KfW upbeat as second half kicks off / Funding volume of 75 bn EUR confirmed

Frankfurt (ots) - Prime credit standing and successful funding
strategy remain key success factors

Promotional bank committed to securitisations "Made in Germany"

At its semi-annual Capital Markets Press Briefing in London, KfW
today confirmed its anticipated funding volume of 75 bn EUR for 2010.
Germany's largest promotional bank is brimming with confidence
concerning the funding of its promotional lending business. 'We have
a globally oriented and acknowledged funding strategy, and are
extremely well positioned in the international capital markets; the
first six months, which were highly volatile, once again provided an
impressive demonstration of this', said Dr. Günther Bräunig, Member
of the Managing Board of KfW Bankengruppe.

KfW, one of Europe's largest issuers, believes that market
conditions will remain volatile over the next six months, and that
the public finance situation in the eurozone will continue to
unsettle many market participants. Firm austerity measures designed
to achieve financial stability are needed. In Europe there is a
strong political will to achieve this. KfW also believes that the
emerging European Financial Stability Facility (EFSF) has the
potential to gradually ease existing tensions on the international
capital markets, and thus restore confidence.

Bräunig expressed his conviction that KfW's prime German credit
quality will appeal to international investors. As in the first six
months, KfW will continue to offer its investors a broad array:
high-liquidity and high-volume global bonds in EUR and USD, and bonds
whose maturity, denomination and structure can be flexibly adapted to
meet investor requirements.

During the first six months KfW raised some 45.8 bn EUR on the
international capital markets. 221 bonds were issued in 17 different
currencies. Bonds denominated in EUR and USD made up the lion's share
of these issues (44% and 34% respectively), followed by the AUD, the
GBP and the JPY. Demand for bonds in NOK was also strong.

Worldwide, KfW is the only non-governmental issuer that has issued
large bonds in all benchmark maturities in both EUR and USD, and thus
offers a liquid reference curve. 'The fact that we were so successful
in placing our 5 bn EUR / 4 bn USD 10-year benchmarks underlines our
permanent access to the markets, and especially to long-term funds.
This is very important also for the future stability of our funding',
emphasised Bräunig.

It has clearly emerged that investors are now drawing a sharper
distinction between issuers from euro and non-euro countries, as well
as between issuers from core and peripheral euro countries. Investors
examine very closely, and evaluate very precisely, the guarantee, the
clout of the guarantor and the shareholder structure of an issuer.
Thanks to its explicit, direct guarantee provided by the Federal
Republic of Germany as the safest and financially strongest state in
the eurozone, and its clear and simple shareholder structure, KfW is
extremely well placed.

As to the development of the securitisation markets, where KfW has
been active since 10 years as well, the first pleasing chinks of
light can now be seen in Europe. During the first half of 2010 a
volume of around 28 bn EUR was placed publicly - three times the
amount placed in the whole of 2009.

Nonetheless, there is still a long way to go before one can speak
of a normalisation of the securitisation market. Uncertainty
concerning the plans for regulation is partially responsible for the
high volatility in this market segment. 'At the same time, though, we
observe how the planned regulatory requirements, and the more
restrictive monetary policy of the ECB anticipated in the medium
term, are making securitisation more attractive. Banks are once again
showing a strong interest in securitisation as a means of easing the
burden on their equity capital and of making their refinancing less
dependent on the ECB', explained Bräunig. In line with these
developments, a deal pipeline has begun to build up on KfW's
securitisation platforms.

The securitisation industry needs to keep up its efforts in
restoring investor confidence. A key step in this direction is the
'German Securitisation Standard' developed by TSI and the Association
of German Banks, a process in which KfW was actively involved.

For high-quality securitisations "Made in Germany", banks
undertake to comply with key quality standards such as securitisation
from existing loan portfolios only, an appropriate retention (at
least 5%) and no re-securitisations. This response to the key lessons
learned from the crisis places securitisation on a sound basis. First
transactions using this new standard may be completed this year.

'KfW is ready to make its contribution towards financing the
economic recovery. We are optimally placed for the funding required
in this connection. We also intend to support selected securitisation
transactions as an anchor investor, in order to help revitalise the
securitisation market and ultimately also help secure the supply of
credit to SMEs and the housing construction sector', said Bräunig.

For more detailed information, please refer to your press kit at:
www.kfw.de/press .

Originaltext: KfW
digital press kits: http://www.presseportal.de/pm/41193
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Contact:
Nathalie Drücke
KfW, Palmengartenstraße 5-9, 60325 Frankfurt
Kommunikation (KOM)
Tel. +49 (0)69 7431-2098, Fax: +49 (0)69 7431-3266,
E-Mail: nathalie.druecke@kfw.de, Internet: www.kfw.de