KfW funding activities defy volatile markets

Frankfurt (ots) -

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- Strong demand for KfW bonds in changeable capital market
environment
- Funding volume of EUR 80 billion confirmed in 2012
- Solid funding contributes to fulfilment of promotional mission

In a strongly shifting market environment in the first half of
2012 KfW held its own in its funding activities. As of 30 June 2012
already about EUR 50.4 billion in funding for promotional business
was raised on the international capital markets.

The first half of 2012 was marked by two quarters that could not
have been more different. While the first three months were dominated
mostly by a positive market sentiment, thereby allowing a noticeable
easing on the part of financial market actors, the second quarter was
strongly shaped by returning insecurity and high volatility. However,
KfW was successful with its funding in both quarters. "We are very
pleased with the development thus far in our funding activities. We
have already raised nearly two thirds of our planned funding volume
for the entire year on the international capital markets. This
success confirms the unabated demand for bonds of first-class issuers
such as KfW", explained Dr Günther Bräunig, the member of the
Executive Board of KfW Bankengruppe in charge of capital markets.

The KfW Benchmark programmes in EUR and USD constitute the most
important pillar with a share of over 60% of total funding. This
illustrates that investors continue to prefer large volume and, in
particular, highly liquid bonds. Already in the first half of the
year, KfW was able to successfully issue benchmark bonds in both EUR
and USD in all benchmark maturities, especially in the long end of
the curve. Of note here is that in particular Asian central banks are
investing even more heavily than last year in KfW euro bonds.

In total KfW issued securities in more than 120 individual
transactions year-to-date. International investors again made
increasing use of the currency range offered by KfW. Until now KfW
has issued bonds in 14 different currencies (1st half of 2011: 10
currencies), including for the first time a bond in Chinese renminbi
on the Hong Kong financial market. In this way KfW has again expanded
its product range and further diversified its funding overall. "With
this RMB issue we have taken an important first step in a promising
market. We are closely watching the development of the Chinese
capital markets due to their globally increasing importance," said
Bräunig.

As a result of the regularly performed mid-year review of its
annual funding requirements, KfW is maintaining its funding volume of
EUR 80 billion for the year 2012 as a whole.

It has to be assumed that also in the second half of 2012 the
sovereign debt crisis will remain a determining factor on the
financial markets. KfW's funding strategy allows the bank to always
react flexibly, even in highly diverse market situations. While in
the current environment banks must fundamentally rearrange their
capital-market based funding structure, KfW can continue to rely on
its established refinancing mix based on the three pillars: benchmark
programmes, public bonds and private placements. "In a shifting
environment KfW thereby stands for continuity and stability,"
explained Bräunig. "I am convinced that our investors value the
product range and the reliability of KfW's capital market activities.
Thus our solid funding contributes to the fulfilment of our
promotional mission".

Detailed figures on KfW's funding in the first half of 2012 are
available under www.kfw.de/funding.

Pressekontakt:
KfW, Palmengartenstraße 5-9, 60325 Frankfurt
Kommunikation (KOM), Nathalie Drücke,
Tel. 069 7431-2098, Fax: 069 7431-3266,
E-Mail: nathalie.dreucke@kfw.de, Internet: www.kfw.de/newsroom