FUNDING FMO is the Dutch development bank. The Dutch State guarantees FMO’s notes via an explicit issuer guarantee.
Founded in 1970, FMO is a public-private development bank. We have investments in more than 85 countries, offering private sector companies and financial institutions in developing countries a variety of financial products, as well as expertise and access to our networks. With a committed portfolio of over EUR 15 bln, FMO is one of the larger bilateral private sector development banks globally.
FMO has an annual funding need of EUR 2-3 bln. FMO strives to achieve diversification in the markets, geography, investor types, and tenor of its funding. FMO funds itself in public markets and through private placements.
Treasury has defined the EUR and USD market as the strategic funding currencies for FMO. Furthermore, we attract funding in various currencies under our Issuance Programs.
The Agreement with the Dutch State includes two important articles from an investor point of view:
Art. 4: Maintenance Obligation: The Dutch State is committed to making sufficient financial resources available to FMO in order to meet its prudential requirements.
Art. 5: Financial Security Obligation: to prevent FMO from failing to meet its financial obligations with a commitment from the Dutch State to provide “timely” support and a “direct, unconditional and irrevocable” payment obligation once triggered. Commitments include funding raised in capital markets.
The Agreement with the Dutch state is valid for an indefinite period and may be cancelled subject to a twelve-year notice period. In practice FMO will not issue debt projects beyond 12 years.
In addition, the Agreement with the Dutch State includes:
The Dutch government is our major shareholder, holding a 51% stake. Other shareholders include large Dutch banks (41%) and employers’ associations, trade unions, and individual investors (8%). We comply with internationally accepted banking standards and are supervised by the Dutch Central Bank.