Forum for Science, Industry and Business

Sponsored by:     3M 
Search our Site:

 

KfW defies challenging market

09.07.2008
First-class credit quality offers investors worldwide a safe haven
Funding volume to increase slightly in 2008
Sustainable management of KfW's financial investments

In the first half of 2008 KfW successfully defied the very volatile international capital markets with its funding strategy. This was stated by Dr. Frank Czichowski, treasurer of KfW Bankengruppe, at today's press conference in London on the German credit institution's capital market activities.

KfW funds its promotional lending business by issuing debt instruments, and at the end of 2007 it had expected funding needs of around EUR 70 billion for this year. Despite good news from the German economy, the market environment has been considerably more difficult than in the past as a result of the financial market crisis with all the related turbulence and pronounced volatility. "A flexible and transparent funding strategy has always been KfW's trademark; beyond this the key to success this year lies in diligent timing for debt issues as well as in choosing the proper maturity, and in what has been confirmed by market observers to be a wary and fair pricing of KfW securities", explained Czichowski.

In the first six months of this year KfW has already raised EUR 46.9 billion in over 200 individual transactions in 22 different currencies; this is the liveliest funding activity ever in a comparable period of time. The main currencies were the euro (16.9 billion, 36%) the US dollar (equivalent of EUR 16.7 billion, 36%) and the pound sterling (equivalent of more than EUR 8.3 billion, 18%), which has firmly established itself as the third core currency.

Eight benchmark bonds were issued in the first half alone. In the euro segment a 3-year and a 10-year benchmark were issued in a volume of EUR 5 billion each. In the USD segment KfW issued global bonds of 3-, 5- and 10-years twice, with volumes of no less than USD 3 billion each. Thus, more than 50% of the funding in the first six months is made up of large-volume and highly liquid benchmark bonds in euros and US dollars in the equivalent of around EUR 23.8 billion. "Our benchmark programmes have proven their value as the most important pillar of our funding strategy. In the difficult current market environment international investors appreciate KfW's first-class credit quality, and they can rely on the performance of our bonds", declared Czichowski.

Furthermore, the five-year bond exchangeable into ordinary stock of Deutsche Telekom AG which was issued in May received great attention, successfully continuing the federal government's and KfW's privatisation of the enterprise. This issue aroused great interest among institutional investors and also impressed many market players with its volume of EUR 3.3 billion.

Premature repayment of USD bonds and follow-up financing increases funding volume slightly to around EUR 75 billion

The mid-year review of annual funding needs performed regularly by KfW has led to a slight increase in the funding volume from around EUR 70 billion to now EUR 75 billion. "As the interest level has declined, particularly in the USA, this year there will be increasingly more premature repayments of callable US dollar bonds. We plan to make follow-up funding transactions for these bonds. This will slightly increase our funding needs by a total of around EUR 5 billion", explained KfW's treasurer.

Looking back on the successful first half of the year Czichowski expressed optimism that KfW will well manage the funding of the remaining approximately EUR 28 billion. The focus of KfW's international capital market activities will continue to be the euro and the US dollar; the pound sterling, the Japanese yen and numerous niche currencies in which KfW offers investors debt instruments will also play their important part in the funding.

A strategically important novelty was introduced by KfW in the first quarter of this year by adopting sustainability criteria in the management of its own financial investments. The bank had committed itself to apply these criteria by signing the UN Initiative "Principles for Responsible Investment" (UN-PRI). KfW now bases its investment decisions for its own liquidity portfolio not only on the still important credit quality criterion but also on a sustainability rating and gives preference to issuers that meet the sustainability criteria established by KfW. In preparing this rating KfW cooperates with the sustainability rating agency "Scoris GmbH".

"Sustainability as a central theme that guides the promotional activities and KfW Bankengruppe itself has thus also found its way into our capital market activities. We also hope that this step will further enhance the acceptance and implementation of the UN-PRI within the investment industry", said Czichowski.

For more information on KfW's funding and sustainable financial investment management please go to http://www.kfw.de/EN_Home/Presse/Press_Conferences/index.jsp and http://www.presseportal.de/go2/Socially_responsible_investment

| presseportal
Further information:
http://www.kfw.de

More articles from Business and Finance:

nachricht Mathematical confirmation: Rewiring financial networks reduces systemic risk
22.06.2017 | International Institute for Applied Systems Analysis (IIASA)

nachricht Frugal Innovations: when less is more
19.04.2017 | Fraunhofer-Institut für Arbeitswirtschaft und Organisation IAO

All articles from Business and Finance >>>

The most recent press releases about innovation >>>

Die letzten 5 Focus-News des innovations-reports im Überblick:

Im Focus: Fizzy soda water could be key to clean manufacture of flat wonder material: Graphene

Whether you call it effervescent, fizzy, or sparkling, carbonated water is making a comeback as a beverage. Aside from quenching thirst, researchers at the University of Illinois at Urbana-Champaign have discovered a new use for these "bubbly" concoctions that will have major impact on the manufacturer of the world's thinnest, flattest, and one most useful materials -- graphene.

As graphene's popularity grows as an advanced "wonder" material, the speed and quality at which it can be manufactured will be paramount. With that in mind,...

Im Focus: Exotic quantum states made from light: Physicists create optical “wells” for a super-photon

Physicists at the University of Bonn have managed to create optical hollows and more complex patterns into which the light of a Bose-Einstein condensate flows. The creation of such highly low-loss structures for light is a prerequisite for complex light circuits, such as for quantum information processing for a new generation of computers. The researchers are now presenting their results in the journal Nature Photonics.

Light particles (photons) occur as tiny, indivisible portions. Many thousands of these light portions can be merged to form a single super-photon if they are...

Im Focus: Circular RNA linked to brain function

For the first time, scientists have shown that circular RNA is linked to brain function. When a RNA molecule called Cdr1as was deleted from the genome of mice, the animals had problems filtering out unnecessary information – like patients suffering from neuropsychiatric disorders.

While hundreds of circular RNAs (circRNAs) are abundant in mammalian brains, one big question has remained unanswered: What are they actually good for? In the...

Im Focus: RAVAN CubeSat measures Earth's outgoing energy

An experimental small satellite has successfully collected and delivered data on a key measurement for predicting changes in Earth's climate.

The Radiometer Assessment using Vertically Aligned Nanotubes (RAVAN) CubeSat was launched into low-Earth orbit on Nov. 11, 2016, in order to test new...

Im Focus: Scientists shine new light on the “other high temperature superconductor”

A study led by scientists of the Max Planck Institute for the Structure and Dynamics of Matter (MPSD) at the Center for Free-Electron Laser Science in Hamburg presents evidence of the coexistence of superconductivity and “charge-density-waves” in compounds of the poorly-studied family of bismuthates. This observation opens up new perspectives for a deeper understanding of the phenomenon of high-temperature superconductivity, a topic which is at the core of condensed matter research since more than 30 years. The paper by Nicoletti et al has been published in the PNAS.

Since the beginning of the 20th century, superconductivity had been observed in some metals at temperatures only a few degrees above the absolute zero (minus...

All Focus news of the innovation-report >>>

Anzeige

Anzeige

Event News

Call for Papers – ICNFT 2018, 5th International Conference on New Forming Technology

16.08.2017 | Event News

Sustainability is the business model of tomorrow

04.08.2017 | Event News

Clash of Realities 2017: Registration now open. International Conference at TH Köln

26.07.2017 | Event News

 
Latest News

Gold shines through properties of nano biosensors

17.08.2017 | Physics and Astronomy

Greenland ice flow likely to speed up: New data assert glaciers move over sediment, which gets more slippery as it gets wetter

17.08.2017 | Earth Sciences

Mars 2020 mission to use smart methods to seek signs of past life

17.08.2017 | Physics and Astronomy

VideoLinks
B2B-VideoLinks
More VideoLinks >>>