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KfW Bonds - Rely on the safe haven / June 2020

Rely on the safe haven.


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.


Overview and Recent Developments KfW:

KfW in brief

Shareholders

› 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 by the

Federal Republic of Germany.

› Regulated by the "Law concerning KfW" and

exempt from corporate taxes.

› Zero risk weighting of KfW’s bonds.(2)

› 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%

Bonn

Federal

Republic

of Germany

German

federal

states

Berlin Frankfurt

Sustainability

Credit

Aaa

AAA

Moody‘s

S&P

AAA Scope

TOP 2 out of 19

out of 77

"Prime"

TOP 3

ISS ESG

Sustainalytics

imug

Rating(1)

Cologne (DEG)

Headquarters: Frankfurt am Main Branches: Berlin, Bonn

Germanyʼs flagship

development agency

German credit Professionally supervised and

regulated

MSCI AAA (1) A rating is not a recommendation to buy, sell or hold securities. Ratings are subject to revision or withdrawal at any time by the assigning rating organization. Each rating should be evaluated independently of any other rating.

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



About 80 representative offices

Worldwide presence 6.705

1948 1950 1960 1970 1980 1990 2000 2010 2016 2017 2018 2019

Tiflis

Yerevan

Amman

Kampala

Windhoek

Pretoria

Lusaka

Skopje Ankara

Kyiv Belgrad

Priština Sarajevo

Tirana

Berlin

Frankfurt

Istanbul

London

Brussels

Cologne

Podgorica

Bonn

Cairo

Ramallah-Al-Bireh

Addis Abeba

Kigali

Rabat

Dakar

Accra

Ouagadougou

Yaoundé

Bamako

Cotonou

Kinshasa

Niamey Manila

Baku Beijing

Jakarta

Kabul Islamabad

Ulan Bator

Hanoi Dhaka

Bishkek Taschkent

Dushanbe

Bangkok

Phnom Penh

Kathmandu New Delhi

Mumbai

Moscow

Lima

La Paz Brasilia

Managua

Tegucigalpa

Mexiko City

São Paulo

Quito

Bogotá

Guatemala City

New York

Sanaa

Maputo

Daressalam

Lilongwe

Abu Dhabi

Johannesburg

Nairobi

San Salvador

Singapore

Bujumbura

Rangoon

Tunis

Mazar-e-Sharif

Vientiane

Ho Chi Minh City

Chişinău

Lomé

Beirut

Number of KfW employees

Abidjan

http://kfw-intranet/public/fz/publish/bueros/lo_15.html

KfW Capital

Promotion of Developing Countries

& Emerging Economies Financial Markets

New business 2019: EUR 77.3bn (+2% yoy)

KfW Group’s business activities

Individual financings for municipal & social infrastructure, customized financing for FI & promotional institutes of German federal states

Customized Finance & Public Clients

Subsidiary (100%, est. 2018) to carry out KfW’s entire private equity & venture capital business

KfW’s public (KfW Development Bank) & private sector activities (DEG) in developing countries

ABS/ABCP & Green Bond Portfolio

<1%

Export & Project Finance

(KfW IPEX-Bank)

29% 14% 2%

Environment

investment ratio:

New business for

environment and climate

protection in % of total new

business volume.

New business for SMEs in

% of total new domestic

business volume. 38%

Do

me

stic

In

tern

atio

na

l

Domestic

SME ratio: 40%

Subsidiary (100%, est. 2007) for exports and project & corporate financing world-wide

46%

Standardized financing products for SMEs, business founders, start-ups, self-employed professionals and private individuals

SME Bank & Private Clients

Based on 2019 data.


9%

KfW involves commercial banks in its domestic activities

Proven and successful business model


Backed by Understanding II

reached with EU Commission


Credit risk of EUR 9,057mn at year-end 2019 includes loans, securities, investments and derivates. Based on year-end 2019 data.

Strong focus on Germany and financial industry due to business model

Allocation of the economic capital for credit risk

84%

5%

2% 2%

1% 3% 2% 1%

Germany

Euro-area countries (excl.

Germany)

EU countries (excl. euro-area

countries and Germany)

Europe outside EU

Africa

Asia (incl. Australia and New

Zealand)

Latin America

North America

By region

84%

6%

2% 2%

1% 1% 1% 3%

Financial sector

Financial

investment/funds

Consumer

Energy/environment

Public Sector

Transport infrastructure

Essential goods

Other

By sector

Exposure to

Germany: 84%

Exposure to

financial sector: 84%

Numbers represent the share of new commitments in 2019

A contribution to all of the United Nationsʼ Sustainable Development Goals

KfWʼs business activities focus on four megatrends


SDG-MAPPING of entire KfW Groupʼs new business 2019

Focal SDGs are: 7, 8, 11, 13

The heart of KfWʼs business activities:

PROMOTION

38% Climate Change

& Environment

3% Digitisation

& Innovation

26% Globalisation

15% Social Change

SDG 13:

Climate

Action

SDG 7: Affordable

and Clean Energy

SDG 8: Decent Work and

Economic Grow th

SDG 11:

Sustainable

Cities and

Communities

Manifold activities to improve sustainabilty and to act as vocal advocate - examples

Sustainability has been and remains one of KfWʼs top priorities

Setting new corporate targets:

KfW shall remain among top-performer in ESG ratings by renowned int’l ESG rating agencies

Improving lending business:

Development of a group-wide KfW Roadmap Sustainable Finance by 2020:

‒ Improvement of impact evaluation of KfW’s business (e.g. SDG mapping)

‒ Assessment of sustainability control elements in bank steering ‒ Consideration of ESG and climate risks

in internal risk management process

Financing landmark projects:

Clean Ocean Initiative (KfW, EIB and AFD; 2018)

– EUR 2bn for sustainable projects to reduce the pollution

in the world’s ocean within the next 5 years

– Focus on river and costal areas of developing countries

in Asia, Africa, and the Middle East

Engaging in global initiatives:

‒ PRI – Principles for Responsible Investments signatory

‒ Green Bond Principles Executive Committee member

– TCFD – Task-Force on Climate-related Financial

Disclosure supporter

"Sustainability has always been an

important part of our DNA. KfW is sustainable in a holistic sense,

i.e. our understanding of sustainability goes far beyond

environment and climate protection. "

Dr. Günther Bräunig, CEO



Business performance

507 472,4 486 506 525

2016 2017 2018 2019 1Q 2020

81.0 76.5 75.5 77.3

19.8

2016 2017 2018 2019 1Q 2020

77.3 bn EUR Total promotional business

volume 2019

• About 55% domestic and 45% international business.

• In 2018/19 shift towards int’l business.

506 bn EUR Total assets at end-2019

• Germany’s 3rd largest credit institution in terms of total assets.

1.4 bn EUR Consolidated profit 2019

Much better than 2019 target, due to a year-on-year increase in the operating result combined with a decline in the valuation result.

2.0

1.4 1.6

1.4

-0.6

2016 2017 2018 2019

Capital Ratio (Tier 1)

0

5

10

15

20

1Q 2020

24.0

2017 2018

16.1

2016 2019

22.3 20.6 20.1

21.3

16.5

preliminary IRBA

CRSA

IRBA approved

BaFin minimum requirement

• BaFin approval as advanced IRBA institution since 6/2017.

The increase of the Tier 1 capital ratio of KfW as of December 31, 2019, is largely attributable to the increase in regulatory capital and to changes in the measurement of counterparty default risk.

in b

n E

UR

in b

n E

UR

in b

n E

UR

IRB

A a

ppro

val

Strategic target (before IFRS effects)

1Q

2020

in EUR million confidence level 99.99% figures as of 31.12.2019 (figures as of 31.12.2018)


Large share of tier 1 capital reflects high quality of KfW’s financial resources. Very sound capital basis.

Economic risk-bearing capacity of KfW

Op-Risk Market price risk

Credit Risk (incl. migration, CVA and settlement risk)

8,539 (10,607)

3,275 (5,403)

844 (1,441)

14,467 (18,369*)

Economic capital requirements

Tier 2 capital

Excess coverage 15,308 (9,928)

1200 (0)

Project risk & hidden burdens

Available financial resources

Tier 1 capital 29,775

(28,297) 29,775

(28,278)

Tier 1 ratio: 21.3% Total capital ratio: 21.3%

0 (19)

* Including hidden burdens of EUR 98 million

518 (739)

Invest- ment risk

Model buffer

91 (81)


Solid business performance

Key financial figures of KfW Group (IFRS)

2018 2019 1Q 2020

Business activities (in EUR bn) – for the period

Promotional business volume 75.5 77.3 19.8

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

Operating result before valuation & promotional activities 1,387 1,677 392

Consolidated profit 1,636 1,367 -592

Consolidated profit before IFRS effects from hedging 1,311 1,447 -517

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

Total assets 485.8 506.0 524.7

Equity 30.3 31.4 31.2

Volume of business 590.7 610.7 632.7

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

Tier 1 capital ratio 20.1% 21.3% 24.0%

Total capital ratio 20.1% 21.3% 24.1%


Highlights in 2019 & 1Q2020

In 2019, KfW achieved EUR 77.3bn in its promotional activities (+2% yoy). While int’l business increased again

quite significantly, this was offset by a slight decrease in domestic business. EUR 19.8bn (+17% yoy) in Q1

marked a successful start in 2020, a year dominated by KfW’s role in delivering COVID-19-related liquidity aid.

KfW Group

In 2019, 5% decrease to EUR 43.4bn due to excellent financing conditions for SMEs; however, increasing

demand for housing (e.g. grant-based government-sponsored Baukindergeld). EUR 13.6bn (+25% yoy) in

1Q2020 due to high demand in energy-efficient construction/refurbishment, housing and venture capital.

Domestic

Business

On behalf of the government and part of a comprehensive package of measures, KfW is responsible for various

loan facilities providing liquidity aid for COVID-19 affected companies in Germany. After one week, EUR 0.5bn

already committed in Q1. As events develop, a significant increase is expected in the KfW Special Programme.

KfW Special

Programme 2020

(COVID-19 aid)

In 2019, 25% increase in export & project finance to record level EUR 22.1bn; further growth in Q1 (+18% yoy),

decrease expected as the year progresses. Promotion of developing countries & emerging economies remained

unchanged in 2019, significant role in implementing government’s Emergency COVID-19 Support Programme.

International

Business

In 2019, KfW invested approx. EUR 1.1bn in securitization transactions to promote SMEs and EUR 0.3bn in

green bonds (2020e: EUR 0.4bn) to support climate change mitigation and environmental protection. While

securitization transactions ended in 1Q2020, green bond investments rose to EUR 77m (+ EUR 53m yoy).

Financial

Markets

Consolidated profit of EUR 1.4bn in 2019 characterised by rise of operating result combined with decline in the

valuation result, exceeded well KfW’s target (EUR 0.8bn). In 1Q2020, result of EUR -0.6bn marked by extreme

burdens of approx. EUR 1bn related to COVID-19 pandemic, operating result before valuation up 10% yoy.

Results


Focus on supporting the German economy on behalf of the German government

Impact of the ongoing COVID-19 pandemic

Refinancing of KfW Special Programme 2020

Loan facilities for liquidity aid for companies of all sizes, self-employed and freelance professionals in Germany affected by COVID-19. Precondition: no financial difficulties at end of 2019.

Promotional terms are significantly modified in order to facilitate the approval and extension by involved on-lending banks, e.g.:

Direct lending to large corps in consortium possible.

Up to 100,000 loans, more than €50bn expected.

Germany, pursuant to a separate guarantee declaration, bears the financial risks KfW incurs.

KfW Special Programme 2020

In 1Q2020, significant crisis-related negative effects of approx. €1bn, primarily from

the valuation of the investment portfolio, primarily in developing countries & emerging economies;

risk provisions for COVID-19 severely affected countries and hard-hit sectors of E&P business.

Consolidated Q1 loss: - €592m

Impact on KfW’s Q1 Results

Federal Ministry of Finance is authorized to refinance KfW Special Programme 2020 up to €100bn through new government-owned Economic Stabilisation Fund (WSF).

Limited to year-end 2021, but no obligation for KfW.

Close coordination with Ministry of Finance, German DMO (Finance Agency) and WSF.

Mid-sized enterprises

100% loan < €0.8m KfW risk no risk

assessment

Large enterprises

80% max €1bn KfW risk loan amount

instant


Funding at KfW

KfW’s funding highlights in 2019

EUR 80.6bn The highest volume KfW

ever funded in the debt

capital markets so far.

EUR Benchmarks

dominate (EUR 28bn) amid

rapidly falling yields.

Ongoing high investor

demand.

Sterling & NOK

Run on our #3 & #4 funding

ccys. Despite Brexit,

£1.25bn 2021 is the largest

SSA issuance at the time.

12 currencies via 158 transactions

underpin KfW’s global

approach in DCM.

USD Global Bonds

KfW’s excellent access to

$-market allows to borrow

$20bn with excellent

investor diversification.

Emerging Markets

Remarkable very fine

tailor-made placements in

CNY and HK$. Awarder for

Greater China Ccy bonds.

57% Via 10 highly liquid bench-

mark transactions (plus 4

taps) in EUR and USD.

Green Bonds

New framework scaled-up

green issuances to

EUR 8.1bn. Landmark

transactions in 7 ccys.

Inaugural €STR FRN

KfW €STR 1bn 2022: Our

important step forward for

establishing the new euro

short-term rate.

52%

26%

13%

JPY, ZAR, PLN

CNY, CAD, HKD

SEK

AUD

NOK

GBP

USD

EUR


Most Impressive Government of

Government Agency Green/SRI Bond

Issuer

Best Agency

€ Deal of the Year Asia-Pcific Award - Greater China Currencies

Uridashi Award - Deal of the Year


Basis of KfW’s funding

Explicit and direct guarantee from the Federal Republic of Germany

Defined by law

Guarantee established in 1998

Direct, explicit and unconditional

§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.

Top notch financial ratings from leading rating agencies Moody's, Scope Ratings and Standard&Poor's have assigned triple-A ratings to KfW

KfW’s strengths

Timely and sufficient extraordinary support from German government.

Integral link with the government.

Explicit guarantee from the Federal Republic & institutional liability.

Low-risk assets, comprising predominately secured loans.

KfW’s strength

Direct and unlimited statutory guarantee and maintenance obligation drives ratings.

Solid asset quality benefits from on-lending.

Strong funding based on ‘safe-haven‘-status.

KfW’s strength

Maintenance obligation of the German government.

High asset quality & low default rates.

Stable annual net income.

Diversified, low-interest funding.

KfW’s strengths

Strong ownership support in the form of a direct guarantee from the German goverment.

Low liquidity risk, given the good market access & fallback options.

Conservative risk postion, which benefits from on-lending.

Mandatory profit retention safeguards strong capitalization.

Largest public

development bank with

stable core operating

performance and solid

risk profile

Top credit standing is recognized by the three mandated rating agencies and by further unsolicited agencies

KfW’s strengths

Explicit and direct statutory guarantee and institutional liability from the Federal Republic of Germany.

KfW operates in a prudent manner & complies with capital and risk management requirements.

Access to capital markets is very good and sustainable.

Germany’s Flagship

Development Bank

Last update: Aug 2019 Last update: Dec 2019 Last update: Feb 2020

Aaa Outlook stable

Short-term: P-1 AAA Outlook stable Last update:

Jul 2019

AAA Outlook stable

AAA Outlook stable

Short-term: A-1+

Strong and explicit

linkages between KfW and

the Federal Republic of

Germany

AAA Outlook stable

Short-term: S-1+

Last update:

Dec 2019

Solicited Ratings Unsolicited Ratings


A rating is not a recommendation to buy, sell or hold securities. Ratings are subject to revision or withdrawal at any time by the assigning rating organization. Each rating should be evaluated

independently of any other rating.

Top ESG ratings confirm KfW’s holistic sustainability approach Renown international rating agencies assign KfW to be among top-performers in ESG


KfW’s strengths

Comprehensive policy regarding the respect for human rights.

Development and implementation of an approach to calculate GHG emissions in the corp. value chain.

Code of conduct covering impor-tant aspects of business ethics.

Reasonable integration of environ-mental and social aspects into the own investment portfolio.

KfW’s strengths

KfW is rated in the lowest ESG Risk Rating category (="negligible risk") within its peer group and rated banks globally.

KfW continues to demonstrate strong sustainability performance.

KfW’s strengths

Profound measures regarding the management of ESG issues.

Performance regarding environmental and governance criteria is above average and on average regarding social criteria.

Specifically striking is the positive performance in the area of environmental business operations.

KfW is among the 2 best out of 19 develop-ment banks

KfW is #3 out of 77 develop-ment banks

KfW is among the best-rated institutions in its peer group

Prime

KfW has set a new strategic objective of achieving top sustainability rankings among its peers.

A+

D-

C+

Leader

Industry

KfW’s strengths

In 2018, KfW received a rating of AAA (on a scale of AAA-CCC) in the MSCI ESG Ratings assessment.

KfW’s rating is at the highest level possible

AAA

10

Last update: Sep 4, 2018 Last update: Oct 16, 2018 Last update: March 1, 2020 Last update: June 2, 2020

0

7.9

AAA

D

BB

Leader

0

100

5.2 Leader

BB Top 3

A rating is not a recommendation to buy, sell or hold securities. Ratings are subject to revision or withdrawal at any time by the assigning rating organization. Each rating should be evaluated


Increasing importance of debt capital markets for KfW

50%

78% 88%

99% Share of funds from debt capital markets In % of total sources of funds

KfW’s funding volumes

at debt capital markets In euros in billions



How do we issue a benchmark bond in a responsible manner?

Timing Basic terms Syndicate Price

determination

Issuance Preparation

Allocation

KfW

Issu

an

ce

Currency: EUR or

USD

Maturity:

2 to 10 years

Approx. once per

month

Short issuance

windows

Choose 3 banks /

lead arrangers criteria:

Expert knowledge in issuance

activities

Diversification with regard to investor

access / relationship

EUR:

announcement and pricing in general

within a day

USD:

announcement and pricing in general

over two days first indicative

orderbook

Equal treatment

within each investor type

Central banks

Banks

Asset manager

Insurance

companies

Infl

ue

ncin

g F

acto

rs Internal:

duration on credit/asset side

External: investor demand

Internal: liquidity

needs, Black-out periods

External: event risks

regular: e.g. interest rate

decisions ECB

singular:

Brexit

Business

relationship

Secondary trading

of KfW bonds

Quality of consulting

Other business relationship

Pricing depends on

final issuance volume

Safeguarding performance on

secondary market

Buy-and-hold

investors preferred

Early orders

preferred

Tailor-made Placements

Customized products for investor needs

Flexible in currency, structure and maturity

Uridashi transactions

Format: EMTN, US-MTN, NSV, SSD

Green Bonds – Made by KfW

Liquid green bonds, diversified SRI investor base

Focus: € and $ Regular offerings and taps Private placements possible

Format: EMTN, Global, Kangaroo, US-MTN

KfW Benchmark Programmes

Large and highly liquid bonds, highly diversified investor base

Regular offerings and taps Size: 3–5bn (6bn incl. taps, euro only)

3, 5, 7 and 10y

Format: EMTN, Global

Additional Public Bonds

Large and liquid bonds, diversified investor base

Tenors from 1 to 30y Liquid curves and strategic

approach in ₤ and A$ Regular offerings and taps

Format: EMTN, Global, Kangaroo, Kauri

Wide selection of products addressing investor needs

€ $

€ $ ₤ A$ NZ$ C$ SEK NOK

€ $ ₤ A$ NOK SEK HK$...

€ $ ¥ HK$ Mex$ CN¥ ZAR …

€35.3 bn May 31’20


49.8 55.4 55.4

45.9

26.7

2.8

3.7 1.6

8.1

16,0

15,8 17,0 22,4

6.6

4.3

3.3 2.1 4.2

0,00

10,00

20,00

30,00

40,00

50,00

60,00

70,00

80,00

90,00

2016 2017 2018 2019 2020

Strong presence in debt capital markets

Funding volume (EUR in billions)

KfW Benchmark Programmes Green Bonds – Made by KfW

Additional Public Bonds Tailor-made Placements

72.8

78.2 76.1


Capitalization (as of December 31, 2019)

80%

9%

5%

6%

Total

€493bn

Capital Markets Money Markets

Other Liabilities (primarily collateral from derivative transactions)

Equity

80.6

EUR 35.3bn

issued as per

May 31, 2020

Benchmark bonds are key – core currencies euro and US dollar

KfW’s funding by currencies and instruments

0

10

20

30

40

50

60

70

EUR USD0

10

20

30

40

50

60

70

80

Benchmark Programmes

Instruments (in %)

Currencies (in %)

Additional Public Bonds

Tailor-made Placements

2017 (EUR 78.2bn) 2019 (EUR 80.6bn) 2016 (EUR 72.8bn) 2018 (EUR 76.1bn)

10 benchmark bonds (plus 4 taps) issued in EUR (2x 5y, 3y, 10y, 7y) and USD (2y, 2x 3y, 2x 5y) accounting for EUR 45.9bn raised.

10 “Green Bonds – Made by KfW” issuances in EUR, SEK, AUD, GBP, HKD, NOK, and USD with an equivalent of EUR 8.1bn. The SEK

7bn issuance in 3s and USD 2bn in 10s mark the largest green bonds of their kind at the time.

Ongoing strong demand for large and liquid benchmark bonds: 57% of total funding volume in 2019.

The challenging market environment led to yield all-time lows and a particularly flexible funding strategy.

EUR remains by far #1 funding currency (approx. EUR 42bn, 52% of total funding). Lower (~21bn in EUR equivalent) but stable (vs. 2018) share of USD funding as EUR funding levels are very competitive vs USD (after hedging into EUR). Strong investor demand for Sterling

pushes the share of GBP as funding currency #3.

Highlights in 2019

Green Bonds


0

2

4

6

8

10

12

14

GBP AUD JPY Others


Based on allocations

Distribution of KfW’s EUR-Benchmark investor base

KfW’s global investor base

€

0

10

20

30

40

50

60

70

2014 2015 2016 2017 2018 2019

in % Geographic Distribution

Europe ex Germany Germany

Asia Americas

Other

0

10

20

30

40

50

60

70

2014 2015 2016 2017 2018 2019

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


Based on allocations

Distribution of KfW’s USD-Benchmark investor base

KfW’s global investor base

$

0

10

20

30

40

50

60

2014 2015 2016 2017 2018 2019

in % Geographic Distribution

Asia MEA Europe Americas Other

0

10

20

30

40

50

60

2014 2015 2016 2017 2018 2019

in % Investor Distribution

Central Banks Banks Asset Mgt.

Ins. & Pension Other

Americas

Europe

MEA Other

Asia

Other

Central Banks*

Banks

Asset Mgt.

Ins. & Pension

* The category „Central Banks“ includes also Official Institutions since April 2019


Outstanding bonds and notes

KfW’s Benchmark-Programmes in EUR and USD

0

1000

2000

3000

4000

5000

6000

7000Amount Outstanding

0

1000

2000

3000

4000

5000

6000

€

$

Amount

Outstanding

in EUR mn

Amount

outstanding

in USD mn

Issued in 2020

Established in 2001, KfW’s EUR benchmark programme is the backbone of KfW’s funding strategy. Including 2019, KfW issued

a total of 80 EUR benchmark bonds with an issuance volume of more than EUR 380bn. Current outstanding volume: EUR

164bn.

KfW is strongly committed to liquidity and regular issuance across all benchmark maturities each year. In 2019, KfW was able to

issue two benchmark bonds in 5y and one each in 3y, 7y and 10y respectively. KfW closely monitors secondary market liquidity.

The 3y benchmark marks KfW’s first EUR 3-year benchmark since 2015.

KfW’s EUR benchmark programme has become a true “benchmark” in the market for many other issuers as well.

In 2019, all new lines were oversubscribed with excellent investor diversification, priced at the tighter end of guidance and

showed good performance in secondary markets.

In 2019, EUR currency dominated amounting to EUR 42bn making up 52% of KfW’s total funding volume 2019. This is

remarkable especially in an environment of less PSPP support and ultra low interest rates.

KfW EUR-Benchmark-Programme

€


Highlights 2019

bn EUR Settlement Tenor in yrs Coupon in % Lead Managers

KfW-EUR-Benchmark I/2019 5.0 Jan 15, 2019 10 0.750 BoA Merrill Lynch, Commerzbank, Société Général

KfW-EUR-Benchmark II/2019 5.0 Feb 5, 2019 5 0.00 Credit Agricole, Deutsche Bank, Goldman Sachs

KfW-EUR-Benchmark III/2019 5.0 Mar 19, 2019 3 0.00 BNP Paribas, JP Morgan, Toronto Dominion

KfW-EUR-Benchmark IV/2019 5.0 Jun 13, 2019 5 0.00 JP Morgan, LBBW, NatWest Markets

KfW-EUR-Benchmark V/2019 4.0 Sep 24, 2019 7 0.00 Barclays, Deutsche Bank, Merrill Lynch

4 Re-openings of 2016&2018 lines 4.0 various various various DZ, Goldman Sachs, JPM, BoA ML, Citi, SocGen, Barclays, Coba

28.0 0,000 0,000 0,000

bn USD Settlement Tenor in yrs Coupon in % Lead Managers

KfW-USD-Benchmark I/2019 5.0 Jan 23, 2019 5 2.625 Barclays, Bank of Montreal, Citigroup

KfW-USD-Benchmark II/2019 3.0 Feb 27, 2019 3 2.500 Citigroup, Toronto Dominion, RBC CM

KfW-USD-Benchmark III/2019 3.0 Apr 24, 2019 2 0.075 HSBC, Morgan Stanley, Nomura

KfW-USD-Benchmark IV/2019 4.0 Jul 11, 2019 3 1.75 Barclays, Morgan Stanley, RBC

KfW-USD-Benchmark V/2019 3.0 Sep 5, 2019 5 1.375 Goldman Sachs, Nomura, HSBC

18.0 0,000 0,000 0,000

Established in 2002, KfW’s USD-Global-Programme strategically complements KfW benchmark programmes. Up to the middle

of 2019, KfW issued a total of 90 USD global bonds with an issuance volume of more than USD 340bn. Current outstanding:

USD 117bn.

KfW is strongly committed to liquidity and regular issuance across all benchmark maturities each year. KfW closely monitors

secondary market liquidity.

KfW’s USD global programme has become a true “benchmark” in the market for many other issuers as well.

In 2019, KfW has been issuing five bonds amounting to USD 18.0bn. This is especially remarkable in an environment with very

competitive funding levels in the EUR-market.

In 2019, all new lines were oversubscribed with excellent investor diversification, priced at the tighter end of guidance and

showed good performance in secondary markets.

KfW USD-Global-Programme


Highlights 2019 $

Public sector entity in the EU

Risk weight: 0% according to CRR/Basel III

PSPP and PEPP eligibility: 33% limit PSPP only

Frequent issuer of benchmark bonds in core currencies EUR and

USD

Three lead managers for 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

Broad order book diversification (Ø more than 100 investors)


*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.

The liquidity of KfW’s benchmark bonds Characteristics, HQLA assessment & turnover statistics

Characteristics that support the liquidity in KfW benchmark bonds:

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>

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.

Turnover in KfW benchmark bonds in secondary markets:

106 96 92 84 34 25 21,5 23,4

138 146

194

165

0

40

80

120

160

200

2016 2017 2018 2019

in bil l ion USD

€

$

96 98

124 139

19 32,5 37,5 41,5

97

144 147 158

0

20

40

60

80

100

120

140

160

2016 2017 2018 2019

in bil l ion EUR

TotalOutstandings

(aggregateprincipal)

New Issuance(aggregate

principal)

Total Turnover*


Highlights of KfW’s footprint in the green bond market


High Quality Aligned with GBP & Harmoni-

zed Framework for Reporting,

SPO from CICERO, external

impact evaluation.

#1 in Germany

€22.9bn of „Green Bonds –

Made by KfW“ since 2014

make KfW one of the largest

issuers globally and by far the

largest issuer in Germany.

Liquidity Large sizes in benchmark

maturities make KfW green

bonds among the most liquid

green bonds in the market.

Contribution to SDGs

7: Affordable & Clean Energy,

11: Sustainable Cities & Com-

munities, 13: Climate Action.

Vocal Advocate

As member (since 2015) of

the Exec. Committee of the

Grren Bond Principles, KfW is

highly committed to foster

green bond market standards.

Credibility Top ESG ratings and a strong

focus on green finance make

KfW one of the most credible

issuers of green bonds.

Green Indices

Eligible for many green

indices like “The BofA Merrill

Lynch GB Index”, “Barclays

MSCI GB Index”, “S&P GB

Index”, “Solactive GB Index”.

Global Engagement

Engaging in and suppoting of

int‘l and national initiatives to

promote sustainability in

capital markets (e.g. PRI,

TCFD, EU TechExpert-Group).

49%

29%

9%

7%

4%

HKD

NOK

AUD SEK

GBP

USD

EUR Green Bond Investor

Since 2015 runs a dedicated

green bond investment

portfolio of €2bn (target)

mandated by the Federal

Ministry of Environment.

Currency Split of all

KfW Green Bonds issued by December 31, 2019


Overview on issuances and reporting


0

1

2

3

4

5

6

7

8

9

2014 2015 2016 2017 2018 2019 2020ytd

EUR in

billions

Volume of KfW Green Bonds

issued by May 31, 2020:

EUR 23bn

EUR

USD

AUD

GBP

SEK

HKD

2.7

3.7

2.8

3.7

1.6

8.1

EUR equivalent; based on ECB reference rate on the pricing date;

Reports available under: https://www.kfw.de/KfW-Konzern/Investor-Relations/KfW-Green-Bonds/KfW-Green-Bonds-Reporting/index-2.html

NOK

PLN

0.4

HUF

Details

2 Green Bonds

issued

5 Green Bonds

issued

4 Green Bonds

issued

7 Green Bonds

issued

3 Green Bonds &

1 promissory note

loan issued

9 Green Bonds &

1 promissory

note loan issued

6 Green Bonds

ytd

Allocation

Reporting

Available in

Q1 2021

Impact

Reporting

Available in Q2 2020

Available in 2022 once impact is

externally evaluated

https://www.kfw.de/KfW-Konzern/Investor-Relations/KfW-Green-Bonds/KfW-Green-Bonds-Reporting/index-2.html


















Funding

How do “Green Bonds – Made by KfW“ work?

Liquidity management

Lender On-lending bank Final borrower


Socially

responsible investors

Renewable Energy & Energy Efficiency

2 Loan Programmes

~ 43,000 loans 2019


49.4%

8.1% 3.5%

8.9%

0.4%

7.3%

22.3%

0.0%

4.5% 1.9%

3.4%

90.2%

79.1%

0.2%

14.9%

5.6% 0.2%

Residential

buildings

Wind

energy

Solar

Other renewables

Germany

France

Other OECD

countries

Underlying assets

€10.9bn 2019

€8.1bn 2019

Other

buildings

Sweden USD2bn 10y

SSD EUR2m 10y

EUR4bn 8y

NOK6bn 4y

HKD300m 2y

GBP650m 7y

AUD450m 5y

SEK7bn 3y

(1) A rating is not a recommendation to buy, sell or hold securities. Ratings are subject to revision or withdrawal at any ti me by the assigning rating organization. Each rating should be evaluated


A comparison of green and conventional KfW Bonds

Issuer

Guarantor The Federal Republic of Germany

Rating (1) Moody‘s: Aaa Scope Ratings: AAA Standard & Poor‘s: AAA

Risk weight 0% according to CRR/Basel III

Use of Proceeds

General business, however, amount equal to net proceeds for climate friend-ly projects accord. to KfW Framework

General business

Reporting Allocation report & Impact report None

Target investors

Institutional investors, especially green or socially responsible investors (SRI)

Institutional investors

Currency Flexible, primarily EUR, USD, GBP, AUD, SEK, JPY. Up to 20 currencies possible.

Term Determined by underlying green assets, primarily 5 to 10 years

Flexible, primarily 2 to 15 year

Repayment Bullet

Green Bonds – Made by KfW Conventional KfW Bonds



Additional public transactions Diversification of investor base

EUR

USD

AUD

CHF

CNY

DKK

GBP

HUF

JPY

MXN

NOK

NZD

PLN

SEK

SGD

ZAR

…

Issues outside Benchmark-Programmes

Non-benchmark maturities

Bullet, Callables, FRN (€-STR, Euribor)

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


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

18 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

A run on our Sterling bonds 2019 (£9bn ytd; +180% yoy) made us #1 SSA issuer in GBP despite Brexit discussions.

GBP remains the 3rd most important currency after EUR and USD in KfW currency mix in 2019 with a current share of around 13%.

3 new bond lines (with maturities in 2021, 2024 and 2025) as well as fulminant return to the GBP green bond market after the KfW debut in 2015.

KfW GBP 650mn 7-year Green Bond due 2026 was the largest and longest SSA Green Bond transaction at that time.

Our £1.50bn 2024 bond issued in January 2020 was the largest ever SSA £ issuance at that time.

Highlights

Green Bond 1000

2650 3300

2537

1550

2500 2250

1800 1850

200

1750

750

Green Bond 800 650

3035

1500

700 300

0500

100015002000250030003500

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

New lines issued in

2020

Amount

outstanding in

GBP million

Green

Bond

1000

3000

1700

2100

2650

1500

650

2150

Green

Bond

450

2050

1350

600

0

1000

2000

3000

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 1 1/207/24/24

KFW 402/27/25

KFW 3.209/11/26

KFW 3.203/15/28


KfW in AUD KfW is the largest SSA Kangaroo issuer A$

Taps issued

in 2020

KfW maintains strategic approach to the Kangaroo market and is

a regular issuer.

With 13 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 23.1bn).

KfW Kangaroo bonds are RBA repo eligible.

Characteristics

In 2019, AUD 2.6bn issued vs. AUD 1bn in 2018

5th most important funding currency in 2019 (2.1%).

Remarkable return to AUD green bond market with new KfW AUD

450mn Green Kangaroo after KfW debut in 2015.

KfW is a constant provider of liquidity via taps across the curve.

Highlights

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

Amount Outstanding

Amount

outstanding in

AUD million


KfW in NOK A strong addition to KfW’s funding programme NOK

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 totals NOK 25.5bn in 2019 (total in 2018:

NOK 4.75bn).

In 2019 five new lines have been added including the inaugural KfW NOK4bn Green Bond due in August 2023.

In total 19 fixed and FRN lines.

Highlights

1000

2500

1000 1000 1000

14500

4000 4250

1500 1000

Green

Bond 8000

4500

200 900 750 500 250

1100 400

0

2000

4000

6000

8000

10000

12000

14000

16000

VPS VPS VPS

VPS

VPS

Amount

outstanding in

NOK million

KfW’s NOK curve across the maturity spectrum FRN

VPS

Issued in 2020


KfW in SEK Expanding green activities into Nordic region

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 2019, KfW evolved its SEK funding activities further into Green

Bonds – Made by KfW in public format and issued further private placements.

The SEK 7bn green bond with a maturity of 3 years was the fifth

"Green Bond - Made by KfW" denominated in SEK since 2015. With its SEK 7bn green bond with a maturity of 3 years KfW

expanded its SEK Green Bond curve, it is the largest ever issued SEK green bond.

Highlights

1000 1600

1000 1000

6600

10000

2350

7000

1000 1000

5000

2000

0

2000

4000

6000

8000

10000

12000

SGB SGB

Amount

outstanding in

SEK million

KfW’s SEK curve across the maturity spectrum

SEK

Issued in 2020


KfW in JPY

¥ Public Issues

Outstanding:

Global JPY 125bn 2.05%, due February 2026

Global JPY 50bn 2.60%, due June 2037

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, Nikkei-linked and PRDCs

are predominant; Minimum issue size JPY 100m

2019 › EUR 350m equivalent raised

via 9 transactions › JPY 800mn raised via 4 trades

2018 › EUR 1.471bn equivalent raised

via 28 transactions › JPY 1.00bn raised via 4 trades


via 24 transactions › No issuance





Uridashi Award - Deal of the Year

1.500

620 1.000

2.850

1.830

1.068

200

6.404

2.500

2 2 2 2

6

4

1

18

3

-

2

4

6

8

10

12

14

16

18

20

0

1.000

2.000

3.000

4.000

5.000

6.000

7.000

2012 2013 2014 2015 2016 2017 2018 2019 2020

KfW’s new issues in CNY since 2012


KfW in CNH (Offshore CNY) KfW’s long-term goal is to enter the Panda bond market CN¥

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.

KfW's strategic 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.

Issuance volume in CNY million

2012:

KfW’s inaugural Offshore CNY bond

Total trades

2014:

First KfW CNY bond ever listed in

Frankfurt

2019:

KfW launches 18 CNY trades (incl. one

tap) with maturity of

1-4 years with a size

between 200 to 700m CNY each


Tailor-made placements (1)

40%

23%

11%

10%

10%

3% 3%

EUR CNY HKD

USD JPY GBP

Other

EUR 3.3bn

Currencies 2019

Customized products for investor needs

Flexible approach

Broad investor diversification in various currencies

and structures

Targets

Key figures 2019

Current product

developement

EUR 3.6bn

70 transactions

8 currencies (CNY, EUR, GBP, HKD, JPY, PLN, USD, ZAR)

Demand for CNY and HKD bonds has increased

significantly

Greater number of transactions in total

KfW satisfies investor’s preferences for yield

enhancing products in combination with an AAA

credit quality

KfW satisfies current investor’s requirements:

Current product development


Tailor-made placements (2)

Highly diversified:

Step-up callables

Range accruals

Zeros

CMS-linked structures

FX-linked structures

etc.

Redemption profile:

Bullet

Callable

TARN

Trigger

Characteristics

Minimum size:

EUR, USD 10m

USMTN 5m

JPY 100m (MTN)

JPY 1bn (Uridashi)

Minimum non call 6 months, multi-callable

structures can be quarterly callable for

50m (EMTN)

10m (US-MTN)

Minimum non call 3 months and quarterly callable for

JPY-MTN and Uridashi

Method of distribution:

Underwriting

Highlights

KfW offers

tailor-made

structures to

investors


“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 1m

Minimum issuance volume of EUR 10m

Characteristics

Due to increased investor demand, KfW offers

"Namensschuldverschreibungen" since August

2009

Solid investor demand and constant broadening

of investor base

"Schuldscheindarlehen" remain available

900

1900

190

800

335

183

755

414

276

82

0 500 1000 1500 2000

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

Issuance volume1 (in EUR million)

1 Issuance volume comprises “Namensschuldverschreibungen“ and “Schuldscheindarlehen“


Money market

As of 31 December 2019 EUR-CP (in million) USD-CP (in million)

Programme volume EUR 70,000 USD 10,000

(increased to USD 20,000 as of April 2020)

Issue volume EUR 87,392 USD 42,993

Number of transactions 691 419

Average ticket volume EUR 126 USD 103

Average maturity 124 days 59 days

Outstanding volume

(at the end of period) EUR 33,844 USD 6,721

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

Its CP programmes make KfW an important issuer in the money market as well

KfW in the capital markets in 2020

Strong presence in the capital markets with funding target of

EUR 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 strategy of diversification and therefore continues to offer a wide selection of products addressing investors’ needs.

The KfW Benchmark Programs remain the most important

funding source.

GBP, AUD and Scandinavian currencies are important for

KfW’s funding mix.

Strong commitment to green bonds, target: ~ EUR 8 billion.

EUR & USD remain key currencies in 2020 (2019: 78%).



Photo credits / references

Cover page/page 20:

Full-page image: Freunde des Hauses / Getty Images

Page 4

Picture 1: KfW-Photo Archive / Rüdiger Nehmzow Picture 2: KfW-Photo Archive / Angelika Kohlmeier Picture 3: KfW-Photo Archive / - Picture 4: DEG / Andreas Huppertz

Page 6

Picture 1: KfW-Photo Archive / photothek.net Picture 2: KfW-Photo Archive / Jürgen Lösel Picture 3: KfW-Photo Archive / Frank Blümler Picture 4: KfW Photo Archive / photothek.net Picture 5: KfW Bankengruppe / Jens Steingässer Picture 6: KfW-Photo Archive / Charlie Fawell

Page 9

Picture 1: thinkstock / Top Photo Corporation Picture 2: Fótolia / Olivier Le Moal Picture 3: KfW-Photo Archive / Thomas Klewar Picture 4: KfW-Bildarchiv / photothek.net

Page 10 Picture 1: KfW Photo Archive / Jens Steingässer

Page 18

Picture 1: Deutscher Bundestag / Lichtblick / Achim Melde

Page 23

Picture 1: Freunde des Hauses / gettyImages

Page 47

Picture 1: gettyImages, plainpicture / Piotr Krzeslak, Cultura

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.

Page 20: The use by KfW of any MSCI ESG Research LLC Data, and the

use of MSCI logos, trademarks, service marks or index names herin, do not constitute a sponsorship, endorsement or promotion

of KfW by MSCI or any of its affiliates. MSCI services and data are the property of MSCI or its information providers. MSCI and MSCI

research names and logos are trademarks or service marks of MSCI or its affiliates.


Contacts

Treasurer of KfW: Ext.

Tim Armbruster - 5599

Treasury:

Markus Schmidtchen - 4783

Capital Markets:

Petra Wehlert - 4650

Otto Weyhausen-Brinkmann - 4652

Alexander Liebethal - 4656

Investor Relations:

Jürgen Köstner - 3536

Dorota Reiter - 8537

Serviceline - 2222

KfW Bankengruppe

Palmengartenstrasse 5–9

60325 Frankfurt am Main

Phone +49 69 7431 - Ext.

Fax +49 69 7431 - 3986

[email protected]

Bloomberg: KfW <GO>

www.kfw.de/investor-relations

Sign up here for our newsletter service


Notes


Back-up Folien www.kfw.de/investor-relations

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.

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