared in accordance with Section 402 of Book 2 of the Netherlands Civil Code. 

*) The financial statements of Rabobank Nederland have been prepared in accordance with accounting principles generally accepted in the Netherlands 

and comply with the financial reporting requirements included in Part 9 of Book 2 of the Netherlands Civil Code. Apart from two exceptions, these 

accounting principles are the same as those used in preparing the consolidated financial statements of Rabobank Group, which have been prepared

BALANCE SHEET OF RABOBANK NEDERLAND (AFTER PROFIT APPROPRIATION)* 

AT DECEMBER 31 


Assets 

Cash 6,197 5,959 

Short-term government paper 3,920 3,024 


Other banks 97,575 82,826 

Banks 123,637 112,697 




Lending 75,817 67,750 


Shares 4,772 1,309 

Participating interests in group companies 7,327 6,459 

Other participating interests 240 47 

Property and equipment 261 276 



Total assets 321,503 257,209 

Liabilities 


Other banks 98,486 83,753 

Banks 120,696 103,240 

Savings 729 375 








312,453 250,182 

Fund for general banking risks 460 439 


Share capital 638 638 

Revaluation reserve (20) 56 


Equity 9,050 7,027 



Irrevocable facilities 21,484 19,702 

*) At January 1, 2004 a change in accounting policy concerning the recognition of Trust Preferred Securities I and II was introduced. The comparative 

figures for 2003 have been restated accordingly. 

F99

PROFIT AND LOSS ACCOUNT OF RABOBANK NEDERLAND* 


Profit of participating interests after taxation 1,335 1,018 

Other income/(expense) after taxation (607) (529) 

Net profit 728 489 

Prepared in accordance with section 402 of Book 2 of the Netherlands Civil Code. 



Financial statements 

Selected Financial statements of Rabobank Group and Rabobank Nederland are set out above under 

‘Historical Financial Information’. As Rabobank Nederland forms part of the Rabobank Group, the most 

relevant financial figures of Rabobank Group have been set out explicitly in this Offering Circular to provide 

a broader view on the financial position of Rabobank Nederland and its group, Rabobank Group. The full 

financial figures of Rabobank Group and Rabobank Nederland for the years ended December 31, 2003, 

2004 and 2005 are incorporated herein by reference. 

Auditing of historical annual financial information 

Regarding the historical financial information set out above under ‘Historical Financial Information’ save for 

‘Five years in figures’ we refer to the Auditors’ report to the consolidated financial data of Rabobank Group 

and the Auditors’ report to the unconsolidated financial data of Rabobank Nederland on page F101 of this 

Offering Circular. 

Age of latest financial information 

The financial information is dated at December 31, 2005. 

Interim and other financial information 

No interim financial information in respect of the Issuer is available subsequent to December 31, 2005. 

Significant change in the Issuer’s financial or trading position 

Except as disclosed under ‘Recent Developments’ on page 69 of this Offering Circular, there has been no 

significant change in the financial or trading position of the Issuer or of the Group, and there has been no 

material adverse change in the financial position or prospects of the Issuer or of the Group, since December 

31, 2005. 

MATERIAL CONTRACTS 

As of the date of this Offering Circular, we are not party to any contracts (not entered into in the ordinary 

course of business) that are considered material to our results, financial condition or operations. 

F100

THIRD PA RTY INFORMATION AND STATEMENT BY EXPERTS AND DECLARATIONS OF ANY 

I N T E R E S T 

The following two reports have been provided by Ernst & Young Accountants on request of Rabobank 

G roup and Rabobank Nederland. 

Auditors’ report to the consolidated financial data of Rabobank Gro u p 

The accompanying consolidated financial data as set out on pages F9 4 to F9 6 of this Offering Circ u l a r 

(Consolidated Balance Sheet of Rabobank Group, Consolidated Profit and Loss Account of Rabobank 

G roup and Cash Flow Statement of Rabobank Group) have been derived from the consolidated financial 

statements for the years ended December 31, 2004 and 2003 of Rabobank Group, as audited by us. The 

consolidated financial data are the responsibility of the Executive Board of Rabobank Nederland. 

In our opinion, the consolidated financial data for the years ended December 31, 2004 and 2003, as 

included in this Offering Circular on pages F9 4 to F9 6, are consistent, in all material respects, with the 

consolidated financial statements of Rabobank Group from which they have been derived. We issued 

unqualified auditors’ reports on these consolidated financial statements on M a rch 7, 2005 and March 4, 

2004 re s p e c t i v e l y. These auditors’ reports are included in the consolidated financial statements for the years 

re f e r red to, which form an integral part of this Offering Circ u l a r. 

U t re c h t , M a y 3 1, 2006 

For E rnst & Young Accountants 

C.G.J. de Lange 

P.J.A.J. Nijssen 

Auditors’ report to the unconsolidated financial data of Rabobank Nederland 

The accompanying unconsolidated financial data as set out on pages F9 7 t o F1 0 0 of this Off e r i n g 

C i rcular (Balance Sheet of Rabobank Nederland and Profit and Loss Account of Rabobank Nederland) have 

been derived from the financial statements for the years ended December 31, 2005, 2004 and 2003 of 

Rabobank Nederland, as audited by us. The unconsolidated financial data are the responsibility of the 

Executive Board of Rabobank Nederland. 

In our opinion, the unconsolidated financial data for the years ended December 31, 2005, 2004 and 

2003, as included in this Offering Circular on pages F9 7 t o F1 0 0, are consistent, in all material re s p e c t s , 

with the financial statements of Rabobank Nederland from which they have been derived. We issued 

unqualified auditors’ reports on these financial statements on M a rch 8, 2006, M a rch 7, 2005 and March 4, 

2004 re s p e c t i v e l y. These auditors’ reports are included in the financial statements for the years re f e r red to, 

which form an integral part of this Offering Circ u l a r. 

U t re c h t , May 31, 2006 

For E rnst & Young Accountants 

C.G.J. de Lange 

P.J.A.J. Nijssen 

F101

PRINCIPAL OFFICES OF THE ISSUER 

Coöperatieve Centrale Coöperatieve Centrale Coöperatieve Centrale 

Raiffeisen-Boerenleenbank B.A. Raiffeisen-Boerenleenbank B.A. Raiffeisen-Boerenleenbank B.A. 

(Rabobank Nederland) (Rabobank Nederland) (Rabobank Nederland) 

Croeselaan 18 Australia Branch Singapore Branch 

3521 CB Utrecht Level 7, Rabobank House 77 Robinson Road # 09-00 

The Netherlands 115 Pitt Street SIA Building, Singapore 068896 

Sydney NSW 2000 

Singapore 

Australia 

INDEPENDENT AUDITORS 

To Coöperatieve 

Centrale Raiffeisen-Boerenleenbank B.A. 

(Rabobank Nederland) 

Ernst & Young Accountants 

Euclideslaan 1 

3584 BL Utrecht 


DEALERS 

BNP PARIBAS 

Citigroup Global Markets Limited 

10 Harewood Avenue Citigroup Centre 

London NW1 6AA 

Canada Square 


Canary Wharf 

London E14 5LB 


Coöperatieve Centrale Raiffeisen 


Boerenleenbank B.A. 

One Cabot Square 

(Rabobank International) 

London E14 4QJ 

Croeselaan 18 


3521 CB Utrecht 



Daiwa Securities SMBC Europe Limited 

Peterborough Court 

5 King William Street 

133 Fleet Street London EC4N 7AX 

London EC4A 2BB 



J.P. Morgan Securities Ltd. 


125 London Wall 2 King Edward Street 

London EC2Y 5AJ 

London EC1A 1HQ 




Bracken House 

One Friday Street 

London EC4M 9JA 


UBS Limited 

1 Finsbury Avenue 

London EC2M 2PP 


Morgan Stanley & Co. International Limited 

5 Cabot Square 

Canary Wharf 

London E14 4QA 

United Kingdom

ARRANGER 


One Cabot Square 

London E14 4QJ 


FISCAL AGENT, PAYING AGENT AND CALCULATION AGENT 

Deutsche Bank AG, London Branch 

Winchester House 

1 Great Winchester Street 

London EC2N 2DB 


PAYING AGENT, TRANSFER AGENT, EXCHANGE AGENT AND REGISTRAR 

Deutsche Bank Luxembourg S.A. 

2 Boulevard Konrad Adenauer 

L-1115 Luxembourg 

PAYING AGENTS 

Coöperatieve Centrale 

Raiffeisen-Boerenleenbank B.A. (Rabo Securities) 

Amstelplein 1 

1096 HA Amsterdam 


REGISTRAR, TRANSFER AGENT AND EXCHANGE AGENT 

Deutsche Bank Trust Company Americas 

60 Wall Street 

27th Floor – MS NYC60-2710 

New York, New York 10005 

United States 

LUXEMBOURG STOCK EXCHANGE LISTING AGENT 

Deutsche Bank Luxembourg S.A. 

Corporate Trust and Agency Services 

2 Boulevard Konrad Adenauer 

L-1115 Luxembourg 

Luxembourg 

EURONEXT AMSTERDAM LISTING AGENT 


(Rabo Securities) 

Amstelplein 1 

1096 HA Amsterdam 

The Netherlands

LEGAL ADVISERS 

To the Issuer 

To Coöperatieve Centrale Raiffeisen- 

To Coöperatieve Centrale Raiffeisen- 



(Rabobank Nederland) Australia Branch 

(Rabobank Nederland) Singapore Branch 

in respect of Australian law 

in respect of Singapore law 

Blake Dawson Waldron 

Allen & Gledhill 

Grosvenor Place One Marina Boulevard a28-00 

225 George Street Singapore 018989 

Sydney NSW 2000 

Australia 

To the Dealers 

in respect of United States law 

in respect of Netherlands law 

Linklaters 

Linklaters 

One Silk Street 

WTC Amsterdam 

London EC2Y 8HQ Zuidplein 180 


1077 XV Amsterdam 

The Netherlands

Rabobank Nederland - Robeco.com

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