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Rabobank Pays to Sell First Basel III-Compliant Tier 1 Debt

Rabobank Nederland, the Dutch lender that has the highest ratings of any private European bank, priced the first capital notes that meet new regulations, showing the extra costs faced by lenders.

Its $2 billion of undated Tier 1 bonds, callable after 5 1/2 years, were priced to yield 8.4 percent. The notes comply with so-called Basel III rules that mean they can be written down if Rabobank’s equity capital ratio sinks, or may sink, below 8 percent, according to the terms of the deal.