#1Ministry of Finance Dutch State Treasury Agency Investor presentation Mexico City Latest update: 29 May 2017#2Contents 1. Introduction 2. The economy and the budget 5 35 3. The Netherlands: fundamentally strong 4. The debt position 5. Funding plan 2017 12 17 21 Supplement I Current status after the elections 29 Supplement II Trade, housing, labour and pensions 32 Supplement III Interest risk framework 2016-2019 45 Supplement IV Supplement V Funding instruments 48 The DDA explained 53 2 Investor presentation Mexico City#3The Dutch Ministry of Finance 3 FI SE EE LV LT DK IE UK NE PL DE ES FR AT HU RO MT Tax and Customs Administration BG GR CY T&C Policy and Legislation Minister Secretary- General Budget Treasury Central Directorates Investor presentation DSTA Mexico City#4The Dutch State Treasury Agency 4 Agent Cash Management, Issuance and Trading Policy and Risk Management Treasury and Debt Operations Control, Accounting and Reporting • Founded in 1841 in Amsterdam • Moved to The Hague in 2009 • Part of the Ministry of Finance • . Autonomous decisions within a mandate: Compatibility: only the Finance Minister can borrow on behalf of the State ■ Minister granted this mandate to the DSTA • Main objective: to manage the State's debt efficiently and effectively and to meet the State's funding requirement by borrowing and lending money Investor presentation Mexico City#5The economy and the budget#6Projections: strong economic performance 6 Key economic figures 2015-2017 (% change, y-o-y) GDP growth Household consumption Capital formation Government consumption Export Import Unemployment (% of labour force) Inflation (HICP) 2015 2016 2017 2018 2.0 2.1 2.1 1.8 1.8 1.8 2.0 1.4 6.2 4.3 3.6 2.8 0.2 0.7 0.8 1.0 5.0 3.7 3.5 3.9 5.8 3.9 3.6 3.9 6.9 6.0 4.9 4.7 0.2 0.1 1.6 1.4 Source: CPB, Netherlands Bureau for Economic Policy Analysis, 24 March 2017 Investor presentation Mexico City#7GDP steadily increasing Change compared to a year before 4 3 2 1 0 LO -1 -2 וווויו 2010 Q1 2010 Q3 2011 Q1 2011 Q3 2012 Q1 7 . 2012 Q3 Source: Statistics Netherlands (CBS), May 2017 2013 Q1 2013 Q3 2014 Q1 2014 Q3 2015 Q1 Investor presentation 2015 Q3 2016 Q1 2016 Q3 2017 Q1 Mexico City#8Broad basis underlying growth 3% 2% 1% 0% -1% -2% -3% 2012 2013 2014 2015 2016 2017 2018 Household consumption Capital formation Government consumption Net exports GDP growth 8 00 Source: Calculations based on CPB projections, 24 March 2017 Investor presentation Mexico City#9Moving towards 60% debt and a balanced budget 70% 68% 2% 1% 66% 0% 64% -1% 62% -2% 60% -3% 58% -4% 56% -5% 54% -6% 52% -7% 50% -8% 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 EMU-debt (% GDP; LHS) EMU-balance (% GDP; RHS) 9 Source: Statistics Netherlands (CBS; for the year up to and including 2016), CPB (2017 - 2018) Investor presentation Mexico City#10Dutch fiscal position compares very well (2017) 180 Greece -4 EMU debt (% GDP) 160 10 140 Italy 120 Spain 00 France 80 60 60 40 40 20 -3 0 Finland Portugal Belgium Euro area Slovenia Ireland Austria Germany 0 Netherlands 1 Lithuania Latvia Luxembourg Estonia Budget deficit (% GDP) -2 -1 Slovakia Source: European Commission Spring forecast, March 2017 Investor presentation Mexico City#11The Netherlands: fundamentally strong 11#1210% 8% 6% 4% 2% 0% -2% -4% -6% Strong current account surplus Current account balance 2017 (% of GDP) Germany Netherlands Denmark Malta Iceland Sweden Ireland Slovenia Norway Luxembourg Source: European Commission Spring Forecast 2017, March 2017 Hungary Bulgaria Croatia Austria Italy Estonia Spain Belgium 12 Czech Republic Portugal Slovakia Greece Latvia Poland France Finland Lithuania Romania United Kingdom Serbia Investor presentation Mexico City#13GDP per capita among the highest in Europe Real GDP per capita (PPS, 2015, index) Spain Italy EU France Euro Area United Kingdom Germany Denmark Austria Netherlands Ireland 0 13 Source: Eurostat 20 20 40 40 60 60 60 80 100 120 140 160 180 Investor presentation Mexico City#14Among the most developed countries worldwide Top 15 countries in the Human Development Index (2015) Liechtenstein Sweden New Zealand Hong Kong, China (SAR) United States Canada 14 Iceland Ireland Netherlands Singapore Denmark Germany Switzerland Australia Norway 0,890 0,900 0,910 Source: United Nations Human Development Index 2016 0,920 0,930 0,940 0,950 0,960 Investor presentation Mexico City#15Among the most competitive countries worldwide Top 12 countries on the WEF Competitiveness Index Rank Country 15 1 2 3 4 Switzerland Singapore United States Netherlands LO 5 Germany 6 Sweden 7 United Kingdom 8 Japan 9 Hong Kong SAR 10 Finland 11 Norway 12 Denmark Source: World Economic Forum, 28 September 2016 Investor presentation Mexico City#16The debt position#17Debt outstanding Key figures at the end of April 2017 Instrument DSL (T-bonds) DSL in foreign currency DTC (T-bills) ECP outstanding Private loans Private loans in foreign currency* Cash Cash collateral 17 (€ mn) 310.223 14.810 4.060 590 1.334 14.345 Total debt outstanding * Debt of the Netherlands Antilles acquired by the Netherlands 345.362 Investor presentation Mexico City#18-00 18 45 40 35 30 25 20 15 10 5 Financing Dutch State debt in 2017 (€ billion) 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 OTR 3-5.5 2045 2046 2047 2028 2029 2030 2031 2032 2033 2034 2035 2036 Investor presentation Mexico City 2037 2038 2039 2040 2041 2042 2043 2044#19• • QE and DSLs Three Dutch institutions are eligible for the public sector purchase programme (PSPP) . Bank Nederlandse Gemeenten N.V. (BNG) Nederlandse Waterschapsbank N.V. (NWB) Nederlandse Financieringsmaatschappij voor Onwikkelingslanden N.V. (FMO) ECB buys approx. € 2.6 bn. per month of Dutch debt securities (from 1 April 2017 until at least 31 December 2017; before: € 3.8 bn) Average maturity of debt holdings is approx. 7.75 years (May 2017 data) • 19 DNB has a securities lending facility DSTA has a repo facility for PDs (lender of last resort) Investor presentation Mexico City#20Funding plan 2017#21Borrowing requirement 2017 Borrowing requirement (€ bn) Capital market redemptions 2017 42.5 Money market ultimo 2016 (excl. cash collateral) 18.2 Cash balance (- = surplus) -2.0 Cash collateral change during 2017 (+ = decline) Total borrowing requirement 2017 58.7 Source: DSTA Quarterly outlook Q2, March 2017. Next update: 31 May 2017 21 221 Investor presentation Mexico City#22Funding in 2017 Funding Capital market Money market ultimo 2017 excl cash collateral Total funding requirement 2017 Source: DSTA Quarterly outlook Q2, March 2017. Next update: 31 May 2017 • Money market is the primary buffer • Some flexibility on the capital market (target range) 22 22 (€ bn) 30-35 23.7 28.7 58.7 Investor presentation Mexico City#23Issuance in 2017 DSL New 10-year DSL (2027) On-the-run 5-year DSL (2022) New 7-year DSL (2024) Reopening longer dated off- the-run DSLS Indicative amount (€ bn) 15.0 7.0 Realized amount (€ bn) 8.0 7.4 5 - 7.5* 0 3- 5.5 2.1 Total DSL funding 30 - 35 17.5 * Will be reopened again in 2018 to reach at least € 15 bn Source: www.dsta.nl 23 23 Investor presentation Mexico City#24Ensuring sufficient liquidity in secondary markets • • Annual issuance of a new 10-year bond and a shorter dated bond (usually a 3- or 5-year bond); in 2017 a new 7-year bond Raising the outstanding amounts of bonds up to and including 10-year bonds to at least € 15 bn within 1 year of issuance Quotation obligation for Primary Dealers to ensure tradable prices to be available at all times Repo facility available to Primary Dealers ('lender of last resort') 24 24 Investor presentation Mexico City#2525 25 Dutch B/O spreads relatively tight B/O spreads for German Bunds and Dutch State Loans (eurocents) 120 100 80 60 40 20 0 2-Jan-13 2-Mar-13 2-May-13 2-Jul-13 2-Sep-13 2-Nov-13 2-Jan-14 2-Mar-14 2-May-14 2-Jul-14- 2-Sep-14 2-Nov-14 2-Jan-15 2-Mar-15 2-May-15 2-Jul-15 2-Sep-15 2-Nov-15 Source: MTS, April 2017 DBR 6.5-15 yrs DSL 6.5-15 yrs 2-Jan-16 2-Mar-16 2-May-16 2-Jul-16 2-Sep-16- WW 2-Nov-16 2-Jan-17 2-Mar-17 Investor presentation Mexico City#26Holdings of DSLS (€ bn) 180 160 140 120 100 80 60 40 40 20 20 250 Other 200 Dutch Central Bank (DNB) 150 Insurers Pension funds and 100 investment funds Banks 50 0 0 2014Q4 2015Q1 2015Q2 2015Q3 2015Q4 2016Q1 2016Q2 2016Q3 2016Q4 Source: DNB, April 2017 26 Foreign investors (RHS) Investor presentation Mexico City#27Diversified investor base: most recent 10-year DDA 15% 16% 27 ■Banks and Trusts (25%) Asset and Fund 8% 4% 6% 7% Managers (18%) 25% ■Central Banks, Supranationals and Agencies (17%) 6% Treasuries and ALM accounts of Banks (16%) ■Hedge Funds (15%) 10% 18% Pension Funds and Insurance Companies 17% (7%) Other Trading Desks (2%) ■United Kingdom (34%) ■Netherlands (21%) ■Switzerland (11%) 34% United States (10%) ■Germany (6%) ■France (6%) 11% 21% ■ Poland (4%) Other (8%) Investor presentation Mexico City#28Issuer Ratings Key transaction facts The State of the Netherlands Aaa/AAA/AAA Dutch State Treasury Agency Transaction review: DSL 0.75 % 15 July 2027 Overview Allocated size Total book € 5,697,926,000 € 13,009,626,000 • Today the DSTA launched its new 10-year benchmark bond via a Dutch Direct Auction (DDA). Bid-to-cover 2.28 Issuance yield 0.707% Issuance price 100.43 Maturity 15 July 2027 要 Coupon 0.75 % Settlement 9 February 2017 Law Dutch law, CACs ISIN NL0012171458 Listing Euronext AMS • • • The book opened at 10.00 CET with an initial spread guidance of +33 to +36 basis points over the German Bund maturing on 15 February 2027. Bids came in steadily from the start. After about 15 minutes, the book was already in excess of € 5 billion. Less than an hour after opening the order book reached a volume in excess of €9 billion. Half an hour later the spread guidance was narrowed to +33 to +34 basis points. The order book was closed at 12:00 CET with a total bid volume of € 13 billion. An amount of € 5.7 billion was allocated at a uniform cut-off spread of +33 basis points over the reference bond. Of the allocated amount 58% was allocated towards 'real money' accounts. The geographical distribution of the allocation was balanced, a large part of the issuance was allocated to the United Kingdom, The Netherlands, Switzerland and the United States. The DSL 0.75 % 15 July 2027 will be reopened several times in order to reach an outstanding amount of at least € 15 billion before the end of 2017. Liquidity will be guaranteed through a repo facility available to Primary Dealers. Investor type distribution (%) The new 10-year DSL: the DSTA issued € 5,697,926,000 billion in the DSL 0.75 % 15 July 2027 www.dsta.nl 15% +31 70 342 4099 16% [email protected] Geographical distribution (%) United Kingdom (34%) 34% Netherlands (21%) ■Switzerland (11%) United States (10%) Banks and Trusts (25%) 8% 7% 25% Asset and Fund Managers (18%) 4% 6% Central Banks, Supranationals and Agencies (17%) 6% Treasuries and ALM accounts of Banks (16%) 10% Hedge Funds (15%) 18% Pension Funds and Insurance Companies (7%) 17% Other Trading Desks (2%) Germany (6%) France (6%) 11% Poland (4%) 21% ■Other (8%)#29Dutch State Treasury Agency Issuer Ratings Key transaction facts Allocated size Total book The State of the Netherlands Aaa / AAA / AAA €4,812,112,000 € 11,709,112,000 -0.233% 101.32 " Bid-to-cover 2.43 Issuance yield Issuance price " Maturity 15 January 2022 Coupon 0% Settlement 9 June 2016 Law Dutch law, CACS ISIN NL0011896857 Listing Euronext AMS " Transaction review: DSL 0% 15 January 2022 Overview Today the DSTA launched its new 5-year benchmark bond by Dutch Direct Auction (DDA). The book opened at 10.00 CET with an initial spread guidance of +11 to +14 basis points over the German Bund maturing on 4 January 2022. Bids came in steadily from the start. Around 10:15 CET bids exceeded € 5 billion. At 10:40 CET the DSTA narrowed the spread guidance to +12 to +13 basis points over the reference bond. The order book was closed at 11:40 CET with a total bid volume of € 11.7 billion. An amount of € 4.81 billion was allocated at a uniform cut-off spread of +12 basis points over the reference bond. Of the allocated amount, 40% was allocated towards 'real money' accounts. The geographical distribution of the allocation was balanced, a large part of the issuance was allocated to the United Kingdom, The Netherlands and the United States. 'Banks and trusts', 'Treasuries and ALM accounts of banks' and 'Hedge funds' were the most important investor types, representing 85% of the allocated amount. The DSL 0% 15 January 2022 will be reopened several times in order to reach an outstanding amount of at least € 15 billion within a year after this DDA. Liquidity will be guaranteed through a repo facility available to Primary Dealers. The new Dutch 5-year DSL: today the DSTA issued € 4.81 billion in the DSL 0% 15 January 2022 www.dsta.nl +31 70 342 4082 [email protected] 23% Investor type distribution (%) 2% 13% Banks and trusts 37% Treasuries and ALM accounts of banks 8% Hedge funds Asset and fund managers Geographical distribution (%) 7% 4% 6% 22% Central banks, agencies 24% and supranationals 25% 29% United Kingdom Netherlands United States France Italy ■Spain Other#30Supplement I Current status after the elections#31Parliamentary elections were held on 15 March 2017 31 Elections Political parties presented their election programmes • Most election programmes were assessed by CPB on its economic, budgetary and social effects •15 March: elections were held for the House of Representatives (Lower House) for a total of 150 seats (proportional representation) • Procedures following the elections mainly based on unwritten law Consultation Process • An 'informateur' was appointed by parliament • The informateur holds talks with political leaders of all parties elected into parliament • The informateur assesses possible coalition governments, based on election programmes • Process may take a number of months; process is still ongoing Investor presentation Mexico City#32Parliamentary elections were held on 15 March 2017 Coalition agreement • In principle, an agreement has to be reached between political leaders representing a minimum of 76 seats • A draft coalition agreement is composed for a 4-year period, including a budgetary paragraph and a set of fiscal rules •The CPB assesses the economic and budgetary consequences of the coalition agreement •The draft coalition agreement has to be endorsed by the political parties concerned Government Formation 32 32 • A so-called "Formateur" is appointed by parliament Historically, the formateur is the incoming Prime Minister • The formateur forms a new government and will approach prospective Ministers • Prospective ministers pledge their support for the draft coalition agreement • As soon as the new government takes office, the coalition agreement becomes final Investor presentation Mexico City#33Supplement II Trade, housing, labour and pensions#34Financial sector interventions 1. Nationalizations: ABN Amro and ASR (2008, as part of nationalization of Fortis NL), SNS REAAL(2013) Financial institutions which are or will be privatized: • • • . • REAAL (the former insurance part of SNS REAAL) was sold in early 2015 ABN Amro - IPO in November 2015; 23% was sold for € 3.8 bn; an additional 7% was sold in November 2016 (€ 1.3 bn); remainder will be sold in the coming years ASR - IPO in June 2016; 36% was sold for €1.1 bn; in January and April 2017 13.6% and 13.3% were sold for a total of €1 bn. The remaining 36.8% will be sold in the upcoming years Volksbank (former SNS bank; the former banking part of SNS REAAL) - privatization in due time Propertize (the former real estate part of SNS Bank) was sold on 27 September 2016 for € 0.9 bn 2. Capital support (2008) to ING (€ 10 bn) and AEGON (€ 3 bn) is repaid in full 3. Guarantee scheme for medium-term bank debt was wound down at the end of 2014 4. Alt-A portfolio (US-RMBS) of ING was sold end 2013 / early 2014 34 34 Investor presentation Mexico City#3535 55 Structural reforms Housing market • Reduced mortgage interest tax deductibility (new and existing loans) • New mortgages to be redeemed in full during the lifetime of the loan • Property transfer tax lowered from 6% to 2%, maximum LTVs and LTI's down • Rents will be more market-based, and increased more for relatively higher incomes Pensions/retirement • Retirement age increased to 67+ from 2021 onwards • The maximum pension accrual qualifying for tax relief curtailed Health care • More long-term care will be provided outside homes for the elderly, by local governments • More limited health insurance coverage, higher contributions by the insured • Increased competition in the health care sector Labour market • Dismissal procedures simplified, increases labour market flexibility • Access to unemployment benefits more stringent, stimulating labour supply Investor presentation Mexico City#36Housing market recovery 60% 10% 8% 40% 6% 4% 20% 2% 0% 0% -20% TNII וי -2% -4% -6% -40% -8% -10% -60% 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Transactions (LHS) Prices (RHS) Source: Statistics Netherlands (CBS) 36 36 Investor presentation Mexico City#3737 -50 -100 -150 2012 Jan Labour market recovery 200 150 100 50 0 April July Oct 2013 Jan April July Oct 2014 Jan April Employment (thousands, y-o-y, LHS) Source: Statistics Netherlands (CBS) July Oct 2015 Jan April July Oct 2016 Jan April July Oct 2017 Jan Unemployment (% labour force, RHS) Investor presentation Mexico City 5% 6% 7% 8%#38Unemployment is low and declining further Unemployment rate (March 2017, % of labour force) 38 Germany Netherlands Austria Denmark Sweden Ireland Belgium European Union Euro area Finland France Italy Spain 0% 2% 4% 6% 8% 10% 12% 14% 16% 18% 20% Source: Eurostat Investor presentation Mexico City#392015 2007 1995 Households have strong asset position Household assets and liabilities (% of GDP) 0 100 200 300 400 500 2015 2007 1995 600 100 200 300 400 500 600 Net assets ■Mortgage debt ■Other debt ■Pension assets Housing assets Deposits Other assets Source: Dutch Central Bank (DNB), Budget Memorandum 2017 39 Investor presentation Mexico City#40Pension assets internationally France Germany Brazil Hong Kong Ireland Japan South Africa Canada UK US Switzerland Australia Netherlands 40 0% 20% 40% 60% 80% 100% 120% 140% 160% 180% Source: Willis Towers Watson, Global Pension Asset Study, 2017 Investor presentation Mexico City#41Ageing Population Y-o-y change in population 6% 5% 4% 3% 2% 1% 0% -1% -2% 2008 2009 2010 2011 2012 2013 2014 2015 Younger than 20 years 20 till 40 years -40 till 65 years 65 till 80 years 80 years and older Source: Statistics Netherlands (CBS) 41 Active and retired participants and 'grey pressure' (people 65 years and older/people between 20-65 years old) 7.000 6.000 5.000 4.000 3.000 2.000 1.000 H 2008 2009 2010 2011 2012 2013 2014 2015 Active Participants (thousands, LHS) Retired Participants (thousands, LHS) -Grey Pressure (RHS) Source: Statistics Netherlands (CBS) Investor presentation Mexico City 32% 30% 28% - 26% 24% 22% 20%#42Pension funds 115% Pension fund cover ratios 110% 105% 100% 95% 90% 85% 2010 Jan July 2011 Jan July Source: Dutch Central Bank (DNB) 2012 Jan July 2013 Jan 42 July 2014 Jan July 2015 Jan July 2016 Jan July 2017 Jan Pension fund holdings at the end of 2015 2% 3% 3% 5% ■Direct real estate 42% Source: Statistics Netherlands (CBS) Investor presentation 45% ■Stocks and other equity ■Debt instruments Financial derivatives Long term loans Mexico City Other investments#43Export performance by product category (2016) 43 ■Machinery and transport equipment ■Chemicals and related product, n.e.s. Food and live animals ■Mineral fuels, lubricants relat. mat. Miscellaneous manufactured articles ■Manufactured goods classified chiefly by material ■Crude materials, inedible, except fuels ■Beverages and tobacco Animal and vegetable oils, fats and wax ■Commodities not classified elsewhere Source: Statistics Netherlands (CBS) Investor presentation Mexico City#44Export performance by country Share Rank Country 2016 12 Germany 22,7% 2 Belgium 10,1% Split of exports: EU and non-EU (% of total) 3 United Kingdom 9,1% 80% 4 France 8,2% 70% 5 Italy 4,2% 19 6 USA 4,1% 60% 7 Spain 3,0% 50% 8 Poland 2,5% 40% 9 China 2,3% 30% 10 Sweden 2,0% 20% 11 Czech Republic 1,6% 12 Denmark 1,4% 10% 13 Switzerland 1,4% 0% Total EU Total non-EU 14 Turkey 1,2% 15 Austria 1,2% Source: Statistics Netherlands (CBS) 44 Investor presentation Mexico City#45Supplement III Interest risk framework 2016 - 2019#4646 46 Interest rate risk framework 2016 - 2019 Framework based on two measures of risk Long term risk measure: duration (i.c. weighted average maturity) Short term risk measure: 12-month forward looking refixing amount Duration goal of 6.4 years at the end of 2019 within a margin of ±0.25 years • 12-month forward looking refixing amount end of year needs to stay below 18% debt ⚫ 2016 results " Year end duration of 5.60 years ■ Year end refixing amount of 17.0% of debt ⚫ 2017 targets • ■ ■ Year end duration goal of 6.0 years Year end refixing amount below 18% of debt Investor presentation Mexico City#47Consequences 47 • Funding strategy remains unchanged from before . Swaps are a fine tuning instrument • Issuance more important in interest risk management Option to revise strategy Investor presentation Mexico City#48Supplement IV Funding instruments#49Funding instruments: the capital market . Dutch State Loans (T-bonds) Focus on issuance in EUR Maturities: focus on 3- or 5- years and 10-years; in 2017: 7-year DSL Commitment to the long end of the curve (up to 30-year segment) Auctions on fixed dates: 2nd (and if needed 4th) Tuesday of the month 49 Quarterly issuance calendars (Q3 release: 23 June 2017) Dutch Direct Auctions for new medium and longer-dated DSLs Benchmark sizes minimum € 15 bn. per DSL and € 10 bn. for 30-year DSLS Buy-backs for cash management purposes (up to 24 months remaining maturity) Possibility of issuance of USD Dutch State Bonds Investor presentation Mexico City#50Funding instruments: the money market . • Dutch Treasury Certificates (T-bills) Maturities: 3 to 6 months Auctions: twice a month on the first and third Monday Commercial Paper (CP) • Maturities up to 1 year (focus on up to 3 months) In EUR, USD, GBP, CHF and NOK • No auctions, initiative with counterparty • Foreign currencies fully hedged Deposits ("Cash") · Borrowing short term; large amounts if necessary • Lending: unsecured and secured (reverse repo: buy-sell-back) • Also in USD (borrowing and lending) 50 50 Investor presentation Mexico City#51Funding strategy 51 • Transparency: calendars, press releases, website • Continuity predictability: no surprises, consistency in policies and operations, live up to commitments Tradability/liquidity: ◉ Quotation obligations for PDs Repo facility for PDs. Minimum outstanding volumes of bonds Investor presentation Mexico City#52Primary Dealer group 2017 ABN AMRO Bank Commerzbank HSBC France Natixis Nordea Barclays Deutsche Bank Citibank Goldman Sachs ING Bank Jefferies NatWest Markets Nomura Rabobank Société Générale 62 52 Investor presentation Mexico City#53Supplement V The DDA explained#54A short overview • • . • Rule-based auction → all investors receive equal treatment Primary auction with direct participation of end-investors A single uniform price winner's curse avoided Bids can be placed via Primary Dealer(s) of choice and orders can be split via several dealers The DSTA is the sole book runner - Level playing field among all Primary Dealers Confidential participation of investors PDs must sign a DDA Allocation and Price Compliance Statement as indicated in the General Conditions for PDs (www.dsta.nl/english/Subjects/Primary_Dealers) 54 The DDA rules can be found on our website: www.dsta.nl Investor presentation Mexico City#55Bidding • Bids are placed at increments of 0.5 bps to the reference bond or 'at best' • Maximum bid of € 300 million per spread point; . . 55 An investor may split orders among Primary Dealers up to the maximum allowed (€ 300 million per spread) There is no pot in the DDA: Primary Dealers are rewarded for overall DDA performance Bids 'at best' are at all times equal to bids at the tightest spread Investor presentation Mexico City#5656 56 Investor classification Real money clients Asset and Fund managers - Central banks - Agencies - Supranationals Insurance companies Pension funds Private banks Treasuries/ALM accounts of banks Other clients Hedge funds All accounts of banks, except: - Treasury/ALM accounts of banks - Private banks Other trading desks . Focus on real money clients Allocation: Real Money clients receive priority at the cut-off spread Safeguarding instant liquidity • DSTA reserves the right to raise the allocation to 'Other clients' up to 35% of the total allocated amount Investor presentation Mexico City#57Mechanics of allocation: an example Transaction Details Spread Target size 17 to 18 bp € 4 - 6 bn Book size € 10.5 bn Spread At best 17 17.5 18 Real money 1500 1000 1500 1500 Other 1000 2000 1000 1000 Order book Total 2500 3000 2500 2500 Cumulative 5500 8000 10500 57 Investor presentation Mexico City#58Mechanics of allocation - scenario 1 Spread At best 17 17.5 18 Real money 1500 1000 1500 1500 Other 1000 2000 1000 1000 Order book Total 2500 3000 2500 2500 Cumulative 5500 8000 10500 Allocated amount: € 6000 Uniform cut off: +17.5 Allocation at cut-off: Real Money 33 % Others 0 % Spread At best 17 17.5 18 Real money 1500 1000 500 0 Allocation Other 1000 2000 0 0 Total 2500 3000 500 0 Cumulative 5500 6000 58 Investor presentation Mexico City#59Mechanics of allocation - scenario 2 Spread At best 17 17.5 18 Real money 1500 1000 1500 1500 Other 1000 2000 1000 1000 Order book Total 2500 3000 2500 2500 Cumulative 5500 8000 10500 Allocated amount: € 5000 Uniform cut off: +17 Allocation at cut-off: Real Money 100 % Others 83 % Spread At best 17 17.5 18 Real money 1500 1000 0 0 Allocation Other Total 833 1667 0 0 2333 2667 0 0 Cumulative 5000 59 Investor presentation Mexico City#60Contact Details . Website: www.dsta.nl • • E-mail: [email protected] Twitter: @dsta_nl . Bloomberg: DSTA <GO>