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KfW´s largest 10y USD Global due to Exceptional Demand

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With this transaction, KfW has responded nimbly to both the current yield environment and strong investor demand for top-quality longer-dated assets in an environment of limited supply.

Dr. Günther Bräunig, member of the Managing Board of KfW Bankengruppe and in charge of capital markets commented: "It is not only the largest but probably the most successful 10 year USD-bond we have ever issued. We never had such tremendous interest from large international investors before."

Settlement date of the bond is January 27th 2010 and it will mature on January 27th 2020. With a coupon of 4% p.a. and a reoffer price of 99.657% it yields 4.042% semi-annually. This corresponds to a yield pick-up of 38.5 basis points over the current ten-year US Treasury with maturity November 2019. The bond has an AAA/Aaa/AAA rating from Fitch Ratings, Moody's and Standard & Poor's as all KfW bonds have. Lead manager of the transaction are Goldman Sachs, JP Morgan und UBS; Co-Lead Managers are Bank of America / Merrill Lynch, Barclays, BNP Paribas, Citi, Deutsche Bank, HSBC, Morgan Stanley, Mitsubishi UFG, Nomura and Royal Bank of Canada CM.

The orderbook was opened on Tuesday London morning. Strong participation out of Asia resulted in an orderbook of over USD 3 bn after only a few hours. With the start of the US trading day on Tuesday there was continuous broad based demand from high quality US investors. Given the overwhelming demand, KfW was able to narrow the spread talk from mid swaps plus 30bp area to a range of 28bp to 30bp over mid swaps and decided to accelerate the close of books to noon New York time. The final orderbook amounted to a record volume of USD 6.33bn and enabled KfW to price a USD 4 bn transaction at the tight end of the price range at mid swaps plus 28. Until now, KfW has been the only non US Agency issuer able to sell 10-year global issues with such a success. "Since 2004 we have continuously offered long duration in USD global bonds, and we are now earning the benefits for our longtime commitment: investors appreciate the reliable issuance policy of KfW", said Bräunig.

The final orderbook was well diversified and of extremely high quality with over 130 individual orders from investors around the globe. This again demonstrates the strong interest for the excellent credit risk of KfW, whose bonds are explicitly guaranteed by the Federal Republic of Germany, as well as their appreciation of KfW's USD strategy.

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

Breakdown by investor type:

Banks: 35%
Central Banks: 34%
Funds: 30%
Others: 1%

Geographical Breakdown:

Americas: 42%
Asia: 34%
Europe: 21%
Middle East: 3%

KfW has announced a funding volume of EUR 70-75 bn for 2010. The Benchmark Programmes in EUR and USD will again account for the main share of the funds raised. With this transaction KfW has already reached circa 18% of its announced total funding volume for 2010.

Term Sheet KfW USD II/2010

USD 4 billion - 4.000% - 2010/2020

ISIN: US500769DP65
Issuer: KfW (Kreditanstalt für Wiederaufbau)
Guarantor: Federal Republic of Germany
Rating: AAA (Fitch Ratings)/Aaa (Moody's)/AAA (Standard & Poor's)
Size: USD 4,000,000,000.--
Maturity Date: 27th January 2010 - 27th January 2020
Coupon: 4.000% p.a., semi-annual coupon Payment Dates: January 27th and July 27th
Re-offer-Price: 99.657%
Yield: 4.042% semi-annually
Format: Global
Stock Market Listing: Luxembourg

Lead Managers (3):

Goldman Sachs
JP Morgan
UBS

Co-Lead Managers (10):

Bank of America / Merrill Lynch,
Barclays
BNP Paribas
Citi
Deutsche Bank
HSBC
Morgan Stanley
Mitsubishi UFG
Nomura Royal
Bank of Canada CM

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.

Quelle: presseportal
Weitere Informationen: www.kfw.de

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