Strong domestic demand for 5-year KfW benchmark bond

Frankfurt (ots) - KfW today issued a Euro Bond with a maturity of
five years and a volume of EUR 5 billion. With this transaction KfW
has successfully placed both a ten-year and a five-year Euro
Benchmark Bond within the first weeks of the year, defying a
challenging market environment in the long maturity segment.

The Euro Benchmark II/2009 matures on 25 February 2014 and pays a
coupon of 3.125% p.a. Its reoffer price is 99.754 (yield 3.179%),
corresponding to a yield pick-up of 111.4 bp over the
Bundesobligation which matures in October 2013. The lead managers for
the transaction are Citi, Deutsche Bank and UBS Investment Bank. The
bond has received the same top-notch triple-A rating from Fitch
Ratings, Moody's and Standard & Poor's as all KfW bonds.

Over the past months domestic investors have in particular been
supporting capital market transactions of their national
state-guaranteed issuers. With today's issue KfW therefore opted for
a new syndicate structure. German banks with very good access to
domestic investors were given a prominent role and succeeded in
placing more than EUR 900 million with mostly new KfW investors.
Overall, orders from Germany accounted for nearly EUR 2 billion of
the order book. "Getting German banks more involved in the marketing
has contributed significantly to the success of the transaction and
has enabled us to issue a bond volume of EUR 5 billion. This is also
an advantage for international investors who appreciate the high
liquidity associated with it", said Dr Günther Bräunig, member of the
Managing Board of KfW, adding: "We have once again demonstrated that
we respond flexibly to new market developments. The substantial
oversubscription of the transaction reflects the fact that the issue
price is in conformity with the market and it underscores the
investors' confidence in KfW".

It was not least because of the new syndicate structure that the
order book filled very quickly after being opened on Tuesday morning.
The order book was closed early on Wednesday morning, with EUR 6.2
billion subscribed and about 380 individual orders received. The
issue was reoffered at mid swaps +45 to +50; but owing to the strong
demand the issue was closed at mid swaps +47.

The breakdown of the order book by sector is as follows:

Breakdown by investor type:

Banks: 42 % Funds: 31% Central Banks: 12 % Insurance Companies: 9
% Others: 6 %

Geographical breakdown:

Europe: 89 % Germany 32 % UK 12 % Switzerland 9 % France 8 %
Asia: 6 % Americas: 2 % Others: 3 %

KfW has announced refinancing needs of around EUR 75 billion for
2009. With this issue the funding volume raised in the capital market
this year has so far reached EUR 21.7 billion. The Benchmark
programmes account for the lion's share of the volume. Including
today's issue, since the beginning of the year KfW has already raised
EUR 8 billion in two transactions under its Euro Benchmark Programme
as well as USD 7 billion in two transactions under its USD Programme.

This press release is not an offer of securities for sale in the
United States. Securities may not be offered or sold in the United
States absent registration or an exemption from registration. KfW has
registered the securities that are the subject of this press release
for sale in the United States. The offering of the securities in the
United States will be made by means of a prospectus that may be
obtained from KfW and will contain detailed information about KfW and
its management, financial statements and information about the
Federal Republic of Germany.

Term Sheet KfW Euro Benchmark II/2009

EUR 5 bn - 3.125 % - 2009/2014

ISIN: DE000A0XXM38

Issuer: KfW Guarantor: Federal Republic of Germany Rating: AAA
(Fitch Ratings) / Aaa (Moody's) / AAA (Standard & Poor's) Size:
5,000,000,000 EUR Maturity Date: 25 February 2009 - 25 February 2014
Coupon: 3.125 % p.a Re-offer-Price: 99.754 Yield: 3.179 % p.a.
Format: Global Listing: Frankfurt

Lead Managers (3):

Citi Deutsche Bank UBS

Senior Co-Lead Managers (5):

DekaBank Dresdner Kleinwort DZ Bank Landesbank Baden-Württemberg
Unicredit (HVB)

Co-Lead Managers (8):

Banca Akros Gruppo BPM Barclays BNP Danske Bank A/S HSBC Morgan
Stanley Nomura Royal Bank of Scotland

Selling Group (8):

Calyon Fortis ING Natixis Nordea Bank Danmark A/S Santander SEB
Société Générale Corporate & Investment Banking

Originaltext: KfW
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Pressekontakt:
For further information please contact
Nathalie Drücke
Tel.: +49 (0) 69 7431-2098
E-Mail: Nathalie.Druecke@kfw.de

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