KfW has investors' confidence and is well positioned for 2009

Frankfurt (ots) -

- High funding volume of EUR 75 billion successfully raised in
2008
- Funding requirements of EUR 65 - 70 billion announced for 2009

"This was a very unusual year for KfW's capital market activities.
On the one hand, our funding requirements were higher than ever
before, yet on the other hand, the market was characterised by phases
of extremely high volatility. Despite these very difficult market
conditions, our strategy proved itself exceptionally well! We offer
our international investors first-class German credit quality and a
broad product spectrum coupled with high liquidity, and, for good
measure, add our maxim for action: 'flexibility, transparency and
reliability'" - this is how Dr Günther Bräunig, member of the
Managing Board of KfW Bankengruppe, assesses the bank's funding in
2008.

In order to obtain the funding it needed to perform its official
promotional mission in 2008, KfW raised around EUR 75 billion in the
international capital markets by 30 November by issuing 360
individual transactions in 22 currencies. More than half of the
volume was generated in EUR and USD via the benchmark programmes. KfW
is the only issuer in its market segment that has offered all
maturities - in particular a 10-year bond - in its Euro Benchmark
Programme this year, and all four bonds issued under this programme
had a volume of EUR 5 billion. A total of eight transactions with a
volume of USD 28 billion altogether were carried out across the
entire maturity curve under the USD programme. "Investors in the USD
programme also documented their confidence in KfW and even subscribed
two bonds with a 10-year maturity, which is unusually long for the
situation in the market this year - the response was remarkable",
underscored Bräunig.

As international investors have a need for foreign currency
diversification, the pound sterling accounted for a greater share of
KfW's funding especially in the first six months, and at year-end its
share is still around 12% (approx. GBP 7 billion or EUR 9 billion).
All other 19 currencies in which bonds were issued account for
slightly more than 9% of the bank's funding, with the two main issue
currencies in this group being the Australian dollar (2.3%) and the
Japanese yen (approx. 2%).

For many market participants the drastic aggravation of the
financial market crisis since autumn 2008 has rendered refinancing
conditions more expensive, making it more difficult to refinance. "We
nonetheless succeeded in raising some EUR 18 billion in long-term
capital since mid-September - another clear vote of confidence that
lets us look optimistically to the next funding year", explained
Bräunig.

For 2009 KfW expects the level of its promotional business to
remain high, also given the contribution it will make to the German
Government's economic stimulus package of measures entitled "Job
security through more growth" (Beschäftigungssicherung durch
Wachstumsstärkung). KfW's funding target for 2009 is EUR 65 - 70
billion. "We will raise these funds in the international capital
markets. At the same time our good liquidity management gives us
flexibility and also independence: our strong liquidity situation is
such that we do not need to use the capital market - which will
already face a major challenge next year due to the foreseeable
increase in offers of state-backed issues - any more than necessary",
said the member of KfW's Managing Board responsible for Capital
Markets.

To generate the announced volume, KfW will rely on its established
funding strategy in the international capital markets, which is
valued by investors all over the globe. "We will keep the three
pillars - benchmarks, public bonds and private placements - that have
again proven themselves in a difficult 2008. We do anticipate that
the benchmarks will play an even bigger role since investor demand
for standardised, large-volume and highly liquid bonds is due to rise
- in the longer term segment as well", added Bräunig.

Accordingly, five EUR benchmarks can be expected in three
maturities (three, five and ten years). Given sufficient market
demand, KfW will respond flexibly by issuing more of such bonds, if
necessary, or increasing outstanding benchmarks. The same holds for
the USD - here, too, KfW aims to serve the market with at least five
highly liquid bonds in the desired maturities.

KfW assumes that the situation in the international capital
markets will be marked by volatility and, at times, turbulence well
into 2009, and takes on this challenge: "The key to success lies in
the greatest possible flexibility in terms of timing an issue just
right and choosing a maturity as well as in the greatest possible
transparency in communication with market participants. Beyond that,
consistency and reliability in its financial market activities prompt
investors to continue to consider KfW's bonds as a 'safe haven' - and
rightfully so. These maxims will shape our capital market presence in
2009, too", announced Bräunig.

For further figures on KfW's funding activities 2008/2009 go to
www.kfw.de, "Press" section.

Originaltext: KfW
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Contact:
KfW, Palmengartenstraße 5-9, 60325 Frankfurt
Kommunikation (KOM)
Tel. 069 7431-4400, Fax: 069 7431-3266,
E-Mail: presse@kfw.de, Internet: www.kfw.de