Landwirtschaftliche Rentenbank plans to raise approximately EUR 10bn of medium- and long-term funding in 2012, slightly less than in 2011. This figure includes all transactions in the capital markets with maturities of more than two years. The development agency will raise up to 50% of this volume via benchmark transactions in medium-term maturities with a minimum volume of EUR/USD 1bn each. New issues and taps of AUD Kangaroo bonds will continue to be an important part of the long-term funding strategy, but on a smaller scale than in 2011. Tailor-made syndicated issues and private placements in various currencies will complement the strategic transactions. According to Horst Reinhardt, the board member at Rentenbank responsible for capital markets, Rentenbank expects stable funding costs despite the persistent crisis in financial markets. "The phase of high volatility is likely to extend into 2012. However, our strong global investor base combined with relatively limited funding needs will allow us to approach markets successfully with carefully timed transactions even in a challenging environment", he explains.
In the year to date, Rentenbank has raised roughly EUR 12bn with maturities of more than two years from the capital markets. Average cost of funding for 2011 are slightly higher than in the previous year, mainly due to a longer duration. "As a development agency of the Federal Republic of Germany we have a sustainable business model, and hence we also have a stable access to maturities above five years. This is where a lot of banks struggle to raise funding. Therefore, our loan programmes essentially ensure that investment projects in the German agriculture and rural areas get funded", stated Reinhardt. The share of US dollar issuance in the medium- and long-term funding markedly dropped to around 36% (42%) while the share of euro-denominated issues marginally increased to 38% (35%). With 17% (16%) the share of Australian dollar issuance reached another record level. Other currencies accounted for 9% (7%) in total.
Via its ECP (Euro Commercial Paper) Programme, Rentenbank issues bearer notes with maturities up to 364 days. The average outstanding volume reached EUR 6.2bn (10.3bn) in 2011.
Service: Landwirtschaftliche Rentenbank is Germany's development agency for agribusiness. Within the framework of its legal promotional mandate, Rentenbank provides low-interest loans for agriculture-related investments via other banks in line with its competitive neutrality. The appropriation of profits is subject to the promotional mandate as well. The bank is a public law institution whose capital stock was formed by contributions paid by Germany's agricultural and forestry sector. The bank mainly raises funds in international capital markets and is Triple A rated by the three major rating agencies.
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