KfW concludes 2006 Securitisation Activities with the Provide-A 2006-1 Transaction

Frankfurt (ots) - KfW has concluded its securitisation activities
for the year 2006 with the "Provide-A 2006-1" transaction. The
portfolio of the securitisation transaction in the amount of EUR 2.9
billion is provided by UniCredit Group and contains the risks from
32,000 private mortgage loans, which were privately placed in the
capital market via the KfW platform PROVIDE. The loans have an
average volume of approximately EUR 127,000; 40% of the portfolio is
collateralized by real estate from Bavaria. The ratings for the
Provide-A 2006-1 transaction were awarded by Moody's and Standard &
Poor's; 92.6% of the pool was rated "AAA". For the first time, a
German SPV was used in a PROVIDE transaction. This SPV was set up in
the context of TSI.

Unlike so-called true sale transactions, in which the securitising
bank obtains funding in the capital market, "Provide-A 2006-1" is a
synthetic transaction, in which only the default risks of the
underlying pool of loans are securitised. These risks are transferred
to KfW, which then transfers the risk with a super senior swap (which
is basically a guarantee) and credit-linked notes to the capital
market. The First Loss Piece, i.e. the tranche with the highest
default probability, was directly placed in the capital market by the
originator via a junior credit default swap.

In 2006 KfW concluded four transactions for the securitisation of
housing loans for a total of EUR 7.6 billion under its PROVIDE
securitisation platform. Since the PROVIDE platform was launched in
2001, the credit risks from 32 portfolios provided by different
German and some European banks and covering more than one million
housing loans in a total volume of approximately EUR 67 billion have
been placed in the international capital markets using the instrument
of securitisation.

The two KfW platforms for the securitisation of SME loans
(PROMISE) and housing loans (PROVIDE) were set up in the years 2000
and 2001 with the aim of supporting the extension of additional loans
to the SME sector and the housing industry. During the first years
after the establishment of its securitisation platforms KfW
Bankengruppe made significant contributions with its promotional
instruments to shaping this segment of the German capital market,
which has seen a very rapid development since then. Not least due to
the improved legal framework for securitisation, German banks were
increasingly offered opportunities not only to reduce their capital
requirement but also to conduct active portfolio management. At the
same time KfW makes a contribution to broadening the German
securitisation market and to improving the tradability of these
specific asset classes.

Next year, too, KfW will offer all banks the opportunity to
securitize their credit risks using the highly standardized KfW
platforms.

Originaltext: KfW
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For further information: Nathalie Drücke,
Tel: +49(0)69 7431-2098, E-Mail: nathalie.druecke@kfw.de

KfW, Palmengartenstraße 5-9, 60325 Frankfurt
Department Communication
Tel. +49(0)69 7431-4400, Fax: +49(0)69 7431-3266,
E-Mail: presse@kfw.de, Internet: www.kfw.de


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