Notification to holders of FrieslandCampina free member bonds

1 September 2011

Revised conditions governing free member bonds and extension and amendment of the liquidity agreement between Royal FrieslandCampina N.V. and Rabobank.

FrieslandCampina dairy farmers and former dairy farmers who are part of the members’ group can buy and sell Royal FrieslandCampina N.V. free member bonds in an internal market. When these bonds were first introduced in 2008, one of the legal precursors of Royal FrieslandCampina N.V. concluded a liquidity agreement with Rabobank Nederland Participatiemaatschappij B.V. (‘Rabobank’) to absorb any frictions between supply and demand in the internal market up to (in principle) 15 October 2011. The Executive Board of Royal FrieslandCampina N.V. has now decided to extend this liquidity agreement for a three-year period starting 15 October 2011 and to make various amendments to both the agreement with Rabobank and the conditions governing FrieslandCampina bondholders.

They include the following:

  • The upper limit of the Rabobank facility is lowered from EUR 50 million to EUR 25 million per annum. Since 2008, the maximum amount drawn under the facility at any time has been EUR 16 million. The Executive Board therefore considers a reduction of the facility to be appropriate.
  • The payments to Rabobank are reduced accordingly.
  • Rabobank will be entitled to terminate the liquidity agreement if the total nominal value of free member bonds to be newly issued exceeds EUR 100 million after the date on which the proposed extension takes effect.
  • The interest rate margin on the free member bonds over six-month Euribor is increased by 0.5% (from 2.5 to 3%) retrospectively to 1 June 2011. This change in the conditions governing the bonds has previously been decided and has already been notified to members.
  • The definition of the term ‘performance premium’ has been clarified. 
  • The address of Royal FrieslandCampina N.V. has been changed to the current address: Stationsplein 4, Amersfoort.