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KfW places EUR 5 billion Benchmark bond successfully, defies challenging capital market situation
Frankfurt (ots) - Today KfW added a EUR 5 billion three-year bond to its EUR Benchmark Programme. The Euro Benchmark II/2008 matures on 8 April 2011 and pays a coupon of 4.00% p.a. With a re-offer price of 99.806 it yields 4.072% p.a. This corresponds to a yield pick-up of 47.2 bp over the Bundesobligation which matures in April 2011. The lead managers of the transaction are BNP Paribas, Dresdner Kleinwort and Nomura. The bond has received the same top-notch triple-A rating from Fitch Ratings, Moody's and Standard & Poor's as all KfW bonds.
The volatility of Europe's capital markets made it hard for many issuers to place their securities with investors over the last two months, but deals have picked up again since early April. Issuers with excellent credit quality were particularly successful. Investors especially focused on the right pricing, which is not easy given the currently low secondary market liquidity.
"Its first-class credit quality makes KfW a top address for institutional investors even in a difficult capital market environment. We have a significantly oversubscribed bond and, with 160 individual orders, a very strong diversification. In a marketing phase of only 24 hours, the order book grew steadily, ultimately reaching a volume of EUR 6 billion. This demonstrates that our pricing was right, commented Dr Frank Czichowski, KfW's Treasurer. This afternoon the bond was priced at the upper edge of the price talk.
73% of the bond was placed in Europe, of which 11% in Scandinavia, 10% in Germany and Switzerland each, and 12% in Central and Eastern Europe. The remaining was distributed among Asia 21%, North America 3.5% and Africa 1.5%. Particularly worth noting is the strong demand for a Euro benchmark bond that came from Asia.
The distribution of the order book by investor category is as follows: Central banks: 49% Banks 23% Funds: 17% Insurance companies and pension funds: 7% Others: 4%
For 2008 KfW announced a funding volume to the tune of EUR 70 billion. Just under half of this, or EUR 32.5 billion, has so far been raised. As in the past, the Benchmark Programmes will account for the largest share of funds raised - with at least four euro and US dollar Benchmark bonds each planned for 2008.
This press release is not an offer to buy securities in the USA. Securities may not be offered or sold in the United States except with prior registration or with an exemption from registration under the US Securities Act. KfW will register the securities described in this press release for sale in the USA. The offer to buy the securities will be made in the USA only on the basis of a prospectus which will be provided by KfW and will contain detailed information about KfW, its management, its annual financial statements and information about the Federal Republic of Germany.
Features KfW EUR Benchmark II/2008 - 4.00% - Maturity 8 April 2011
Issuer: KfW Guarantor: Federal Republic of Germany Rating: AAA (Fitch Ratings)/Aaa (Moody's)/ AAA (Standard & Poor's) Amount: EUR 5,000,000,000 Maturity: 8 April 2011 Coupon: 4.00% p.a., first short coupon Re-offer price: 99.806 Yield: 4.072% p.a. Format: Global bond Listing: Frankfurt
Lead Managers (3):
BNP Paribas Dresdner Kleinwort Nomura
Co-Lead Managers (12):
ABN AMRO Banca Akros Gruppo BPM Barclays Capital Credit Suisse Deutsche Bank AG DZ Bank AG Goldman Sachs HSBC JP Morgan Merrill Lynch Morgan Stanley UBS
Selected Dealers (8):
Calyon Danske Bank A/S Fortis ING Natixis Nordea Bank Danmark A/S Santander Unicredit (HVB)