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KfW to offer green bonds in second half of 2014
Frankfurt (ots) -
- EUR 36.5 billion funded in capital markets in the first half of the year - KfW supports internationalisation of the RMB and of Frankfurt as a financial center - Funding volume for 2014 revised to EUR 55-60 billion
KfW is launching a new product in the capital market for its funding activities in the second half of 2014: As one of the world's largest providers of environmental and climate protection finance it will shortly issue its inaugural green bond.
Green bonds - bonds whose issue proceeds are used to finance environmental and climate protection projects - are becoming increasingly popular among investors worldwide. With "Green Bonds - Made by KfW" the promotional bank seeks to offer investors an opportunity to allocate a measurable climate protection effect to their investments, thereby also attracting new investors. "KfW is fully committed to the concept of sustainability and is one of the world's largest financiers of climate protection investments. As a bank committed to responsibility, we promote environmental and climate protection worldwide - in this case via the capital market. By means of our green bonds we shall link our sustainable promotional business directly with our funding in the capital market. This allows us to stress the importance of making capital available for climate and environmental protection," explained Dr Günther Bräunig, member of the Executive Board of the KfW Group in charge of Capital Markets.
Thanks to its long standing experience in environmental and climate protection finance, and its excellent reputation in the international capital markets, KfW is able to convincingly support the shaping of this new market segment, providing valuable stimuli. KfW's holistic sustainability approach across all areas - be it promotional business, building management or HR policy - is confirmed by the excellent ratings KfW has received from rating agencies specialising in sustainability. These ratings further enhance KfW's credibility as an issuer significantly.
KfW has been an active member of the UN Principles for Responsible Investment (PRI) since 2006. It manages its own liquidity portfolio as a responsible investor, and has maintained a dialogue with issuers on the topic of "responsibility in the capital market" for many years. "Our aim as a green bond issuer is to establish the same systematic dialogue with investors to get them engaged in climate protection finance. I am convinced that capital can provide very strong stimuli for sustainable development. The more capital market participants are committed to responsible investment, the bigger the effect," said Bräunig.
In the first half of 2014 KfW funded around EUR 36.5 billion in the international capital markets. This period was characterized by a friendly market environment and in particular highly liquid bonds of safe haven issuers once again met with strong demand. All told, in the first half of the year KfW issued securities in more than 126 individual transactions and in 11 different currencies.
Milestones included KfW's first RMB bond issue with a listing on the Frankfurt Stock Exchange. Thanks to this bond, which was issued in April with a term of two years and a volume of RMB 1 billion, KfW has set a clear focus on supporting the initiative to establish Frankfurt as an RMB financial centre early on.
KfW's benchmark programmes in EUR and USD accounted for approx. 64% of the total funding accomplished in the first half of 2014. While bonds with shorter and medium benchmark maturities (2, 3 and 5 years) were issued in USD, investors in EUR favoured medium to longer term benchmark maturities (5, 7 and 10 years). More than half of all USD-denominated benchmark bonds were placed with central banks worldwide. To prop up their liquidity portfolios, banks in particular have invested in KfW's EUR-denominated benchmark bonds. Both investor groups appreciate the fact that KfW bonds enjoy the highest credit rating and are highly liquid.
The target corridor of KfW's funding volume for 2014 has been revised to EUR 55-60 billion. This is due, in particular, to the high non-scheduled repayments of promotional loans, which is usual in a low interest setting, and to the very good liquidity that KfW disposes of. For further information on "Green Bonds - Made by KfW" please go to: https://www.kfw.de/Haftungsausschlusserklärung-2.html