Entwurfsvolage für PowerPoint 2003 Präsentationen · KfW Bonds - In good times and bad times: always a safe investment / May 2018 2 . Bereich für Seitentitel ... KfW Group’s

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KfW Bonds - In good times and bad times: always a safe investment / June 2018

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Haftungsausschluss / Disclaimer

Die in diesem Dokument enthaltenen Informationen stellen kein Angebot zum Kauf von

Wertpapieren in den USA dar. Wertpapiere dürfen in den USA nur mit vorheriger

Registrierung oder ohne vorherige Registrierung nur aufgrund einer Ausnahmeregelung

verkauft oder zum Kauf angeboten werden. Ein Angebot zum Kauf von Wertpapieren wird

in den USA nur auf Grundlage eines Prospekts erfolgen, der von der KfW zur Verfügung

gestellt wird und detaillierte Informationen über KfW, ihre Geschäftsleitung, ihre

Jahresabschlüsse sowie Informationen über die Bundesrepublik Deutschland enthalten

wird.

The information contained in this document does not constitute 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. Any offering of 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.

KfW Bonds - In good times and bad times: always a safe investment / June 2018 2


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Agenda

1 KfW: Overview and Recent Developments

2 Funding at KfW

3

KfW: Overview and Recent Developments


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TOP 2


KfW in brief

› The promotional bank of the Federal

Republic of Germany, established in

1948 as a public law institution.

› Benefits from explicit and direct statutory

guarantee and institutional liability from

the Federal Republic of Germany.

› Regulated by the “Law concerning KfW”

and exempt from corporate taxes.

› Zero risk weighting of KfW’s bonds.(1)

› Supervision by the German Federal

Ministry of Finance and the German

Financial Supervisory Authority “BaFin”.

› Subject to certain provisions of German

and European bank regulatory laws by

analogy, in large part with effect from

January 1, 2016.

80%

20%

Shareholders

Bonn

Federal

Republic

of Germany

German

federal

states

out of

30

out of

343

Berlin

Rating

Credit Aaa AAA

Moody‘s S&P

Sustainability

“Prime” # 5 oekom Sustainalytics imug

(1) According to the standardized approach of the Capital Requirements Regulation (CRR)

Frankfurt

AAA

Scope

5


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KfW Group’s business activities KfW aims for sustainable improvement of the economic, social, and

ecological conditions of people’s lives. New business 2017: EUR 76.5bn

SME Bank

Promotion of small- and medium-sized enterprises,

business start-ups and other commercial clients in

Germany

Municipal and Private

Client Bank/ Credit

Institutions

Housing programmes, environmental and climate protection,

educational finance for private clients in Germany as well as

financing for public clients (e.g., municipalities, regional

promotional banks)

Export & project

finance

Customized financing for exports and

project & corporate financing world-wide

Promotion of

developing countries

& emerging

economies

KfW’s public (KfW Development Bank) & private sector

(DEG) development cooperation activities

Financial markets ABS & Green-Bond-Portfolio

29%

39%

18%

13%

2%

Based on year-end 2017 data.

Environment

investment quota:

Domestic

SME quota: 43% 44%

New business for environment and climate

protection in % of total new business volume.

New business for SMEs in % of total new

domestic business volume.

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Proven and successful business model

Customer Customer’s

bank

Capital

markets

Institution owned by

the Federal

Republic and the

federal states

State

liability

Defined by

KfW Law

Promotional

mandate

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KfW Group’s economic risk-bearing capacity Satisfies a confidence level of 99.99%, decrease of excess coverage

primarily due to adjustments to our credit risk model.

8

Common Equity Tier 1 capital

Operational risk

Market risk Credit risk

Economic risk-bearing capacity

(in EUR mn as of 31.12.2017; confidence level 99.99%)

11,255

(8,299)

5,242

(5,450)

1,598

(1,033)

27,347

(25,890)

18,228

(14,919)

27,347

(25,890)

9,119

(10,971)

Project risk &

Hidden burdens

133

(137)

figures as of 31.12.2017

(figures as of 31.12.2016)

20.6% Tier 1 ratio: Total capital ratio: 20.6%

Excess coverage

Total capital

Economic capital requirement

Based on year-end 2017 data.


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Allocation of the economic capital for credit risk Strong focus on Germany and financial industry due to business model

By region By sector

Credit risk of EUR 8,299mn at year-end 2016 includes loans, securities, investments and derivatives. Based on year-end 2016 data.

81%

6%

2% 3%

2% 3% 2% 1% Germany

Euro-area countries (excl.Germany)

EU countries (excl. euro-areacountries and Germany)

Europe outside EU

Africa

Asia (incl. Australia and NewZealand)

Latin America

North America

81%

4% 4%

3%

1%

1%

1%

5%

Financial sector

Consumer/retail

Financialinvestment/funds

Energy/environment

Commodities

Transport infrastructure

Essential goods

Other

81% Exposure to

Germany:

Exposure to

financial sector: 81%

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Business performance

Total promotional business volume in EUR bn

› About 2/3 domestic and

1/3 international business.

› Slight decrease in 2017

as planned.

Total assets in EUR bn

› Germany’s 3rd largest

credit institution in terms of

total assets.

Consolidated profit in EUR bn

› Decreasing profit in 2017

as predicted, but higher

than expected.

› Very good, but decreasing

valuation result due to

non-recurring effects.

Capital ratio (Tier I) in %

› BaFin approval as

advanced IRBA institution

since 6/2017.

› Decrease in 2017 mainly

due to effects of the IRBA

approval process.

489 503 507

472 474

2014 2015 2016 2017 Q1 2018

0.2

1.5

2.2 2.0

1.4

2014 2015 2016 2017 Q1 2018

16.1 15.8

*

20.6

14.1

18.3

22.3 20.8

2014 2015 2016 2017 Q1 2018

18.9

74.1 79.3 81.0

76.5

2014 2015 2016 2017 Q1 2018

10

*BaFin minimum requirement at

year-end 2018.


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Key financial figures of KfW Group (IFRS) Solid business performance

(1) In 2016, calculated for internal purposes based on the voluntary application of all material IRBA rules. In 2017, calculated based on the IRBA

approach for a large part of the portfolio. For the remaining sub-portfolios KfW applies the CRSA approach until full IRBA approval.

2016 2017 Q1 2018

Business activities (in EUR bn) – for the period

Promotional business volume 81.0 76.5 18.9

Income statement key figures (in EUR mn) – for the period

Operating result before valuation & promotional activities 1,898 1,661 374

Consolidated profit 2,002 1,427 228

Consolidated profit before IFRS effects from hedging 1,769 1,192 238

Balance sheet (in EUR bn) – at the end of the period

Total assets 507.0 472.3 474.5

Equity 27.1 28.7 28.9

Volume of business 609.2 572.2 577.9

Key regulatory figures (in %)(1) – at the end of the period

Tier 1 capital ratio 22.3% 20.6% 20.8%

Total capital ratio 22.3% 20.6% 20.8%

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Highlights in 2017


› In 2017, the total promotional business volume decreased to EUR 76.5bn from EUR 81.0bn in 2016 (-5.6%) as planned.

› Domestic promotional business decreased to EUR 51.8bn from EUR 55.1bn in 2016. This decrease was primarily driven by

a decrease in commitments for housing investment programs in the business sector Municipal and Private Client Bank/

Credit Institutions. Housing, however, is still the largest sector in KfW’s domestic business (EUR 18.9bn).

› International business is lower than in the previous year period (EUR 23.5bn vs. EUR 24.9bn) due to a decrease at KfW

IPEX-Bank. A decrease in export and project finance (EUR 16.1bn to EUR 13.8bn) was partly offset by increasing

commitments in the promotion of developing countries and emerging economies (EUR 8.8bn to EUR 9.7bn).

› KfW extended its green bond investment activities: Target volume of promotional green bond portfolio doubled to

EUR 2bn. In 2017, KfW invested EUR 346m in 13 green bonds.

› At EUR 1.4 billion, the resulting consolidated profit was down on the previous year as expected, but exceeded projections.

› KfW received approval from BaFin to calculate its regulatory capital requirements in accordance with the advanced IRBA

for the vast majority of its portfolio as of June 30, 2017. With 20.6% tier 1 ratio, KfW fully complies with BaFin minimum

requirements of 14.3% (incl. a SREP surcharge of 5%) at year-end 2017. The additional SREP surcharge will increase to

5.75% in 2018.

› KfW is planning a funding volume of EUR 70 to 75bn for 2018.

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Funding at KfW

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Core currencies: EUR & USD

EUR & USD

other


KfW’s funding highlights in 2017

› 145 single transactions in 10 different currencies account

for a total funding of EUR 78.2 bn.

› 7 "Green Bonds – Made by KfW" issuances in EUR,

USD, AUD and GBP with an equivalent of EUR 3.7bn. The

EUR 2bn issuance marks KfW's largest green bond so far.

› 12 benchmark bonds (plus 4 taps) issued in EUR (2x 5y,

2x 7y, 2x 10y) and USD (2y, 3x 3y, 2x 5y) accounting for

EUR 55.4 bn raised.

› Particularly strong demand for large and liquid benchmark

bonds: 71% of total funding (the highest level ever).

› EUR share was up at 53% of total funding volume (vs.

36% in the previous year period), exceeding the USD

share that fell to 34% (vs. 47% same period in 2016).

› Excellent sustainability and credit ratings.

Awards

Best Overall Issuer

Best SSA Issuer

Best GBP Issuer

Best Overall ECP Issuer

The World‘s Safest Bank Best Supranational and

Agency Deal in Euros

Most Impressive

Government Agency

Green/SRI Bond Issuer

88%

60

70

80

2016 2017

Increased funding needs in 2017

(EUR bn)

72.8

78.2

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Explicit and direct guarantee from the

Federal Republic of Germany Basis of KfW’s funding

§1a of the Law concerning KfW:

The Federal Republic guarantees all obligations of KfW

in respect of loans extended to and debt securities issued by KfW,

fixed forward transactions or options entered into by

KfW and other credits extended to KfW as well as

credits extended to third parties inasmuch as they are expressly

guaranteed by KfW.

› Guarantee established in 1998

› Defined by law

› Direct, explicit and unconditional

KfW Bonds - In good times and bad times: always a safe investment / June 2018 15


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KfW’s rating

KfW’s AAA-Rating

is based on its:

• explicit

government

guarantee

• high quality

assets

• good access to

liquidity

Long-term Rating

Aaa stable P-1

AAA stable S-1+

AAA stable A-1+

Outlook Short-term Rating

Fin

an

cia

l R

ati

ng

E

SG

Ra

tin

g

Among the 2 best out of 30 assessed development banks

“Prime”: among the best-rated institutions in its peer group

No. 5 out of 343 listed and non-listed banks

KfW’s top ESG

ratings

are assigned by

independent rating

agencies

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KfW is among the world’s best ESG-rated

financial institutions

SRI eligibility of KfW bonds KfW follows a holistic approach which puts emphasis on the overall sustainability

Increasing awareness of investors to climate-themed or socially responsible investing

KfW is one of the world’s largest financiers of

environmental investments with around EUR

200bn invested within the last 10 years

› Approx. 44% of KfW’s new funds raised are spent on climate and environmental protection measures.

› Approx. 11% of KfW’s new funds raised are used for financings of developing and transition countries.

KfW bonds offer attractive investment opportunities for socially responsible investors

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KfW’s funding: three pillar strategy A well-structured range of products offers suitable opportunities

for various investors’ needs

› Large and liquid bonds in

EUR and USD

› At least 3, 5, 7 and 10 year

benchmark maturities each

year

› Target benchmark sizes:

› EUR 3 – 5 bn

› USD 3 – 5 bn

› EUR-taps up to a minimum

volume of EUR 6bn

› Large and liquid bonds

› in non-benchmark

maturities with or without

call option

(EUR and USD)

› in strategic markets

(GBP, AUD, SEK, JPY,

CNH, NOK, CHF …)

› in further currencies

› Green Bonds

› Other structured public

bonds in various currencies

› Customized bonds for

investor needs

› Flexible in currency,

structure and maturity

2017: 16 transactions 2017: 73 transactions 2017: 56 transactions

Other public transactions Private placements Benchmark programme

2017: EUR 78.2 bn

2018 target: EUR 70-75 bn

71% 25%

4%

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Capital markets Strong presence in the capital markets

Capitalization (as of 31.12.2017)

81%

9%

4%

6%

Capital market

Money market

Other liabilities (primarily collateral from derivativetransactions)Equity

Total

EUR 450.9bn

78.2

72.8

65.4

57.4 62.6

70-75

0

10

20

30

40

50

60

70

80

90

2013 2014 2015 2016 2017 2018

Funding volume in EUR bn

Benchmark bonds Public transactions Private placements

Already issued

in 2018:

EUR 35.6bn

as per May 31st


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0

10

20

30

40

50

60

70

80

EUR USD AUD GBP JPY Others0

10

20

30

40

50

60

70

80

KfW’s funding by currencies and instruments Benchmark bonds are key – core currencies Euro and US Dollar

Benchmark bonds

Instruments (in %)

Currencies (in %)

Public transactions Private placements

2017 (EUR 78.2 bn) 2013 (EUR 65.4 bn) 2014 (EUR 57.4 bn) 2015 (EUR 62.6 bn) 2016 (EUR 72.8 bn)


Highlights in 2017:

› 12 Benchmark bonds (plus 4 taps) in EUR and USD. In 2017, benchmark bonds accounted for 71% of total

funding.

› The challenging market environment led to a particularly flexible funding strategy.

› Unlike the year before, EUR regained in 2017 the highest share (approx. EUR 41.7bn, 53% of total funding) in

the currency mix followed by USD (approx. EUR 26.9bn equivalent, 34% of total funding).

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KfW’s global investor base Distribution of KfW’s EUR-Benchmark investor base


€

based on allocations

0,0

10,0

20,0

30,0

40,0

50,0

60,0

2013 2014 2015 2016 2017 Jun 2017

in % Geographic Distribution

Europe ex Germany Germany

Asia Americas

Other

0,0

10,0

20,0

30,0

40,0

50,0

60,0

2013 2014 2015 2016 2017 Jun 2018

in % Investor Distribution

Central Banks Banks

Asset Mgt. Ins. & Pension

Other

Asia

Central Banks

Asset Mgt.

Ins. & Pension Other

Americas

Other

Europe ex

Germany

Germany

Banks

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Inhalte

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KfW’s global investor base Distribution of KfW’s USD-Benchmark investor base


$

2013-2017: based on allocations. 2012: based on orders.

0,0

10,0

20,0

30,0

40,0

50,0

2012 2013 2014 2015 2016 2017

in % Geographic Distribution

Asia MEA Europe

Americas Other

0,0

10,0

20,0

30,0

40,0

50,0

60,0

70,0

2012 2013 2014 2015 2016 2017

in % Investor Distribution

Central Banks Banks Asset Mgt.

Ins. & Pension Other

Americas

Europe

MEA

Other

Asia

Other

Central Banks

Banks

Asset Mgt.

Ins. & Pension

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KfW’s Benchmark-Programmes in EUR and USD

Basic features

› Large-volume global bonds (SEC registered)

› Government surrogate, 0% risk weighting

› Benchmark maturities

› Target issue sizes: EUR 3 – 5 bn

› Transparent syndication process

› High liquidity: KfW bonds are traded globally by approx. 25

banks

For more information about the KfW Benchmark-Programmes please refer to

www.kfw.de/investor-relations or to Bloomberg: KfW <GO>

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-

1.000

2.000

3.000

4.000

5.000

6.000

7.000

-120

-70

-20

30

80

Amount Outstanding Swap Spread Gov. Spread


KfW EUR-Benchmark-Programme

KfW’s EUR benchmark curve across the maturity spectrum

Current outstandings

Spread

in bps

Amount

Outstanding in

EUR million

Issued in 2018

€

› Amounting to 53% (vs. 35% in 2016) of KfW's total funding EUR was the main funding

currency in 2017.

› KfW highly committed to liquidity and regular issuance across major maturities.

› Despite low yields solid secondary market performance.

› Current outstanding volume: EUR 163 bn.

24


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7,60

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4,40 4,00 3,00 3,40

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KfW USD-Global-Programme

Current outstandings

KfW’s USD global curve across the maturity spectrum

-

1.000

2.000

3.000

4.000

5.000

6.000

7.000

-70

-20

30

80

130


Amount

outstanding in

USD million

Spread

in bps

Issued in 2018

$

› Beside EUR KfW’s most important strategic market with a share of 34% of overall

funding activity in 2017.

› High commitment to liquidity – permanent review of secondary market liquidity.

› Current outstanding volume: USD 128bn.

› Strategic USD-Global programme complemented by off-the-programme fixed and floating rate

issues serving specific investors’ needs (esp. short dated).

25


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8,20

6,00

4,60

7,60

8,20

1,40

1,80

1/2

1/2

1/1








0,70 0,30

4,40 4,00 3,00 3,40

1/2 1/2

1/3 1/3 1/3

11,40 10,40 1/1


notwendig ist

12,40

135 138 137.5 137.5

16 16.5 19 32.5

0

20

40

60

80

100

120

140

160

2014 2015 2016 2017

in billion EUR

TotalOutstandings(aggregateprincipal)

New Issuance(aggregateprincipal)

Total Turnover*

The liquidity of KfW’s benchmark bonds

Characteristics, HQLA assessment & turnover statistics

26

Characteristics that support the liquidity in

KfW benchmark bonds:

• Public sector entity in the EU

• Risk weight: 0% according to CRR/Basel III

• PSPP eligibility: 33% limit

• Frequent issuer of benchmark bonds in core

currencies EUR and USD

• Three lead manager each benchmark bond

• Large-volume benchmark bonds

(sizes of 3 – 6 bn EUR/USD)

• Traded by approx. 30-40 banks OTC and at

various stock exchanges

• Wide order book diversification

(Ø more than 100 investors)

109.5 107.5 116 125

22 25

34 25

0

20

40

60

80

100

120

140

160

2014 2015 2016 2017

in billion USD

Turnover in KfW benchmark bonds in secondary markets:

Total turnover in KfW benchmark bonds is shown in relation to the

total outstandings and the new issues of EUR and USD benchmark

bonds of each funding year, respectively.

*No warranty is given as to the completeness or accuracy of the total turnover data which has been

supplied by 15-20 different banks and accumulated but not verified by KfW.

€

$ Bonds and notes issued by KfW are in

principle eligible in the EU as level 1 assets

pursuant to Article 10 para. 1 lit. (c)(v) of the

Commission Delegated Regulation (EU)

2015/61 of October 10, 2014.

KfW’s bonds and notes have been assessed

as “HQLA US Eligible Assets” by Bloomberg,

see Bloomberg, KFW Corp <GO>, DES

<GO>, 12 <GO>, 58 <GO>



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1/2

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0,70 0,30

4,40 4,00 3,00 3,40

1/2 1/2

1/3 1/3 1/3

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Other public transactions

Diversification of investor base

EUR

USD

› Issues outside Benchmark-Programmes

› Non-benchmark maturities

› Callables, floaters

AUD

BRL

CNH

GBP

INR

JPY

MXN

NOK

NZD

SEK

SGD

TRY

ZAR

…

› Complementary currencies to cover different capital markets

› Complete yield curve with the aim to enhance liquidity through taps

› Expand the programme to new currencies/markets

› Institutional and retail as well as local investor base

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6,00

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1/2 1/2

1/3 1/3 1/3

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notwendig ist

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1.900

4.800

Green Bond 1.000

1.350 1.450

2.522

1.250 1.000 200

750

3.035

1.500 700

300

-

1.000

2.000

3.000

4.000

5.000

6.000

-80

-30

20

70

120


KfW in GBP

KfW is one of the leading SSA issuers in the Sterling market

KfW’s GBP curve across the maturity spectrum (only fixed rate lines outstanding)

› 15 fixed rate lines outstanding over the entire curve up to

2037..

› Fixed rate issuance is complemented by lightly structured

transactions (primarily Step-ups, Callables, FRNs).

› Listing Luxembourg possible.

Characteristics

› Important strategic market for KfW: GBP funding for KfW

totals GBP 4.7bn in 2017 (2016: GBP 5.2bn).

› GBP remains the 3rd most important currency after EUR and

USD in 2017 with a share of 6.9% of KfW's total funding.

› KfW is the biggest GBP bond issuer in SSA segment.

› 2 new bond lines (with maturities in March 2020 and

December 2022) as well as a green bond tap issued in 2017.

Highlights

New lines issued in

2018

Amount

outstanding in

GBP million Spread

in bps

£

28


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6,00

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1,40

1,80

1/2

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0,70 0,30

4,40 4,00 3,00 3,40

1/2 1/2

1/3 1/3 1/3

11,40 10,40 1/1


notwendig ist

12,40


KfW in AUD

KfW is the largest SSA Kangaroo issuer

KfW’s AUD curve across the maturity spectrum (only fixed rate lines outstanding)

› KfW maintains strategic approach to the Kangaroo market

and is a regular issuer.

› With 15 fixed rate lines outstanding, KfW offers the widest

choice of maturities in the Kangaroo market.

› KfW is the largest SSA issuer in terms of issued and

outstanding volume (AUD 26.2bn).

› KfW Kangaroo bonds are RBA repo eligible.

Characteristics

› 2017 AUD 2.75bn issued vs. 2016 AUD 3.25bn.

› 4th most important funding currency in 2016 (2.5%).

› KfW stays committed to extend its curve and to offer current

coupon bonds through the introduction of new lines.

Highlights

2.450

2.100

2.500 2.650

Green Bond 1.000

2.700

1.450

2.000

2.250

1.000

300

1.700 1.550

950

400

-

500

1.000

1.500

2.000

2.500

-20

-10

0

10

20

30

40

50

60

KFW 3 3/407/18/18

KFW 401/16/19

KFW 6 1/412/04/19

KFW 2 3/404/16/20

KFW 2.407/02/20

KFW 608/20/20

KFW 2.802/17/21

KFW 6 1/405/19/21

KFW 5 1/202/09/22

KFW 2.906/06/22

KFW 2.803/07/23

KFW 503/19/24

KFW 402/27/25

KFW 3.209/11/26

KFW 3.203/15/28

Swap Spread Gov. Spread Amount Outstanding New lines issued in 2018

Amount

outstanding in

AUD million

Spread

in bps

A$

29


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6,00

4,60

7,60

8,20

1,40

1,80

1/2

1/2

1/1








0,70 0,30

4,40 4,00 3,00 3,40

1/2 1/2

1/3 1/3 1/3

11,40 10,40 1/1


notwendig ist

12,40


Japanese retail (Uridashi) Predominantly structured JPY

(Nikkei-Linked and Dual Currency),

Available also in other currencies e.g. AUD, USD

Private placements (MTNs) Mostly structured issues, of which JPY/AUD-linked

PRDCs are predominant;

Minimum issue size JPY 100 mn

2017 › EUR 1.796 bn equivalent raised

via 24 transactions › No issuance


via 36 transactions › JPY 1.00 bn raised via 2 trades







Outstanding:

› Global JPY 125bn 2.05%, due February 2026

› Global JPY 50bn 2.60%, due June 2037

Public issues

KfW in JPY

¥

30


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1,80

1/2

1/2

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0,70 0,30

4,40 4,00 3,00 3,40

1/2 1/2

1/3 1/3 1/3

11,40 10,40 1/1


notwendig ist

12,40


KfW in NOK

3.300

2.500

1.500

1.000

2.500

1.000 1.000 1.000 750

200

900 750

500 250

1.100

400

-

500

1.000

1.500

2.000

2.500

3.000

3.500VPS

VPS

A strong addition to KfW’s funding programme

Amount outstanding

in NOK million

› Flexibility in deal/tap size.

› Fixed and floating rate notes possible.

› Listing Luxembourg.

› Issuance targeting domestic (via VPS-Clearing with

stand-alone documentation) and retail/other institutional

accounts (documentation under KfW EMTN programme).

Characteristics

› NOK funding for KfW in 2017 totals NOK 2.5bn (2016: NOK

6.25bn).

› 4 transactions in total; thereof 1 new bond line with maturity

in November 2020 and 3 taps.

Highlights

KfW’s NOK curve across the maturity spectrum

FRN

NOK VPS

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6,00

4,60

7,60

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1/2

1/1








0,70 0,30

4,40 4,00 3,00 3,40

1/2 1/2

1/3 1/3 1/3

11,40 10,40 1/1


notwendig ist

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KfW in SEK

1.500 1.800

3.000

1.000

1.600

1.000 1.000

6.600

2.350

1.000

5.000

2.000

-

1.000

2.000

3.000

4.000

5.000

6.000

7.000

SGB SGB

SGB

Amount outstanding

in SEK million KfW’s SEK curve across the maturity spectrum

› Flexibility in deal/tap size.

› Fixed and floating rate notes possible.

› Swedish Government Bonds 1047, 1051, 1052, 1054

matches already in place.

› Listing Luxembourg.

Characteristics

› In 2016 and 2017, KfW evolves its SEK funding activities

into Green Bonds – Made by KfW in public format as well

issues further private placements.

› The first SEK Green Bond transaction had a deal size of

SEK 1bn and attracted domestic and international

investors.

Highlights

FRN

SEK Expanding green activities into Nordic region

32


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8,20

6,00

4,60

7,60

8,20

1,40

1,80

1/2

1/2

1/1

Bereich für

Inhalte

0,70 0,30

4,40 4,00 3,00 3,40

1/2 1/2

1/3 1/3 1/3

11,40 10,40 1/1 12,40

Gesperrte Bereiche – Nicht mit Inhalt füllen!






notwendig ist

Net proceeds from the issuance are used for financing projects for the power generation from wind,

water, photovoltaics and biomass under KfW’s programme “Renewable Energies - Standard“

2017: 4 bonds plus 3 taps amounting to EUR 3.7bn ≈ 5% of total funding

Green bonds outstanding: EUR 12.9bn; market share of 6%

EUR, USD, AUD, GBP and SEK with potentially more currencies to come

Comparable to other KfW bonds regarding structure, pricing, rating


Green Bonds – Made by KfW Highlights of KfW’s green bonds

1

High credibility › Independent 2nd opinion for KfW’s Green Bonds by CICERO(3)

› Green Bond rating "b+" by oekom

› KfW is among global ESG leaders

› Excellent credit quality, large size

Environmental and social impact › Estimated GHG reduction of 800 tons(1) p.a. per EUR 1 million green bond investment

› Creation and protection of jobs

› Reduction of energy imports to Germany and fossil burning costs

› Environmental impact evaluated by an independent external research institution (since 2014 ZSW(2))

2

(1) Average value for 2010-2014 based on ZSW evaluated numbers. Current and future impact might differ

(2) ZSW: Center for Solar Energy and Hydrogen Research Baden-Württemberg 3) CICERO: Center for International Climate and Environmental Research Oslo

Cicero graded KfW

Green Bonds as

„dark green“

which is the best

grade achievable

33


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0,70 0,30

4,40 4,00 3,00 3,40

1/2 1/2

1/3 1/3 1/3

11,40 10,40 1/1


notwendig ist

12,40


KfW in RMB

KfW´s long-term goal is to tap the Panda bond market

2012: KfW’s inaugural

Offshore RMB bond

› Largest offshore

transaction issued by a

non-Asian SSA

KfW is convinced of the increasing global importance of the Renminbi.

KfW has by now established itself in the RMB Offshore market. In addition KfW supported the Financial Centre

Frankfurt to be a Renminbi Centre in Europe.

2014: KfW’s 2nd public

Offshore RMB bond

› First KfW RMB bond

ever listed in Frankfurt

› RMB 1bn, due May 2016

2015 – 2017: further

issuances of public bonds

and private placements

› Outstanding amount of Public

bonds: RMB 2.35bn

› Outstanding amount of Private

Placements: RMB 1.8bn

› Documentation: EMTN

› Public transactions and private

placements

› Listing Frankfurt or Luxemburg

› International and local investor

base

Characteristics of

KfW´s Offshore Bonds

RMB

KfW´s long-term goal is the issuance of its inaugural Panda Bond. While intensely monitoring the developments in

Chinese capital markets, KfW is making internal preparations for a first Panda bond.

34


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6,00

4,60

7,60

8,20

1,40

1,80

1/2

1/2

1/1








0,70 0,30

4,40 4,00 3,00 3,40

1/2 1/2

1/3 1/3 1/3

11,40 10,40 1/1


notwendig ist

12,40


Private placements (1)

Current product development

Targets

› Customized products for investor needs

› Flexible approach

› Broad investor diversification in various currencies and

structures

Key figures 2017

› EUR 3.6 bn

› 56 transactions

› 5 currencies (EUR, USD, GBP, CNY, SEK)

Current product

development

KfW satisfies current investor’s requirements:

› Increased demand for EUR Private Placements

› First KfW Green Bond as private placement issued

› KfW satisfies investor´s preferences for yield enhancing

products in combination with an AAA credit quality

Currencies 2017

54%

20%

22%

4%

EUR

USD

GBP

SEK

CNY

Figures for 2017 are as of 31 December 2017

35


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6,00

4,60

7,60

8,20

1,40

1,80

1/2

1/2

1/1








0,70 0,30

4,40 4,00 3,00 3,40

1/2 1/2

1/3 1/3 1/3

11,40 10,40 1/1


notwendig ist

12,40


Private placements (2)

Structures

Highly diversified:

› Step-up callables

› Range accruals

› Zeros

› CMS-linked structures

› FX-linked structures

› etc.

Redemption profile:

› Bullet

› Callable

› TARN

› Trigger

Funding policy

Minimum size:

› EUR, USD 10 mn

› USMTN 5 mn

› JPY 100 mn (MTN)

› JPY 1 bn (Uridashi)

Minimum non call 6 months,

multi-callable structures can be

quarterly callable for

› 50 mn (EMTN)

› 10 mn (US-MTN)

Minimum non call 3 months

and quarterly callable for

› JPY-MTN and Uridashi

Method of distribution:

› Underwriting

KfW offers

tailor-made

structures to

investors

36


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6,00

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7,60

8,20

1,40

1,80

1/2

1/2

1/1








0,70 0,30

4,40 4,00 3,00 3,40

1/2 1/2

1/3 1/3 1/3

11,40 10,40 1/1


notwendig ist

12,40


“Namensschuldverschreibungen”

› Investor base: German insurances and pension funds

› Product variations: fixed rate with step-up and zero structures with optional issuer call options as well as double-/triple-or-quit

structures

› Stand-alone KfW documentation

› Assignments possible of EUR 1 mn

› Minimum issuance volume of EUR 10 mn

Characteristics

Due to increased investor demand, KfW

offers “Namensschuldverschreibungen”

since August 2009

Solid investor demand and constant

broadening of investor base

“Schuldscheindarlehen” remain available

Issuance volume1 (in EUR mn)

1 Issuance volume comprises “Namensschuldverschreibungen“ and “Schuldscheindarlehen“

900

1900

190

800

335

183

755

414

0 500 1000 1500 2000

2010

2011

2012

2013

2014

2015

2016

2017

37


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8,20

6,00

4,60

7,60

8,20

1,40

1,80

1/2

1/2

1/1








0,70 0,30

4,40 4,00 3,00 3,40

1/2 1/2

1/3 1/3 1/3

11,40 10,40 1/1


notwendig ist

12,40


Money market Its CP programmes make KfW an important issuer

in the money market as well

As of 31 December 2017 EUR-CP

(in mn)

USD-CP (in mn)

Programme volume EUR 60,000* USD 10,000

Issue volume EUR 107,756 USD 47,276

Number of transactions 675 400

Average ticket volume EUR 160 USD 118

Average maturity 115 days 54 days

Outstanding volume

(at the end of period) EUR 34,671 USD 8,083

Targeted outstanding volume +/- EUR 35,000 +/- USD 7,500

EUR / USD-CP

Programme

Guarantor Federal Republic of

Germany

Currencies EUR-CP: multicurrency

USD-CP: USD

Issuer KfW

Rating P-1 (Moody’s) / S-1+ (Scope

Ratings) / A-1+ (S&P)

Maturities Up to 1 year

* The programme volume was increased from EUR 50bn to EUR 60bn on November 10, 2016.

38


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8,20

1,40

1,80

1/2

1/2

1/1








0,70 0,30

4,40 4,00 3,00 3,40

1/2 1/2

1/3 1/3 1/3

11,40 10,40 1/1


notwendig ist

12,40


KfW in the capital markets in 2018

Strong presence in the capital markets with funding target

of EUR 70-75 billion.

KfW's outstanding access to the capital markets, including

in USD, facilitates the issue of liquid global bonds.

KfW relies on its proven 3-pillar-strategie. EUR & USD

remain key currencies in 2018 (2017: 87.7%).

The benchmark program is the most important funding

source.

GBP, AUD and Uridashi will remain important for KfW’s

funding mix.

Continuing commitment to green bonds.

39


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6,00

4,60

7,60

8,20

1,40

1,80

1/2

1/2

1/1








0,70 0,30

4,40 4,00 3,00 3,40

1/2 1/2

1/3 1/3 1/3

11,40 10,40 1/1


notwendig ist

12,40


Disclaimer

This document is provided for information purposes only. This document may not be reproduced

either in full or in part, nor may it be passed on to another party. It constitutes neither an offer nor

an invitation to subscribe or to purchase securities, nor is this document or the information

contained herein meant to serve as a basis for any kind of obligation, contractual or otherwise. In

all legal systems this document may only be distributed in compliance with the respective

applicable law, and persons obtaining possession of this document should familiarise themselves

with and adhere to the relevant applicable legal provisions. A breach of these restrictions may

constitute a violation of US securities law regulations or of the law applicable in other legal

systems. The information contained in this document is historical and speaks only as of its date.

KfW disclaims any intention or obligation to update or revise the information contained in this

document. By accessing this document you acknowledge acceptance of these terms.

40


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6,00

4,60

7,60

8,20

1,40

1,80

1/2

1/2

1/1








0,70 0,30

4,40 4,00 3,00 3,40

1/2 1/2

1/3 1/3 1/3

11,40 10,40 1/1


notwendig ist

12,40


Photo credits/references

Titel slide: FischerAppelt / Christian Lohfink

Slide 4: full-page image / KfW / Stephan Sperl

Slide 5, Picture 1: KfW Photo Archive / Rüdiger Nehmzow

Slide 5, Picture 2: KfW Photo Archive / Angelika Kohlmeier

Slide 5, Picture 3: KfW Photo Archive / -

Slide 6, Picture 1: KfW Photo Archive / -

Slide 6, Picture 2: KfW Photo Archive / Jens Steingässer

Slide 6, Picture 3: KfW Photo Archive / Bernhard Schurian

Slide 6, Picture 4: KfW Photo Archive / photothek.net

Slide 6, Picture 5: KfW Bankengruppe / Jens Steingässer

Slide 13: full-page image / KfW / Stephan Sperl

Slide 15: Deutscher Bundestag / Lichtblick / Achim Melde

Slide 23, 24, 25: FischerAppelt / Christian Lohfink

Slide 33, 39: gettyImages, plainpicture / Piotr Krzeslak, Cultura

41


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8,20

6,00

4,60

7,60

8,20

1,40

1,80

1/2

1/2

1/1








0,70 0,30

4,40 4,00 3,00 3,40

1/2 1/2

1/3 1/3 1/3

11,40 10,40 1/1


notwendig ist

12,40


Treasurer of KfW: Ext.

Dr. Frank Czichowski - 2165

Treasury:

Markus Schmidtchen - 4783

Capital Markets:

Petra Wehlert - 4650

Otto Weyhausen-Brinkmann - 4652

Alexander Liebethal - 4656

Investor Relations:

Jürgen Köstner - 3536

Nicolas Pfuhl - 8623

Dorota Reiter - 8537

Philipp Mahn - 2056

Serviceline - 2222

KfW Bankengruppe

Palmengartenstrasse 5–9

60325 Frankfurt am Main

Fon +49 69 7431 - Ext

Fax +49 69 7431 - 3986

[email protected]

Bloomberg: KfW <GO>

www.kfw.de/investor-relations

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