More transparent and efficient: first KfW benchmark bond via Deutsche Börse’s digital D7 platform
First published by Deutsche Börse
- Optimised platform technology results in even more efficient and faster processes
- KfW plans further digital bond issuances on D7 in the future
KfW issues its first high-volume benchmark bond as a central register security according to the German electronic securities act (eWpG) with a value date of 2 July 2024. The issuance was facilitated by Clearstream via Deutsche Börse’s digital securities platform D7. Clearstream is the post-trade business of Deutsche Börse Group. The KfW bond has a volume of €4 billion with a maturity of 3 years and a coupon of 2.75%.
Tim Armbruster, Treasurer at KfW, commented: “We are delighted to have successfully completed a second digital transaction, with a focus on further automating data generation and speeding up the issuance process, thus improving scalability. We thank Deutsche Börse for the constructive cooperation over the past months. It is important to us to provide key insights from the issuer’s perspective to contribute to the further digitisation of capital markets.”
Jens Hachmeister, Head of Issuer Services & New Digital Markets at Deutsche Börse, said: “We are thrilled to welcome KfW’s benchmark bond on our digital D7 platform. This is a striking milestone for the digitisation of German capital markets overall, and we are proud be pioneers in this field. To date, D7 has processed more than 35,000 digital issuances across all financial instruments, totalling around €3.5bn, more than any other platform worldwide. With successful benchmark issuances like this one, D7 proves that it is the platform of choice for high-volume and high-scale digital issuances.”
Thanks to its partnership with Google Cloud, Deutsche Börse further significantly optimised D7’s technology stack as part of the latest system upgrade. This enabled, for instance, a further decrease in time-to-market for digital securities from minutes to seconds. Traditionally, issuances can take several days due to cumbersome reconciliation processes and lack of system interoperability. Digital issuances increase speed, transparency, thus efficiency, while decreasing error-proneness and costs throughout the entire securities lifecycle.
This benchmark bond marks the second time KfW issues a central register security on D7 under the German electronic securities act (eWpG). KfW already completed a first pilot transaction (€20 million, maturity: 2 years) in December 2022. Going forward, KfW plans to use D7 for further euro transactions.
[Editorial note: Please find here a high resolution photo of Jens Hachmeister.]
About KfW
KfW is one of the world’s leading promotional banks. With its decades of experience, KfW is committed to improving economic, social and environmental living conditions across the globe on behalf of the Federal Republic of Germany and the federal states. To do this, it provided funds totalling €111,3 billion in 2023 alone. Its financing and promotional activities are aligned with the 2030 Agenda of the United Nations and contribute to achieving the 17 Sustainable Development Goals (SDGs) around the world.
KfW does not have any branches and does not hold customer deposits. It refinances its promotional business almost entirely through the international capital markets. In 2023, KfW raised €90,2 billion in the capital markets to fund its business activities. In Germany, KfW Group is represented in Frankfurt, Berlin, Bonn and Cologne. Its network includes 80 offices and representations around the world.
About Deutsche Börse
As an international exchange organisation and innovative market infrastructure provider, Deutsche Börse Group ensures capital markets that are transparent, reliable and stable. With its wide range of products, services and technologies, the Group organises safe and efficient markets for sustainable economies.
Its business areas cover the entire financial market transaction process chain. This includes the provision of indices, data, software, SaaS and analytical solutions as well as admission, trading and clearing. Additionally, it comprises services for funds, the settlement and custody of financial instruments as well as the management of collateral and liquidity. As a technology company, the Group develops state-of-the-art IT solutions and offers IT systems all over the world.
With more than 14,000 employees, the Group has its headquarters in the financial centre of Frankfurt/Rhine-Main, as well as a strong global presence in locations such as Luxembourg, Prague, Cork, London, Copenhagen, New York, Chicago, Hong Kong, Singapore, Beijing, Tokyo and Sydney.