09.05.2012 – 16:04
KfW issues its first Offshore Renminbi Bond
- Milestone for KfW´s funding - Opens up a promising capital market segment
Today KfW issued its inaugural bond in Chinese Renminbi (RMB). The bond with a volume of RMB 1 billion (approx. EUR 122 million) was issued in the offshore RMB market in Hong Kong. It is the largest offshore RMB bond from a non-Asian Sovereign, Supranational and Agency (SSA) issuer. KfW's first offshore RMB bond has a maturity of 2 years and offers a semi-annual coupon of 2.00 %. Lead manager of the transaction is HSBC.
KfW is one of the largest non-state issuers in the world. This year, the promotional institution intends to raise about EUR 80 billion in the international capital markets to refinance its lending business. For issuers of this size, global diversification of funding is very important. To accomplish this goal, it is essential to gain the confidence of a range of global investors that is as diverse as possible, by offering not only an outstanding credit rating but also a broad product range.
"This issue is an important milestone in the history of KfW´s funding and gives access to a promising market. We expect the market to open up further and that investors' interest in Renminbi bonds will increase in the future," commented Dr Günther Bräunig, member of KfW's Executive Board and responsible for capital markets. Already in the 1980s KfW began to offer bonds in foreign currencies and since then has professionally expanded this area. It now offers bonds to its international investors in over 20 currencies. "We always work with an eye to the future and monitor newly developing market segments with good potential in order to tap into new funding potential as early as possible. We are attentively watching both the Chinese offshore and onshore capital markets, which in the future will offer strong growth while the Renminbi is continuously gaining in importance for the international credit and financial markets," explained Bräunig.
The relationship between KfW and the People's Republic of China has continually evolved over the past decades, beginning with "Financial Cooperation". China has since developed into an increasingly important market, particularly for the German export economy. The long-standing cooperation between KfW and the People's Republic of China has certainly contributed to the fact that Germany's biggest promotional bank enjoys the confidence of Chinese investors.
The issue proceeds from KfW's first offshore RMB bond were exchanged for euro through a currency swap in order to hedge against currency risks, and thus can be used for KfW´s general funding purposes.
Service: Milestones in KfW funding in foreign currencies
1987: First foreign currency bonds issued in US-Dollar and in Swiss Francs, at the same time first cross-currency swap completed 1991: First bonds are issued in Japanese Yen (so-called Samurai-Bonds), the first Uridashi-Bond follows in the year 2002 1998: First global bond in DM issued, e.g. a bond that can be placed worldwide 2001/2002: KfW Benchmark Programme established, e.g. regular international placement of global bonds in EUR and USD 2004: Further bonds are being issued in Australian Dollar (so-called Kangaroo-Bonds) as well as in Canadian Dollar and in New Zealand Dollar
Further information under: http://www.kfw.de/kfw/en/KfW_Group/Investor_Relations/Funding_instruments/Capital_market/index.jsp.
Original content of: KfW, transmitted by news aktuell