KfW braves challenging markets with flexible funding strategy

Frankfurt am Main (ots) -

- Stable funding volume of EUR 55-60bn for 2015
- High share of foreign currencies expected to continue
- Broadening of greenbond approach
- ABS-investments on a European level envisaged

KfW has raised around EUR 30bn in international capital markets by
June 30 of this year. With a range of EUR 55-60bn the targeted
funding volume for the whole of 2015 remains stable.

KfW's crisis proven "Three-Pillar-Strategy" served as a strong
backbone within extremely challenging markets affected by the
QE-programme of the ECB and woes around Greece. As a consequence, KfW
tapped the market only with some reservation under its EUR-Programme
in the first half of this year and issued only two global bonds with
maturities of 7 and 10 years. Furthermore, KfW issued a EUR 2bn
15-year transaction outside the global format, which is the largest
in the segment of supras and agencies since the start of the year.
With over 70%, the bulk of the funding was raised in foreign
currencies with USD accounting for over 50% alone. This marks a
historical high and is a direct consequence of KfW's excellent access
to the USD-market. Four USD-Globals amounting to USD 15bn were issued
under KfW's USD-Programme across the whole maturity spectrum from 3-
to 10-years. "We see a structural shift in demand. On the one hand,
regulation increasingly requires banks to buy safe and liquid assets
such as KfW bonds. On the other hand, we have seen central banks less
active", Dr. Günther Bräunig, the member of the Executive Board of
KfW Bankengruppe in charge of capital markets, comments the changes
of demand in USD.

Further highlights of the increasingly international funding
activities are KfW's inaugural NZD 650m Kauri-Bond, named after the
largest endemic tree-species in New Zealand, and which specifically
appeals to domestic investors, and its first AUD-Green-Kangaroo-Bond.

Within the seminal market of the Chinese Renminbi KfW was able to
issue CNY 2.85bn (CNY 1bn previous year) until June 30th. "Our
transactions 2015 are all Frankfurt listed. We keep supporting the
initiative for establishing Frankfurt as a financial hub for the
Chinese Renminbi. While this won't happen overnight, we believe that
the market will grow significantly in importance going forward",
Bräunig depicts his vision.

For the second half of 2015 KfW expects a continuation of the
trend of the first six months. "Peculiar markets require a very
flexible funding strategy. Our task is to most efficiently fund our
promotional but also the increasing international activities. Thus,
if necessary we are prepared to skip certain bond-maturities we
typically offered in the past under our EUR-programme. The same
degree of flexibility may be required as to the typical size of the
issues. Overall, I expect a higher share of funding in foreign
currencies, also in our greenbond format", Bräunig explains the
situation.

Pursuant to its announcement of last December on expanding its
greenbond approach, KfW issued the largest ever Green-Kangaroo-Bond
with a volume of AUD 600m in March 2015. The greenbond market becomes
increasingly diversified with new issuers and currencies, and KfW
intends to support this development by issuing greenbonds in further
currencies while also offering EUR and USD.

"Transparency and impact reporting are increasingly in the centre
of interest. Here we feel very well positioned within our issuance
activities. Also within our greenbond portfolio, investments need to
comply with our own high standards as to transparency as well as
reporting, and issuers need to provide a second party opinion for
their greenbonds", Bräunig highlights.

Following its announcement of April 2015 to build a greenbond
portfolio of up to EUR 1bn, per the end of June KfW found around EUR
134m of investment opportunities qualifying under its own strict
taxonomy and consisting of issues from SSAs as well as banks and
corporates.

KfW's ABS-investments as an instrument to promote financing
options for small and mid-sized enterprises in Germany amounted to
EUR 360m by the end of June. Going forward, KfW intends to expand
those activities into Europe as a means of supporting the initiative
of the European Commission for more growth in Europe, the so-called
"Juncker-Plan". "Thereby we aim at closely cooperating with the
European Investment Bank, the European Investment Fund as well as
other promotional banks", Bräunig comments on KfW's role as to the
contribution to European growth. "We believe securizations can
substantially facilitate access to credit and for that matter
stimulate growth. One important prerequisite for re-animating this
market as an instrument for financing, risk-transfer and balance
sheet management is an appropriate regulatory framework that helps
creating a level playing field for securizations and comparable
financial instruments. Hence, we support the concept of
'High-Quality-Securizations' and share our expertise within the
ongoing consultations on a pan-European level to bring this market
forward", Bräunig concludes.

For more details on KfW's funding please go to:
http://ots.de/WieEp

KfW's next greenbond reporting is due at the end of July 2015 and
will be retrievable at: http://ots.de/YgIzA

Pressekontakt:
KfW, Palmengartenstr. 5 - 9, 60325 Frankfurt
Kommunikation (KOM) Nathalie Cahn
Tel. +49 (0)69 7431 2098, Fax: +49 (0)69 7431 3266,
E-Mail: Nathalie.Cahn@kfw.de, Internet: www.kfw.de