Funding strategy

LeasePlan – a regulated Dutch bank – aims for matched financing from a widely diversified funding base. With this as an underlying strategy LeasePlan adapts to its current financial surroundings to ensure the availability of cost-effective and sustainable matched funding to meet the ongoing liquidity needs for the group. LeasePlan avails of a centralised treasury centre that arranges and manages LeasePlan’s funding programmes and concludes LeasePlan’s funding and financing transactions with group entities and external counterparts in the financial markets.

Matched funding profile
LeasePlan’s funding strategy is built on its solid matched funding policy. Following this policy, the maturity profile of LeasePlan’s current funding is aligned with the maturity profile of its current lease portfolio. Funding needs are therefore limited to the financing of new originated leases only.

Diversified funding strategy
LeasePlan pursues a diversified funding strategy in order to ensure funding to be available at all times. LeasePlan’s main funding sources are categorised as follows:

• Senior unsecured
• Securitisation
• Retail deposits
• Bank lines

Senior unsecured
In Debt Capital Markets LeasePlan has successfully established an independent funding platform and to date has issued in multiple currencies as well as formats (both structured and vanilla) off its €15 billion EMTN programme attracting a wide variety of investors from numerous jurisdictions in both public and private format. This level of diversification is a good match for LeasePlan's diversified global operations which create a natural demand for the proceeds of the majority of these foreign currency bonds allowing LeasePlan to provide intercompany funding directly to its subsidiaries.

In addition to its €15 billion EMTN programme, LeasePlan has successfully further diversified its investor base in 2012 by introducing a US$5 billion MTN (144A) programme in the US. Next to these programmes, LeasePlan has a number of alternative unsecured funding sources including an A$2 billion Kangaroo programme, German promissory notes (Schuldscheine) and a short term funding mix that incorporates a €3 billion euro commercial paper program and a €2 billion Belgian CD programme.

Securitisation
LeasePlan has established a strong securitisation franchise under its Bumper-programme. LeasePlan is targeting for placement of the notes issued under this programme with investors, either by public or private placement. Since 2006, it has concluded 5 transactions in 3 different jurisdictions (Netherlands, Germany & UK) under this programme and created a total of close to €4 billion of AAA-rated notes. LeasePlan is on an ongoing basis analysing lease portfolios from other jurisdictions to continue this process.

Retail deposits
In February 2010 LeasePlan used its Dutch banking licence to further expand its avenues of funding by setting up 'LeasePlan Bank', an online bank in the Netherlands focussing on the Dutch retail deposit market. LeasePlan Bank offers both flexi as well as term deposits. Since its start, LeasePlan Bank has granularly increased the level of funding stemming from retail deposits to its current level of approximately 20% of LeasePlan’s balance sheet total.

Bank lines
LeasePlan has a strong relationship with its core banking group. These banks, together with some local banks, provide LeasePlan with bilateral bank lines to fund operations in countries where fiscal regulations prohibit intercompany funding from LeasePlan’s centralised treasury centre or make it commercially not viable. Besides bilateral bank lines the core banking group has provided LeasePlan with a €1.250 billion 3 year committed facility (maturing in December 2015).

Liquidity position
LeasePlan maintains healthy liquidity buffers in order to secure an ongoing business in periods of severe stress in financial markets. Its liquidity buffers consist of cash balances as well as €2.625 billion in committed facilities. Besides the abovementioned committed facility provided by LeasePlan’s core banking group, LeasePlan has also in place a 3 year committed facility with its shareholder VW AG for a similar amount (maturing in December 2015).