1. Corporate Bond Issuance in Euroclear International Securities Services Philippe Laurensy, Euroclear Euroclear Collateral Conference May 2014

2. Agenda Corporate Bond Issuance Evolution Euroclear as Issuer CSD
Issuance overview through Euroclear

3. Corporate Bond Issuance Evolution

4. Financing Options Raise Equity Bank Financing Capital Markets
Advantages
Performance driven profit sharing
No fixed costs
Small cap markets
Flexible borrowing
Well established market
Acknowledged expertise
Predictable cash flow
Sophisticated and more liquid market
Robust Investor base
Predictable cash flow
Tax effectiveness
No influence on corporate governance
Disadvantages
Competitive pricing
Corporate governance
Banks deleveraging
Rates set by lender
Reduced lending appetite due to increased capital costs
Syndicated loans less liquid
Increased regulation
Limited access for small/lower rated issuers

5. Growth of International Corporate Bonds 2008-2013
Bond Issuance Globally
Bond Issuance with Euroclear Group
The left side graph represents global bond issuance in the world. The right side graph represents bond issuance within Euroclear Group (ICSD + 6 sister CSDs)
You will clearly see the growth of corporate bond issuance in comparison with other issuing entity profiles.
Source: Dealogic Nov Outstanding volumes in EUR equivalent millions
International debt (Dealogic definition): where the borrower is an off-shore entity or if the security is governed by the rules of more than one market or when the security is a cross-border instrument
Source:

6. Corporate Bond Issuance Corporate entities will continue to be the main drivers of economic growth in the medium and long term
What do you need ?
Lowest possible cost of funding
Secure funding
Large scope of instruments
Low cost to market

7. Corporate Bond Issuance
Financial markets bring together:
Issuers seeking funding to meet their business targets
Investors seeking investment returns with well established cash flows
Business growth results in:
Expansion from domestic to international market focus
Increasing multi-currency funding needs
The search for a broader investor base
International bond markets facilitate cross border participation and trading flexibility for market participants, globally
International bond markets enable issuer to access a global pool of investors - not limited to domestic sources as bank loans tend to be. This global coverage is essential for the scale of funding and forex management needed by international conglomerates This vital source of funding develops gives issuers in the developed world access to emerging markets economies and growing pools of investment in Asia, South America, Middle East.

8. Euroclear as Issuer CSD8

9. Euroclear Group Today >€24 trillion >900,000 >99%
Assets in custody
>99%
European domestic debt coverage
>900,000
Securities covered
>2000 Institutional clients from 90 countries
>1 million
Transactions settled
per day
>€570 trillion
Transactions settled
2013 data
number of eligible secs for Jan'14: 1,167,338
AA+
Rating by S&P and
Fitch for the past
10 years
>€700 billion
Collateral Highway
transactions daily 53
Settlement
currencies
2013 data
ST008 9

10. Euroclear Around the World…
We serve clients in their own language across all time zones
Locate the various (I)CSD, Rep offices and the Branch office of Hong Kong
Complementing its role as the premier ICSD, Euroclear Bank also provides CSD services to a number of domestic markets. Euroclear CSDs provide the markets with local securities settlement, i.e. stock exchange and Over-The-Counter (OTC) – and custody services, which vary from market to market, depending on the local market conditions and regulations.
A brief history of the evolution of the Euroclear Group:
Euroclear France, the CSD of France joined the Euroclear group in January 2001 (former Sicovam).
Euroclear Nederland, the CSD of The Netherlands, joined the Euroclear Group in May 2002 (former Necigef).
Euroclear UK & Ireland Limited, CSD of the United Kingdom and for Irish equities, joined in September 2002 (former CREST).
Euroclear Belgium, CSD of Belgium, joined the group in January 2006 (former CIK).
Euroclear Sweden, CSD of Sweden (former VPC) and Euroclear Finland (former APK) also joined the group recently in November 2008.
Euroclear acquired EMXCo in January EMXCo operates the EMX Message System, which is the de-facto standard for fund-order routing in the United Kingdom and provides order-routing services throughout Europe. This is an important step in Euroclear’s strategy to improve the efficiency of both domesticand cross-border funds processing.
In April 2008, Euroclear Bank has reinforced its local presence in Hong Kong by creating a new operations centre, delivering a wide range of operational services during the Asian time zone to clients in the Asia-Pacific region, the Euroclear Bank SA/NV Hong Kong Branch.
Next to this Euroclear Bank also has representative offices where clients can find a commercial group in order to assist them in their own language and time zone. These rep offices can be found in New York, Frankfurt, Tokyo, Beijing and Singapore.
In April 2009, Euroclear acquires Xtrakter, owner of the TRAX trade matching system for fixed-income, repo, equity and derivatives transactions, which has an established track record in providing innovative, secure and reliable systems for the financial services sector.
TRAX has been awarded Approved Reporting Mechanism (ARM) status by the Financial Services Authority (FSA) of the United Kingdom, Autorité des Marchés Financiers (AMF) of France and the Authority for the Financial Markets (AFM) of the Netherlands in conjunction with Article 25 of the Markets in Financial Instruments Directive (MiFID), and helps clients comply with the National Bank of Belgium’s (NBB) reporting obligations in Belgium. Xtrakter is also authorised by the FSA as a Service Provider. Currently, TRAX processes over 2 million transactions daily on behalf of its trade reporting subscribers.
Xtrakter also provides a wide range of market (pricing) data for approximately 12,000 international securities and internationally traded government bonds, as well as securities reference data for more than 150,000 government bonds, corporate bonds, medium-term notes and private derivative issues 10 10

11. Issuance Overview through Euroclear11 11

12. Why International Securities ? Benefits
Corporate issuers
Your investors
Lowest cost of funding
Large customer base and direct access to the buy side
Robust and well accepted procedures for all asset classes, including multi-listing, multi-currency, multi-governing laws
Simultaneous offering to worldwide global investors
Single point of contact / relationship for the issuer for ease of information and process flows
Full asset servicing for coupon payments, tax certifications, legal certifications, corporate events, etc
Full asset optimisation to leverage triparty and banking services
Single point of entry to global range of trading partners
Internationally recognised asset protection
Low cost to market

13. Why Euroclear? Local Worldwide
We help you move from a local to a worldwide issuance and investor base target
Local
Worldwide
Limited to local jurisdiction and governing laws
Limited currencies or swaps required
Multiple agents required for issuance and asset servicing
Limited investor base
One standard for multi legal jurisdiction and framework
Raise funds in the currency of your choice
Single agent point of contact through lifetime of security
International investor access

14. How to Issue International Securities ?
Involve Euroclear when discussing your new issues with your legal counsel and arrangers
Let us know what is important to you:
Worldwide distribution
Multi-currency options
Business intelligence
We will assist you in finding the optimal structure for your needs

15. International Securities A wide range of financial instruments
Issuance regulations we handle
Sec Reg
Reg S / 144A
144A 3c7
REG D
Fixed Income (in Nominal):
Medium Term Notes (MTNs)
(Euro) Bonds
(Euro) Commercial Paper
(Euro) Certificates of Deposit
Notes
Convertible
Collateralised Debt Obligations
Collateralised Mortgage Obligations
Asset Backed Securities
Mortgage Backed Securities
Global Depositaries Notes
Reverse Convertible Bonds
Equity Linked Notes
Risk Linked Notes
Treasury Bills
Debentures
Extendable Bonds
Sukuks (Islamic Financing)