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
RWI/ISL-Container Throughput Index with minor decline on a high overall level
20.03.2018 | RWI – Leibniz-Institut für Wirtschaftsforschung
The RWI/ISL-Container Throughput Index started off well in 2018
22.02.2018 | RWI – Leibniz-Institut für Wirtschaftsforschung
An international team of researchers has discovered a new anti-cancer protein. The protein, called LHPP, prevents the uncontrolled proliferation of cancer cells in the liver. The researchers led by Prof. Michael N. Hall from the Biozentrum, University of Basel, report in “Nature” that LHPP can also serve as a biomarker for the diagnosis and prognosis of liver cancer.
The incidence of liver cancer, also known as hepatocellular carcinoma, is steadily increasing. In the last twenty years, the number of cases has almost doubled...
In just a few weeks from now, the Chinese space station Tiangong-1 will re-enter the Earth's atmosphere where it will to a large extent burn up. It is possible that some debris will reach the Earth's surface. Tiangong-1 is orbiting the Earth uncontrolled at a speed of approx. 29,000 km/h.Currently the prognosis relating to the time of impact currently lies within a window of several days. The scientists at Fraunhofer FHR have already been monitoring Tiangong-1 for a number of weeks with their TIRA system, one of the most powerful space observation radars in the world, with a view to supporting the German Space Situational Awareness Center and the ESA with their re-entry forecasts.
Following the loss of radio contact with Tiangong-1 in 2016 and due to the low orbital height, it is now inevitable that the Chinese space station will...
Fraunhofer Institute for Organic Electronics, Electron Beam and Plasma Technology FEP, provider of research and development services for OLED lighting solutions, announces the founding of the “OLED Licht Forum” and presents latest OLED design and lighting solutions during light+building, from March 18th – 23rd, 2018 in Frankfurt a.M./Germany, at booth no. F91 in Hall 4.0.
They are united in their passion for OLED (organic light emitting diodes) lighting with all of its unique facets and application possibilities. Thus experts in...
A new scenario seeking to explain how Mars' putative oceans came and went over the last 4 billion years implies that the oceans formed several hundred million...
For the first time, an interdisciplinary team from the University of Basel has succeeded in integrating artificial organelles into the cells of live zebrafish embryos. This innovative approach using artificial organelles as cellular implants offers new potential in treating a range of diseases, as the authors report in an article published in Nature Communications.
In the cells of higher organisms, organelles such as the nucleus or mitochondria perform a range of complex functions necessary for life. In the networks of...
19.03.2018 | Event News
16.03.2018 | Event News
13.03.2018 | Event News
22.03.2018 | Trade Fair News
22.03.2018 | Earth Sciences
22.03.2018 | Earth Sciences