Investors scramble for KfW's new three-year bond

Frankfurt (ots) - KfW Bankengruppe has today issued a Euro 5
billion 3 year benchmark bond. Following the successful placement of
a five-year and a ten-year bond earlier this year, KfW has now
responded to investor demand for a short-term maturity.

The new Euro Benchmark III/2009 matures on 21 May 2012 and pays a
coupon of 2.25% p.a. The re-offer price was set at 99.991%, yielding
2.253% and equating to a spread of 51.3 basis points over the
Bundesobligation #150, due April 2012. The transaction was lead
managed by Calyon, Commerzbank and The Royal Bank of Scotland. The
bond has been assigned the same top-notch ratings from Fitch Ratings,
Moody's and Standard & Poor's (AAA / Aaa / AAA) as all KfW bonds.

Market conditions for the highest class issuers have improved
significantly over recent weeks and both credit spreads and new issue
premiums for benchmark bonds have reduced substantially. KfW has
responded to this trend swiftly and opened the books for this new
three-year benchmark bond on Tuesday morning. The initial price talk
in the marketing phase of "20 basis points area" over the swap curve
was adjusted to 15 basis points within a matter of hours as a
response to the overwhelming demand for the issue.

"Demand for first-class credit quality continues unabated, and,
driven by this powerful momentum, the order book was quickly
oversubscribed. The habitually strong international demand for KfW
bonds and the additional impetus from German investors have enabled
us to launch another EUR 5 billion bond issue. Investors continue to
reward KfW for the liquidity and transparency that our bonds offer
them, and with this deal we have benefited from very favourable
market conditions," commented Dr Günther Bräunig, member of the
Management Board of KfW Bankengruppe.

The geographical breakdown of the order book is as follows:

Geographical breakdown:

Europe: 83%

- Germany: 38%
- France: 12%
- UK: 11%
- Switzerland: 8%

Asia: 7% Americas: 7% Other: 3%

Breakdown by investor type:

Banks: 62% Funds: 16% Central banks: 12% Insurance companies: 3%
Other: 7%

KfW has announced refinancing needs of around EUR 75 billion for
2009. With this issue the funding volume raised in the capital market
this year has so far reached EUR 40.3 billion. The Benchmark
programmes account for the lion's share of the volume. Including
today's issue, since the beginning of the year KfW has already raised
EUR 16 billion under its Euro Benchmark Programme as well as USD 14
billion in four transactions under its USD Programme.

This press release is not an offer of securities for sale in the
United States. Securities may not be offered or sold in the United
States absent registration or an exemption from registration. KfW has
registered the securities that are the subject of this press release
for sale in the United States. The offering of the securities in the
United States will be made by means of a prospectus that may be
obtained from KfW and will contain detailed information about KfW and
its management, financial statements and information about the
Federal Republic of Germany.

Term Sheet

KfW Euro Benchmark III/2009 - 2,250% Maturity 21 May 2012 -

ISIN: DE000A0XXM87
Issuer: KfW
Guarantor: Federal Republic of Germany
Rating: AAA (Fitch Ratings) / Aaa (Moody's)/ AAA (Standard & Poor's)
Size: 5,000,000,000 EUR
Maturity: 20 May 2009 - 21 May 2012
Coupon: 2.250% p.a
Reoffer price: 99.991
Yield: 2.253% p.a.
Format: Global
Listing: Frankfurt

Lead Manager (3):

Calyon
Commerzbank
Royal Bank of Scotland

Senior Co-Lead Manager (4):

Deutsche Bank
DZ Bank
Landesbank Baden-Württemberg
Unicredit (HVB)

Co-Lead Manager (8):

Banca Akros Gruppo BPM
Barclays
Danske Bank A/S
Goldman Sachs
HSBC
JP Morgan
Nomura
UBS

Selling Group (8):

Deka

Fortis

ING

Natixis

Nordea Bank Danmark A/S

Santander

SEB

Société Générale Corporate & Investment Banking

Originaltext: KfW
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Pressekontakt:
KfW, Palmengartenstraße 5-9, 60325 Frankfurt
Kommunikation (KOM)
Tel. 069 7431-4400, Fax: 069 7431-3266,
E-Mail: presse@kfw.de, Internet: www.kfw.de