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14.07.2004 – 17:00

KfW

KfW's Capital Market Activities: Investor base further enlarged
Ambitious securitisation transactions in preparation

    Frankfurt/Main (ots)

In the first six months of 2004 KfW borrowed longer-term funds of almost EUR 30 billion in the international capital markets. Under the Euro Benchmark Programme KfW issued a 5-year global bond with a volume of EUR 5 billion and a 10-year global bond with a volume of EUR 3 billion. "In a market environment, in which demand for bonds with long maturities was generally rather low, we were able to launch our Euro Benchmark No. XI with a result that satisfied all parties involved", said Hans W. Reich, the Chairman of the Board of Managing Directors of KfW Bankengruppe on the occasion of the semi-annual press talk on KfW's capital market activities.          Under its USD Programme KfW issued a 5-year USD 3 billion bond at the beginning of the year. With the placement of an extremely successful 3-year 3 billion USD bond last week KfW has fulfilled its minimum volume announced for 2004 in this programme.          As regards issuing of KfW sterling bonds Reich commented as follows on the positive development in the first half of the year: As a result of the positive market situation KfW issued sterling bonds equivalent to EUR 3.8 billion, which is already more than twice the amount issued in 2003. In addition the attractiveness of KfW sterling bonds is increased due to an announcement made by the UK Financial Services Authority at the beginning of July, according to which such bonds may be rated from now on as risk-free investments not only by banks but also by insurance companies.          The Australian market also holds new opportunities for KfW: For quite some time now KfW bonds denominated in Australian dollars have been eligible as collateral with the Australian central bank. Because of higher demand, KfW already issued two so-called Kangaroo bonds in the equivalent of more than EUR 700 million in the first half of 2004. But bonds in "exotic" currencies were also issued with interesting results, for instance in Hungarian forint and Singapore dollars.          Another mainstay of KfW's long-term funding is private placements, for which there is still a strong demand from Japan. In the first half of 2004 KfW issued approximately 100 private placements in Japanese yen. "Demand for a wide range of currencies and structures as well as for the established benchmark programmes shows that we have a diversified investor base for all of our transactions," Reich said with satisfaction.          KfW sticks to the funding volume of EUR 50 to 55 billion announced for the year 2004. It will issue one further Euro Benchmark bond. Depending on the market situation KfW will decide in the second half of the year whether to launch another issue under the USD Programme.          In his report on the activities of KfW Bankengruppe in the area of asset securitisation Reich said that the European securitisation market continued on a high level, as in the year before, with Germany occupying a position in comparison with other countries, which does not reflect its economic importance. In the first half of 2004 German assets in the volume of around EUR 9 billion were securitised. Securitisations concluded under the KfW platforms PROMISE and PROVIDE amount to EUR 4.42. billion.          With a view to the development of the German securitisation market Reich said that a very lively segment had developed for SME and housing loans. "KfW has made an important contribution to creating the necessary structures, not only for the credit supply in general but also for Germany as a financial centre. Beyond that, the German government also paved the way for a broader securitisation market by introducing a number of measures and in the context of "improving the overall framework for asset-backed securities (ABS)" the TSI banks are playing a key role," Reich concluded. He continued that the True Sale International GmbH, which was set up as scheduled by the TSI banks, started business on June 26, 2004.          In Germany as well a growing number of innovative transactions are being developed for the market, for instance the securitisation of mezzanine capital. KfW, too, launched a special securitisation transaction in the market in the first half of the year: With Symvonie 2004-1 KfW securitised a small, regionally concentrated portfolio of minor SME loans of Nationalbank Essen. This shows that a securitisation solution can be found at acceptable transaction costs even for smaller portfolios.          In the field of asset securitisation, too, KfW will reach the volume of EUR 10 to 15 billion announced for this year. KfW is currently preparing several projects and in addition to further, "more challenging" transactions, its activities will again include one or the other European transaction.          In the area of securitisation KfW also cooperates frequently with European promotional institutions, such as the EIF (European Investment Fund) and DCD (Caisse des Dépôts). "This cooperation is very important to us because it brings us all one step closer to an efficient European securitisation platform," Reich said.           ots Original Text Service: KfW Internet : http://www.presseportal.de

For further informations pleas contact:

Nathalie Drücke, Phone: +49 (0)69 7431-2098, E-Mail: nathalie.druecke@kfw.de

KfW, Palmengartenstraße 5-9, 60325 Frankfurt Abteilung Konzernkommunikation Tel.: 069 7431-4400, Fax:  069 7431-3266, E-Mail: presse@kfw.de, Internet: www.kfw.de

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