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KfW successfully launches its second 10-year USD Global Bond in 2010
Frankfurt (ots) -
- KfW is the only issuer in its segment who has issued two 10-year bonds this year
- New USD Global underlines KfW's strong profile as a frequent issuer in the USD market
KfW has successfully launched a new USD 4 bn Global transaction which has been priced yesterday evening. The new 10-year offering marks the second well executed 10-year USD Global transaction and the sixth USD Global by KfW of 2010.
The USD 4 bn transaction has a 2.75% coupon and maturity date of 8 September 2020. Joint lead managers are Bank of America Merrill Lynch, Deutsche Bank and JP Morgan. The bond was priced at a re-offer spread versus mid-swaps of +34 basis points which equates to a spread of +35.25 basis points over the current 10-year US Treasury bond [T2.625% 15 August 2020].
One of the main drivers of the transaction was the strong interest for yield in high quality names, especially given the rally in the US Treasury market. Investors looking for yield were willing to go for longer maturities without taking more credit risk.
The strong bid-side flows seen in secondary markets led to the decision to proceed with the transaction early Tuesday morning London time.
KfW began marketing the benchmark transaction with a volume of USD 3 bn at mid-swaps +35 basis points area at 8 a.m. London time on Tuesday morning. Over the course of early morning, the order book reached over USD 3 bn with orders predominantly from buy and hold investors, as a consequence by the strong momentum the price talk was tighten to mid-swaps +34 / +35 basis points in the early afternoon.
With additional US investors coming in during the afternoon, the order book closed at around USD 5.2 bn. Finally, a USD 4 bn bond at the tight end of the price range at mid-swaps +34 basis points could be launched and priced.
KfW is the only SSA issuer that has been able to launch USD bonds in four different maturities (2, 3, 5 and 10 years) this year. This strategy allows Germany's largest Agency to not only maintain a liquid and on-the-run curve, which is highly appreciated by investors around the globe. This new benchmark underlines KfW's strong benchmark profile and leadership in the international capital markets, as one of the top borrower with consistent access to the market.
KfW is assigned with a direct and irrevocable guarantee from the Federal Republic. All global bonds issued by KfW have been assigned a triple-A rating by Standard & Poor's, Moody's and Fitch. For 2010, KfW announced a funding programme of approximately EUR 75 bn in medium and long-term debt. So far KfW has issued EUR 59.7 bn (around 80%).
The breakdown of the order book by sectors is as follows:
Breakdown by investor type:
Central Banks: 43% Asset Managers: 28% Banks: 27% Others / Corp.: 2%
Asia: 61% Europe: 27% Americas: 12%
USD 4 billion - 2.75% - 2010 / 2020
ISIN: US500769DZ48 Issuer: KfW (Kreditanstalt für Wiederaufbau) Guarantor: Federal Republic of Germany Rating: AAA (Fitch Ratings)/Aaa (Moody's)/AAA (Standard & Poor's) Size: USD 4,000,000,000.-- Maturity Date: 8 September 2010 - 8 September 2020 Coupon: 2.75% p.a., payable semi annually Payment Dates: 8 March and 8 September Re-offer-Price: 99.29% Yield: 2.832% s.a. Format: Global Stock Market Listing: Luxembourg
Lead Managers (3):
Bank of America Merrill Lynch Deutsche Bank JP Morgan
Co-Lead Managers (10):
Barclays Capital Citi Credit Suisse Goldman Sachs HSBC Mitsubishi UFG Nomura RBC CM Toronto Dominion UBS
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.