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that the level of liquidity can cover its projected net cashflowneeds for a one-year rolling period.

Funding programme

AfDB has a borrowing programme target for 2009 of up to 6.4billion UA in the capital markets, equivalent to about US$9.8billion. The increase in the funding programme is in line withincreased operations in Africa under the bank’s medium-termstrategy and the countercyclical role being played by the bankin combating the impact of the financial crisis on Africa.

The funding strategy aims at providing cost-effectivefunding to African countries and nurturing a diversifiedinvestor base while bringing visibility to the continent and itssuccess stories. By mid-August 2009 AfDB had raised over 50per cent of the maximum amount in seven currencies throughtransactions in all the major segments of the market, includingglobal and domestic bond markets, Uridashis, privateplacements and African currencies. The final level of executionof the programme will be guided by the pace of disbursementson lending operations.

Since 2002 AfDB has annually executed a global bondissue/domestic market issue as part of a conscious strategy toincrease investor understanding of its credit story. Thedomestic bond markets are a strategic priority for the bank.Since 2006 AfDB has issued in Australia, New Zealand,Canada, South Africa and Switzerland.

AUD and NZD activity

In February 2006 AfDB executed its inaugural A$300 millionKangaroo bond issue which matures in February 2011. Sincethen, the bank has organised investor meetings in 2007 and2008. AfDB’s Kangaroo bonds are repo-eligible with theReserve Bank of Australia. The bank has also issued Uridashisin AUD.

AfDB debuted in the Kauri bond market in February2008 with a NZ$200 million February 2013 bond andcontinues to monitor possibilities for future issuance. Thebank’s Kauri bonds are repo-eligible with the Reserve Bankof New Zealand.

About AfDB

African Development Bank (AfDB) is the premierdevelopment finance institution in Africa, with amandate to combat poverty. AfDB enjoys triple-Aratings which reflect the bank’s strong membershipsupport, prudent policies, healthy capital adequacy,

franchise value and strong financial condition.

Ownership

AfDB’s shareholders are all the 53 countries in Africa (with a60% shareholding) and 24 other countries – including the G7countries (with a 28% shareholding) – in the Americas, Europeand Asia. Turkey and Luxembourg are in the process ofbecoming shareholders.

Capital quality/support

AfDB’s capital structure has two components: paid-in andcallable. Callable capital is that portion of the subscribed capitalstock subject to call only as and when required by the bank tomeet its obligations on borrowing of funds for inclusion in itsordinary capital resources or guarantees chargeable to suchresources. No call has ever been made on the callable capital ofthe bank.

A total of 7.6 billion Units of Account (UA) (US$11.7billion) of callable capital is from countries rated A- or better,of which UA5.3 billion (US$8.2 billion) is from AAA-ratedcountries. (1UA = 1SDR and was equal to 1.54027 USD atDecember 31 2008.)

Risk policy

The bank’s risk management policies, guidelines and practicesare designed to reduce exposure to interest rate, currency,liquidity, counterparty, legal and other operational risks whilemaximising AfDB’s capacity to assume credit risks to publicand private sector clients, within its approved risk limits. Forexample, the debt ratio caps the bank’s total outstanding debtto 100 per cent of the usable capital (defined as the sum ofpaid-in capital, reserves, and callable capital of countries ratedA- and above). Furthermore, AfDB’s liquidity policy ensures

AFRICAN DEVELOPMENT BANK

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FOR FURTHER INFORMATION PLEASE CONTACT:

Hassatou N’Sele, Head of Funding+216 7110 [email protected]/en/about-us/financial-information/investors-resources/

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About ADB

A s

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[email protected]/bond-investors

ultimate backing for ADB’s borrowings and guarantees. Itcannot be called to make loans. ADB has never made a call onits callable capital.

Since 1966 ADB has raised its capital base five times. InApril 2009 ADB’s Board of Governors agreed to triple thebank’s capital base to US$165 billion from about US$55 billion,giving it much-needed resources to respond to the globaleconomic crisis and to the longer-term development needs ofAsia and the Pacific region.

Risk policy (borrowing and lending limitation)

ADB’s borrowing policy limits the bank’s gross outstandingborrowings to no more than the sum of callable capital ofnon-borrowing members, paid-in capital and reserves(including surplus). ADB’s lending policy limits the totalamount of disbursed loans, approved equity investments, andthe maximum amount that could be demanded from the bankunder its guarantee portfolio to the total amount of ADB’sunimpaired subscribed capital, reserves and surplus.

Funding strategy

ADB is a leading triple-A borrower in international anddomestic capital markets. The bank diversifies its fundingsources across markets, instruments, and maturities. ADB hasso far issued bonds in 25 markets. The bank offers a variety ofdebt products to investors including large, liquid benchmarkbonds, plain vanilla bonds, emerging market currency bonds,and a broad range of investor-specific structured notes, tailoredto investor requirements.

In 2008 ADB raised US$9.4 billion in medium- and long-term borrowings and its target funding volume for 2009 isabout US$11 billion.


ADB was the first supranational to issue Kangaroo bonds,bringing a A$1 billion five-year transaction in September 1998.The bank followed its debut deal with trades in 1999, 2001 andevery year from 2006 to 2009. In total, by the beginning ofSeptember 2009 ADB had issued A$4.575 billion in theKangaroo market, with just over A$3 billion outstanding in fivematurities (2011, 2012-2014 and 2016).

ADB has not yet issued Kauri bonds but continues tomonitor the market with interest.

About ADB

A sian Development Bank (ADB) was established in1966 and is owned by its 67 member countries. Thebank’s main goal is to reduce poverty in Asia and thePacific region through inclusive economic growth,environmentally sustainable growth and regional

integration. ADB pursues its goal primarily by providing variousforms of financial assistance to its developing member countries.

ADB was founded mainly to act as a financial intermediaryto transfer resources from global capital markets to developingmember countries for economic development. Its ability tointermediate funds from global capital markets for lending toits developing members is an important element in achieving itsdevelopment missions. In 2008 ADB approved 98 loans forUS$10.5 billion (96 loans for US$10.1 billion in 2007).

Ownership

Of ADB’s 67 members, 48 are from the Asia Pacific region.Forty-one are borrowing members. ADB’s five largestshareholders are Japan and the US (each with 15.6% of totalshares), People’s Republic of China (6.4%), India (6.3%) andAustralia (5.8%). Twenty-three ADB members are alsomembers of the Organisation for Economic Cooperation andDevelopment (OECD), and they hold 64.5% of the bank’stotal subscribed capital.


ADB’s members have subscribed about US$55 billion ofcapital, of which about US$4 billion was paid-in and theremainder callable as of December 31 2008. Paid-in capitalconstitutes the equity portion of capital available for ADB’sOCR lending operations. This is supplemented by retainedearnings and leveraged by the proceeds of ADB’s borrowings.ADB’s capital quality remains excellent, with triple-A ratedmember countries holding 57% of total subscribed capital anddouble-A rated member countries holding 4% of totalsubscribed capital.

Callable capital is available to protect ADB’s creditors asneeded for debt service payments and thus provides the

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BANK


Risk policy

Risk management at BNG is determined by the bank’sobjective to offer its shareholders a reasonable return, subjectto the key condition that its excellent creditworthiness remainsintact. This is reflected in, among other things, the impositionof strict and solid limits on credit, market, liquidity andoperational risks.

Funding strategy

For 2009 BNG expects to raise in the region of €13-15 billionequivalent in the international capital markets. This compareswith the €13.1 billion equivalent raised by the agency in 2008.

The bank strives to issue benchmark bonds with aminimum size of one billion denominated in euros and USdollars each year so as to maintain yield curves in bothcurrencies. The rest of the funds is raised in the major markets– yen, sterling, Swiss franc, Australian dollar (Kangaroo), NewZealand dollar (Kauri) and Canadian dollar (Maple) – as well asthrough smaller retail-type transactions, private placements andstructured deals. All issues are swapped back into euros. Afterthe sovereign, BNG is one of the largest issuers in theNetherlands.


BNG has issued in AUD in the Kangaroo, Uridashi and euro-Aussie markets. By the beginning of September 2009 the agencyhad issued a total of A$2.050 billion in the Kangaroo bondmarket, with A$950 million outstanding in two maturities.BNG’s Kangaroo bonds are repo-eligible with the Reserve Bankof Australia.

BNG debuted in the Kauri bond market in 2007, becomingthe first triple-A rated agency issuer to enter the market. BySeptember 2009 the agency had issued a total of NZ$525million in the Kauri market, with NZ$400 million outstanding intwo maturities. BNG’s Kauri bonds are repo-eligible with theReserve Bank of New Zealand.

About BNG

B ank Nederlandse Gemeenten (BNG) is a Dutch bankof and for local authorities and public sectorinstitutions. All the bank’s shareholders are publicauthorities. Since 1921 the agency has been 50%owned by the Dutch central government, while the

remaining 50% is owned by municipalities, provinces and awaterboard in the Netherlands.

The bank’s mission is to help minimise the cost to the pubicof the provision of social services.

Ownership

BNG’s share ownership is restricted by its Articles ofAssociation to the State of the Netherlands, provinces,municipalities, water boards and other public bodies.

Half of the bank’s share capital is held by the State ofthe Netherlands and the other half by more than 95% of allthe municipal authorities, 11 of the 12 provincial authoritiesand a waterboard.

Changes in the present stakeholder structure are notexpected. The central government’s 50% stake has been heldsince 1921. The strong commitment of the central governmentto its holding was evidenced by its participation in the mostrecent issue of shares in 1990 so as to maintain its 50% stake.There have only been two share transfers among lower-tiergovernmental entities in BNG’s history.


There has never been a call on the capital of the bank.Although BNG’s obligations do not carry a direct stateguarantee, the bank has substantial support from the 50%ownership by the Dutch government.

BNG’s high-grade asset quality reflects the fact that closeto 90% of customer loans are public sector credits. Inaddition, the bank’s credit exposure is extremely low. Themajority of the loans and the securities portfolio consists ofreceivables from or guaranteed by public authorities with azero per cent risk weighting.

BANK NEDERLANDSE GEMEENTEN


Capital Markets Department+31 70 3081 [email protected]

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FOR FURTHER INFORMATION PLEASE CONTECT:

Philippe Noël, Head of Capital Markets+ 33 1 55 78 58 [email protected]

as on capital gains from property (6%), investments (5%), andthe sale of precious metals and gaming (2%).

Risk policy

CADES can only invest in bonds issued by the Frenchgovernment or that have an explicit guarantee from the Frenchgovernment. It has no exposure to currency risk.

Funding strategy

The financing strategy implemented by CADES since itscreation has helped the organisation to become a top-gradeinternational issuer. The broadening of the scope of its remithas further enhanced its status, allowing CADES to continuethe consolidation of its debt, 80.8% of which was financed bymedium- and long-term programmes by July 16 2009.

The extension of CADES’ mission produced a peak in itsfunding requirement in 2004-2005 when its raised €21 billion inlong-term debt. After this, in 2007 and 2008 the needs forfunds came from the redemption of existing bonds and short-term paper (€10 billion per year). The transfer of an additional€26.9 billion in 2009 has increased the CADES fundingprogamme to €33 billion.

By July 16 2009 CADES had issued €11.65 billion inmedium- and long-term bonds denominated in euro (both newtranches and taps on existing bonds), €4.19 billion equivalent inUSD new benchmarks, €1.48 billion equivalent in public bondsin other currencies including CHF, JPY, GBP and AUD; and€1.27 billion in private placements and MTNs.

Outstanding debt is mostly denominated in euro (67%) andUSD (31%). AUD represents one third of the remaining 2%.


CADES has raised A$2 billion in the Kangaroo market in threematurities. While it was first regarded as an arbitrage market,this is now considered by CADES to be a strategic market as away of diversifying its investor base and providing new sourcesof funding. CADES has also been active in the AUD MTNand Uridashi markets.

CADES has not yet issued in the Kauri bond market.Documentation is up to date, so the agency is waiting for acost-efficient opportunity to enter this market.

About CADES

C ADES (Caisse d’Amortissement de la Dette Socialeor Social Security Debt Repayment Fund) wasestablished by government order N° 96-50 datedJanuary 24 1996. This legislation was amended byAct n° 2004-810 of August 13 2004, as part of the

ongoing reform of France’s social insurance system. CADES’sexistence is therefore inseparable from efforts to balance theaccounts of the French social security system.

CADES’s mission is to finance and extinguish the debtaccumulated by the basic national social security scheme from1994 to 2006. The total debt includes a deficit of €34.2 billionfor 1994 to 1998, an estimated €35 billion for the years from2002 to 2004, and €15 billion for 2005 and 2006. Moreover,every year until 2005 CADES is obliged to make a €3 billionpayment to the state budget to compensate for the €16.77billion social security liability taken on by the state in 1993.

Although CADES was created with a limited life span in1996, the law of 2004 abolished the deadline of 2014. It alsoguaranteed CADES would receive additional resources shouldnew debt be transferred onto its balance sheet to maintain anestimated target for a steady completion of its mission(estimated in 2021). Following the transfer of €26.9 billion ofnew debt in Q1 2009 an additional tax claim was attributed toCADES (0.2% of General Social Contribution).

Ownership

CADES is wholly owned by the French State.


CADES’ debt financing relies on its borrowing power onfinancial markets and on the use of a variety of financialinstruments. The repayment of these issues is mainly guaranteedby the proceeds of a mandatory levy on citizens’ income. Thislevy, known as the Contribution to the Repayment of SocialSecurity Debt (CRDS), was introduced in 1996 to provideCADES with revenue to amortise its assumed debt. This 0.5%tax is levied on all earned and replacement income (87%) as well

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risk management and control policy, even though as asupranational financial organisation it is not compulsory. Inaccordance with these regulations, CEB ensures that nocounterparty exceeds the limit of 25% of its own funds. Withregard to the liquidity policy, the bank’s liquidity must not beless than 50% of net requirements for the next three years.

Funding strategy

To ensure constant access to the resources needed to fund itsactivities, CEB issues benchmark borrowings in majorcurrencies targeting a broad range of investors. Smallertransactions, to answer specific investor demand in terms ofcurrencies and structures, complement the funding activity.

In 2008 CEB raised €3.3 billion and the fundingrequirement for 2009 is around €2.5 billion. By July 31 2009CEB had raised €1.4 billion in six currencies (USD, GBP, CHF,AUD, NZD and HKD).


Since its inaugural Kangaroo deal in September 2004 CEB hadissued A$2.3 billion in the Kangaroo market in four maturitiesby the beginning of September 2009, with A$1.8 billionoutstanding. CEB’s most recent Kangaroo deal was brought inMay 2009. The bank has also issued in the euro-Aussie market.

CEB debuted in the Kauri bond market in January 2008and by the beginning of September 2009 had issued a total ofNZ$675 million in three maturities – November 2011, October2014 and April 2018.

CEB intends to monitor the market closely so as to be aregular issuer in NZD. Given the long-term character of itssocial vocation loan activities, the bank is mainly interested inthe longer part of the curve – five-year maturities and longer.

About CEB

C ouncil of Europe Development Bank (CEB) is amultilateral development bank with a socialvocation. Established on April 16 1956 to bringsolutions to the problems of refugees, its scope ofaction has progressively widened to other sectors of

action directly contributing to strengthening social cohesion inEurope.

CEB represents a major instrument of the policy ofsolidarity in Europe: it uses its resources for the financing ofsocial projects in order to help its 40 member states achievesustainable and equitable growth.

Ownership

CEB has 40 member states across Western and EasternEurope. The countries with the biggest shareholding areGermany, France and Italy – all founding members of thebank and each with a 16.64% share. The total amount ofsubscribed capital stands at €3.3 billion, out of which €2.9billion is callable.

Member countries are Albania, Belgium, Bosnia andHerzegovina, Croatia, Cyprus, Czech Republic, Denmark,Estonia, Finland, France, Georgia, Germany, Greece, Holy See,Hungary, Iceland, Ireland, Italy, Latvia, Liechtenstein,Lithuania, Luxembourg, Malta, Moldova, Montenegro,Netherlands, Norway, Poland, Portugal, Romania, San Marino,Serbia, Slovak Republic, Slovenia, Spain, Sweden, Switzerland,the former Yugoslav Republic of Macedonia, and Turkey.


CEB has preferred creditor status among borrowing members.57.3% of callable capital is rated AAA while 23.4% is AA-rated. Over 90% of callable capital is investment grade.

Risk policy

CEB established, well before the global financial crisis, anintegrated risk management process quite independent fromoperational activities. CEB is using the Basle CommitteeRecommendations and the European Union Directives in its

COUNCIL OF EUROPE DEVELOPMENT BANK


Arturo Seco-PresencioHead of Funding+33 1 4755 [email protected]

Magnus Sandin Senior Funding Officer+33 1 4755 [email protected]

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Eila Kreivi, Head of Funding for the Americas and Asia Pacific+352 4379 [email protected]/investor_relations

maximum loans outstanding equivalent to two and half timesits capital. Also, EIB’s Statutes do not permit the taking offoreign exchange views and EIB is very conservative in itsinterest rate risk policy, with an almost matched book. The loanbook results demonstrate a conservative loan policy, with anoverwhelming focus on well-secured lending. Non-performingloans were 0% as of end of June 2009.

Funding strategy

The cornerstone of EIB’s funding strategy continues to be thecombination of benchmark issuance in the three corecurrencies, offering exceptionally comprehensive and carefullymaintained yield curves. In 2008 EIB raised the equivalent of€60 billion, with AUD the fourth-largest currency of issuance.The funding programme for 2009 is €80 billion and againAUD stands in fourth place year to date. By September 4 2009EIB had raised almost €71 billion in 17 currencies.


EIB has issued AUD in the global, Uridashi, euro-Aussie andKangaroo markets, but focuses nowadays on the most liquidand public Kangaroos. EIB remains the largest overall issuer inthe Kangaroo bond market, with A$12.1 billion issued in totalacross 10 maturities and A$11.5 billion outstanding in themarket across nine maturities by September 4 2009.

As with the core currencies, EIB remains committed tomaintaining and further developing a liquid Kangaroo market –and by September 4 2009 had already issued A$2.9 billion in thiscalendar year, including opening two new maturities, 2014 and2019. This makes EIB the largest Kangaroo issuer in the year todate. EIB is also the only Kangaroo issuer to have a A$2.5 billionline outstanding, its 6% 2013 bond. In 2006 EIB issued the firstKangaroo inflation-linked bond, a A$250 million line due 2020,which was increased in December 2007 to total A$500 million.

The NZD was EIB’s seventh-largest currency in 2008 via arange of products including a Kiwi Uridashi, NZD eurobonds,and a Kauri bond, totalling NZ$1.5 billion. EIB also has aNZD global line outstanding which was issued in 2007 with amaturity of 2010. In the Kauri bond market, EIB has NZ$900million outstanding in two maturities. This year, EIB has seenless demand for NZD.

About EIB

E uropean Investment Bank was created by the Treaty ofRome in 1958 as the long-term lending bank of theEuropean Union (EU). The task of the bank is tocontribute towards the integration, balanceddevelopment and economic and social cohesion of the

EU member states. EIB raises substantial volumes of funds onthe capital markets which it lends on favourable terms toprojects furthering EU policy objectives. EIB continuouslyadapts its activity to developments in EU policies, andperiodically revises a tightly-focused range of lending priorities.

Ownership

EIB is owned by all the 27 member states of the EU. Sinceshareholdings are based mainly on GDP, the 15 countries whowere EU members before 2004 account for 94.8% ofshareholding while the 12 newcomers since 2004 account for5.2%. However, the four largest countries have equalshareholdings of 16.2% each, 64.7% in total. Three of theseare triple-A rated (Germany, France and the UK) and one israted double-A (Italy). The EIB shareholder structure by ratingis as follows: AAA: 72.1%, AA: 21.8%, A: 4.6% and BBB:1.5% (all based on best rating).


EIB is very strongly capitalised, being solely and entirely ownedby the 27 members of the EU. As of April 1 2009 EIB’s totalsubscribed capital was €232.4 billion. This new level ofsubscribed capital is more than double the bank’s risk-weightedassets of €103 billion. As at end Q1 2009, paid-in capital andreserves, or own funds, amounted to €36 billion. This is all top-quality Tier 1 capital, and makes the capital adequacy (BIS II ratio)exceptionally high at 35%. Since more than 90% of lending is toprojects in EU countries, the shareholders are beneficiaries ofEIB’s lending activities, which is reflected in their strong support.

Risk policy

To help minimise shareholders’ and creditors’ risk, EIB has setleveraging guidelines. Under its Statute, the bank may have

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inherent in the company’s operations. A comprehensive set ofinternal guidelines and policies, as well as systems andprocedures, are in place to control and report on the mainfinancial risks.

Funding strategy

EUROFIMA’s funding strategy is built on three pillars. First,US dollar benchmark issues. There are currently six US$1billion benchmark bonds outstanding with tenors from 2010 to2017. Secondly, the supranational also focuses on providingcontinuous and consistent offerings in Swiss francs andAustralian dollars. In its own domestic market EUROFIMAoffers one of the most complete yield curves up to a maturityof 2030. In the Kangaroo market it is one of the majorborrowers with a complete curve out to 2022.

The final pillar is currency diversification: beyond itsstrategic focus on the above three markets, EUROFIMA offersbonds in a wide range of currencies. At December 31 2008 thesupranational had outstanding bonds in 14 different currencies.

In 2008 EUROFIMA raised the equivalent of CHF4billion, with the Australian dollar being the second-largestcurrency of issuance during the year. The funding programmefor 2009 is about CHF2 billion. By July 31 2009 EUROFIMAhad raised CHF700 million.


EUROFIMA is one of the largest Kangaroo issuers and it isbest known as an issuer of longer-dated paper, with 2018, 2020and 2022 lines. The supranational debuted in the Kangaroomarket in 2001 and by the beginning of September 2009 hadA$6.035 billion outstanding across eight maturities. Besides theKangaroo market, EUROFIMA has also issued Australiandollars in Eurobond and Uridashi format.

In New Zealand dollars EUROFIMA is present in the Kauri,Eurobond and Uridashi markets. In 2008 the supranationallaunched its inaugural Kauri and Uridashi bonds. The NZ$275million May 2013 Kauri is EUROFIMA’s only outstanding bondin this market, but confirms EUROFIMA’s commitment todiversification of funding currencies and investor base.

About EUROFIMA

E uropean Company for the Financing of RailroadRolling Stock (EUROFIMA) is a supranationalorganisation located in Basel, Switzerland. It wasestablished in 1956 based on an international treatysigned by 25 European sovereign States so far.

EUROFIMA fulfils a non-profit maximising mission tosupport the development of rail transportation in Europe. Itsupports its shareholder railways as well as other railway bodiesin renewing and modernising their equipment.

Ownership

EUROFIMA is owned by national railway companies in 25European countries. Railways based in countries with a Aaasovereign rating hold more than 67% of shares, while railwaysbased in countries with an investment-grade rating hold 97%.


67.2% of callable capital is rated triple-A, while 25.5% isdouble-A rated. In total 97.36% of callable capital isinvestment grade.

EUROFIMA’s credit support is particularly strong as itrelies on several elements:

• Railway equipment collateral (EUROFIMA holds title toor security interest on the equipment until full repaymentof the financing);

• Extensive reserves;• Government guarantee (each member state guarantees

the obligations of its railway under the equipment financing contracts, and guarantees the obligations of its railway as EUROFIMA’s shareholder);

• Joint shareholders’ guarantee (each shareholder guarantees the fulfillment of all EUROFIMA’s equipment financing contracts in proportion to its holding in EUROFIMA’s share capital).

Risk policy

EUROFIMA’s risk management activities seek to appropriatelyidentify, measure, monitor and report all types of financial risks

EUROFIMA

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Martin Fleischer, Head of Capital Markets+41 61 287 [email protected]

*SEE Q&A ON P19 FOR MORE DETAIL ON EUROFIMA

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Rodrigo Robledo, Funding Manager+34 91 592 [email protected]

through different public transactions in a diverse range ofmarkets (EUR, USD, GBP, JPY, NOK and CHF) as well asthrough several investor tailor-made private placements. As faras currencies are concerned, the breakdown is as follows: 66%EUR, 25% USD, 5% JPY, 2% GBP, CHF and NOK 1% each.

Currently, ICO has three issuance programmes: a €75billion EMTN programme set up in 1996; a A$6 billionKangaroo programme in place since 2005; and a ¥300 billionSamurai programme.


ICO has been issuing in the Kangaroo market since May 2005and since then has issued a total of A$4.15 billion. In the yearto the beginning of September 2009 ICO had four outstandingbenchmarks in this market totalling A$3.55 billion – A$700million in the October 2009s, A$1.35 billion in the March2011s, A$1.2 billion in the October 2012s and A$300 million inthe February 2014s.

ICO will continue to look at the Kangaroo market with astrategic approach, aiming to further develop its yield curve, inaccordance with Australian investors’ preferences.

ICO has not yet issued in the Kauri bond market.

About ICO

I nstituto de Crédito Oficial (ICO) is a state-ownedcorporate entity attached to the Ministry of Economy andFinance of Spain and acts as the Kingdom of Spain’sfinancial agency. ICO’s objectives are to support andpromote those economic activities which will contribute to

economic growth and a more equitable distribution of thenation’s wealth and, especially, those which due to their social,cultural, innovative or ecological significance are particularlyworth developing. In doing so, ICO must strictly adhere to theprinciples of financial equilibrium and adequacy of resources.

As the State’s financial agency, ICO follows thegovernment’s specific instructions in the provision of financingto victims of serious economic crises, natural disasters andother similar circumstances.

Ownership

ICO is wholly owned by the Kingdom of Spain(AA+/Aaa/AAA).


There has never been a call on capital of the bank. Pursuant toits by-laws, all debt issued by ICO benefits from the statutoryguarantee of the Kingdom of Spain. This guarantee is direct,explicit, irrevocable and unconditional. For this reason, ICOenjoys the same rating as the Kingdom of Spain –AA+/Aaa/AAA awarded by the three major rating agencies –and its debt is 0% risk weighted.

Risk policy

ICO is supervised as a credit institution by the Central Bank ofSpain. The agency has developed risk procedures to limitliquidity, interest, currency, credit and operating risk. ICO’s riskpolicy fulfills Basel II rules.

Funding strategy

ICO’s funding needs in 2009 are approximately €16 billion. Asat July 31 2009 ICO had already issued around €11.5 billion

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to strategic markets and MTN transactions targeted toparticular segments of demand. In its global benchmark USDand strategic markets IADB aims to develop a yield curve ofbenchmark securities and to promote liquidity for such bondsby obtaining broad sponsorship from underwriters, deepeningthe investor base by cultivating different types of investors invarious regions, and its debt repurchase programme.

As of August 31 2009 IADB had issued US$11.1 billion in10 different currencies, with the top three being USD, AUDand CHF.


IADB considers both the AUD and NZD as strategic marketsand it aims to build a yield curve and large liquid benchmarks inthese currencies over time. When considering re-openings thefirst priority is to ensure existing bondholders are not harmed,especially in terms of performance. A re-opening is onlyconsidered to meet investor demand.

IADB established its Australian Dollar Medium-Term NoteProgramme in July 1999. Its debut Kangaroo bond was issuedin March 2001 – a A$675 million November 2006 line. By thebeginning of September 2009 IADB had issued over A$4.3billion in the Kangaroo market, with A$3.625 billionoutstanding in six maturities ranging from December 2010 toFebruary 2021. During the 2009 year so far IADB has issuedtwo Kangaroo bonds: a A$575 million August 2019 line and aA$750 million May 2014 bond. IADB is on the Reserve Bankof Australia’s list of repo-eligible borrowers.

IADB issued its debut Kauri bond in December 2007 witha NZ$100 million April 2015 line that was tapped in January2008 to total NZ$300 million. By the beginning of September2009 IADB had NZ$400 million outstanding across twomaturities. So far in 2009 the bank hass issued one Kauri bond– a NZ$100 million May 2017. IADBs Kauri bonds are repo-eligible with the Reserve Bank of New Zealand.

In addition to Kangaroo and Kauri issuance, IADB hasalso issued in Uridashi, eurobond and global formats. Whenconsidering all the issuance formats, the AUD and NZD haveconsistently ranked in the top three currencies of issuance forIADB from 2004-2008 (with the exception of 2007).

About IADB

I nter-American Development Bank (IADB), the oldest andlargest regional multilateral development institution, wasestablished in 1959 to support the sustainable economicand social development of Latin America and theCaribbean. IADB partners with countries to combat

poverty and promote social equity through programmestailored to local conditions. Working with both governmentsand the private sector, IADB seeks to promote sustainableeconomic growth, increase competitiveness, modernise publicinstitutions and foster free trade and regional integration.

Ownership

IADB is owned by 48 countries – 26 Latin American andCaribbean governments, the US (30% of voting share), Japan(5.0%), Canada (4.0%) and 19 non-regional governments. Itsfive largest shareholders are the US (30.0%), Argentina(10.8%), Brazil (10.8%), Mexico (6.9%) and Venezuela (5.8%).


IADB has subscribed capital totalling US$100.9 billion, of whichUS$4.3 billion is paid-in capital and US$96.6 billion is callablecapital. Callable capital is subject to call only for debt servicepayments. IADB has never made a call on its callable capital.

Risk policy

With regard to borrowings IADB’s policy is to limit theamount of its net borrowings (defined as the amount ofborrowings plus gross guarantee exposure, less qualified liquidassets and the special reserve assets) to the subscribed callablecapital stock of its non-borrowing member countries (the US,Canada and other non-regional members). The three largestnon-borrowing shareholders provide 78% of the subscribedcallable capital supporting IADB’s borrowings and they are theUS (60%), Japan (10%) and Canada (8%).

Funding strategy

IADB’s funding strategy is based on the issuance of largeglobal benchmark (primarily US dollars) bonds, bonds targeted

INTER-AMERICAN DEVELOPMENT BANK


Laura Fan, Head of Funding+ [email protected]/fin/

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John Borthwick, Deputy Treasurer+1 202 473 [email protected]

sector companies without the benefit of sovereign guarantees,IFC loans have never been included in a sovereign debtrescheduling, nor have payments to the IFC ever beenpermanently interrupted by a general debt-servicing moratorium.

Risk policy

Investment in a single obligor may not exceed 4% of net worthplus general reserves on loans. Total exposure to a single risksector may not exceed 12% of net worth plus general reserveson loans. By country, the exposure limit is 20% of net worthplus general reserves on loans.

Funding strategy

IFC raises virtually all the funds for its lending activitiesthrough the issuance of debt obligations in the internationalcapital markets. Borrowings are diversified by currency,maturity and market to provide flexibility and costeffectiveness. A consistent triple-A credit rating based onconservative policies and excellent financial performance hasassisted in building significant and distinct name recognition inthe marketplace for IFC. In fiscal year 2009 IFC raised theequivalent of US$8 billion. The funding programme for fiscalyear 2010 is US$9.5 billion.


IFC debuted in the Kangaroo bond market in February 2008with a A$500 million five-year bond, following a roadshow toAustralian investors in December 2007. The 2013s were tappedfor a further A$500 million in June 2008. A year later IFCissued a A$750 million five-year bond, which was increased inJuly by another A$500 million. IFC’s operations have beengrowing rapidly, which should facilitate regular Kangarooissuance in the years ahead. These borrowings will be bothselective increases to outstanding bond issues to increase theirliquidity as well as new issues in benchmark maturities.

IFC debuted in the Kauri bond market in August 2007,with a NZ$300 million five-year line which it increased later thesame month to NZ$500 million. In July 2009 IFC issuedanother NZ$150 million five-year Kauri bond. IFC’s growingfunding requirements means it will continue seek opportunitiesto issue in the Kauri market.

About IFC

I nternational Finance Corporation (IFC), a member of theWorld Bank Group, was founded in 1956 to promote andsupport economic growth in developing countries byfinancing private sector investment, mobilising capital inthe international financial markets, and providing advisory

services to businesses and governments.IFC helps companies and financial institutions in emerging

markets create jobs, generate tax revenues, improve corporategovernance and environmental performance and contribute totheir local communities. The goal is to improve lives, especiallyfor the people who most need the benefits of growth.

IFC emphasises five strategic priorities for maximising itssustainable development impact:

• Strengthening its focus on frontier markets, particularly the SME sector;

• Building long-term partnerships with emerging globalplayers in developing countries;

• Differentiation from its competitors via sustainability;• Addressing constraints to private sector investment in

infrastructure, health, and education; and • Developing domestic financial markets through domestic

market borrowings, institution building, and the use ofinnovative financial products.

Ownership

IFC’s membership consists of 182 governments worldwide,which must also be a member of the International Bank forReconstruction and Development (IBRD). The biggestshareholder is the US with 23.5%, followed by Japan (5.86%),Germany (5.35%), and the UK and France (5.02% each). Theseven largest members of the Organisation for EconomicCooperation and Development hold 51.7% of IFC’s totalsubscribed capital.


There was a capital increase in the early 1990s. IFC has preferredcreditor status among borrowing members. Although IFC’sportfolio is fully exposed to commercial risk as it lends to private

INTERNATIONAL FINANCE CORPORATION

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*Fiscal years ending Jun 30 2009 and Jun 30 2010

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undertaken to anticipate and quantify the effects of differentdownturn scenarios on KfW’s overall risk exposure.

Funding strategy

KfW is the fifth-largest issuer of bonds in Europe. The bank’sfunding activities are based on a three-pillar strategy:benchmark programmes, other public bonds, and privateplacements.

The benchmark programmes feature large and liquid bondsin benchmark maturities in EUR and USD in global format. KfWalso issues public bonds outside the benchmark programmes,thus offering its investors a broad range of securities highlydiversified in currencies, terms and coupon structures. KfW alsoissues bonds and notes in the form of private placements so as tosatisfy demand from institutional investors for customisedproducts. The structure, currencies, maturities and repayment ofthese bonds and notes are flexible and tailored to the specificinvestment needs of individual investors.

In 2008 KfW issued in more than 390 transactions in 23different currencies with a total volume of €75.3 billion. In theyear to the end of August 2009, KfW had already issued in 17different currencies and will continue to fulfill the strong demandfor liquid bonds from issuers with a first class standing. ByAugust 31 2009 KfW had raised €62.2 billion. KfW’s mostimportant currencies so far in 2009 have been euro (45%)followed by USD (36%), sterling (7%), yen (4%) and AUD (3%).


By September 4 2009 KfW had issued A$10.75 billion in theKangaroo bond market out of which A$2.6 billion was issuedin eight transactions in 2009. Overall, KfW has A$9.05 billionoutstanding in 11 lines. Therefore AUD ranks fifth in KfW’sfunding programme. KfW has also been active in the AUDeurobond and Uridashi markets.

In NZD KfW focuses on issuance in EMTN and Uridashiformat and has an outstanding volume of NZ$3.7 billion.

About KfW

K fW Bankengruppe (KfW) is Germany’s largestdevelopment agency serving the domestic andinternational public policy objectives of thegovernment of the Federal Republic of Germany.KfW conducts its business in the following six

operative business areas:• KfW Mittelstandsbank (KfW SME Bank): focuses on

small- and medium-sized enterprises and other commercial clients;

• KfW Privatkundenbank (KfW Private Client Bank);• KfW Kommunalbank (KfW Municipal Bank):

responsible for public clients such as municipalities and regional promotional banks;

• Export and project finance (KfW IPEX-Bank): accordingto an understanding with the EU this business is conducted by the 100% subsidiary KfW-IPEX Bank,which will fund itself through KfW;

• Promotion of developing and transition countries (KfWEntwicklungsbank and DEG); and

• Financial markets: KfW’s treasury, funding, securitisation,and other capital markets-related activities.

Ownership

The Federal Republic of Germany owns 80%; the 16 federalstates own 20%.


KfW has an explicit federal debt guarantee and it also benefitsfrom the institutional liability (Anstaltslast), which means theFederal Republic, as the constituting body of KfW, has anobligation to safeguard KfW’s economic basis.

Risk policy

State-of-the-art risk management instruments and processesare used to identify, control and mitigate significant riskpotentials with respect to credit, market, liquidity as well asoperational risks. In addition, stress tests are regularly

KFW BANKENGRUPPE


TREASURERDr. Frank Czichowski+49 69 7431 2165

www.kfw.dewww.kfw.de/investor-relations

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¤3-5BN

CAPITAL MARKETS:Horst Seissinger +49 69 7431 2048Petra Wehlert +49 69 7431 4247Dr. Bernd Siegfried +49 69 7431 4236

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Thomas Møller, Executive Vice President & CFO+47 2150 [email protected]

management operations is kept to a minimum throughstringent policies on entering into financial contracts. KBN’sfinancial policies do not permit any outright interest rates andexchange rate risk. Liquidity risk is minimised by alwayskeeping liquidity which covers 12 months’ net debtredemptions plus budgeted new lending. The total liquidityportfolio is invested in liquid assets of high credit quality.

Funding strategy

Due to large accumulated budget surpluses, currently atapproximately 100% of GDP, the Kingdom of Norway doesnot issue any foreign currency debt. KBN, which represents bothNorway as owner and the Norwegian public sector, is the closestproxy to Norwegian sovereign debt available in the internationalcapital markets today. As a result, KBN offers investors a uniqueopportunity to gain exposure to the Norwegian public sector andone of the world’s wealthiest economies.

KBN’s aim is to follow a flexible and diversified fundingstrategy. To meet its funding objective, KBN has established astrategy based on four building blocks – institutional nichemarkets (15-25%); retail issuance (20-30%); benchmarkissuance (20-30%); and private placements (30-40%). In 2008more than 95 per cent of funding was raised outside Norwaythrough 269 individual transactions in 13 currencies, amountingto US$10.5 billion equivalent.


KBN remains committed to both the Kangaroo and Kauribond markets. Subject to investor appetite, the aim is for annualissuance in these markets of up to 5% of total funding volume.

KBN has issued AUD in the Kangaroo, Uridashi andeurobond markets. By the beginning of September 2009 theagency had issued a total of A$1.4 billion in the Kangaroomarket, with A$900 million outstanding in three maturities.KBN’s Kangaroo bonds are repo-eligible with the ReserveBank of Australia.

KBN debuted in the Kauri bond market in October 2007.by September 2009 the agency had issued a total of NZ$675million in two maturities in the Kauri market, all of which isstill outstanding. KBN’s Kauri bonds are repo-eligible with theReserve Bank of New Zealand.

About KBN

K ommunalbanken Norway (KBN) was established byan Act of Parliament in 1926/1999 as a government-owned institution with a public policy mandate fromthe central government to provide low-cost fundingto the Norwegian local government sector.

Ownership

Since June 2009 KBN has been wholly owned by the Kingdomof Norway.


The local government sector in Norway is closely monitored andsupported by the central government and KBN has neversuffered a loss or default on its loan portfolio since establishment80 years ago. KBN benefits from a maintenance obligationfrom the central government and in this statement it affirms:“The Kingdom of Norway considers it to be its duty to ensurethat KBN is always in a position to meet its financialobligations.” The maintenance obligation underlines the centralgovernment’s commitment to KBN as a government fundingagency and the importance it places on KBN as Norway’s mainprovider of low-cost finance to the local government sector.

The central government considers it extremely unlikelythat KBN should require emergency state assistance due itsexceptionally high quality asset base. The Kingdom ofNorway regulates the municipal sector to which KBN lendsand under the Local Government Act municipalities have astrong implicit central government guarantee and areprohibited from filing for bankruptcy. They are also subject toextensive oversight by the central government.

No municipality has ever failed to pay its debt and KBNhas not experienced a loan loss since it was founded in 1926.

Risk policy

Credit risk for loans to local governments only relates topotential late payment of interest and instalments. Credit riskarising from KBN’s funding portfolio and liquidity

KOMMUNALBANKEN NORWAY

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Risk policy (investments)

Investment guidelines are approved annually by the Board. Theliquidity buffer portfolio has conservative credit ratingrequirements and high requirements on secondary marketliquidity. Prefunding is mainly invested in highly-rated financialmoney market instruments and floating rate notes. Allinvestments are currently in euro and no foreign currency riskis allowed. According to Finnish law the maximum exposure toa single obligor may not exceed 25% of own funds.

Funding strategy

MuniFin is an active and frequent issuer in the Asian, Swiss andeuro markets. The Japanese market especially has been animportant source of funding for several years. Most of thefunding transactions are done under MuniFin’s standardisedissuance programmes and proceeds from other currencies areusually swapped back to euros.

During 2009 MuniFin had issued in 15 different currenciesby the end of July and will continue its strategic plan ofbuilding up issuance in emerging market currencies, both inlocal markets and via eurobond format. By July 31 2009MuniFin had raised the equivalent of €4.5 billion. In 2008MuniFin raised a total of €4.5 billion in medium- and long-term funds, with the AUD the fourth-largest currency ofissuance. The funding volume for 2009 is around €5 billion.


MuniFin established a A$1 billion Kangaroo programme in 2006and issued its inaugural transaction under this programme inApril 2007 – a A$200 million 6.5% April 2011 bond. This wastapped in January 2008 by A$100 million and in August 2008 bya further A$90 million. By the beginning of September 2009MuniFin had a total of A$1.26 billion of AUD-denominatedissues outstanding, most of which are Uridashi bonds.

MuniFin debuted in the Kauri bond market in May 2008with a NZ$100 million June 2011 bond. This was increased inSeptember 2008 by NZ$100 million and again in November2008 by NZ$75 million. By the end of July 2009 the agencyhad a total of NZ$589 million of NZD-denominated issuesoutstanding, most of which are Uridashi bonds.

About MuniFin

M unicipality Finance (MuniFin) is the only publicsector-owned credit institution in Finlandspecialising purely in the local government sector.MuniFin offers funding to municipalities,municipal federations and organisations owned or

controlled by those, and housing corporations that serve thepublic good, by raising funds in the Finnish and internationalcapital markets. The agency was established in 2001 after themerger of “old” Municipality Finance (est. 1989) andMunicipal Housing Finance (est. 1993).

Ownership

MuniFin is owned 53.3% by Finnish local governmentstogether with the Association of Finnish Local and RegionalAuthorities. The balance is owned by the Local GovernmentPension Institute (LGPI) (30.7%) and the central governmentof Finland (16%). The LGPI, municipalities, centralgovernment, joint municipal boards, central municipalorganisation, corporations owned completely or on a majoritybasis by municipalities and companies owned by suchcorporations are the only entities that are allowed to beshareholders in Municipality Finance without special consent.The total number of shareholders as of June 30 2009 is 305.


There has never been a call on capital of the credit institution.Absolute guarantees by municipalities or joint municipalboards, or a deficiency guarantee plus a deficiency stateguarantee, are accepted as security for loans. Loans are grantedto municipalities or joint municipal boards without surety.

MuniFin’s debt programmes and all other financialobligations are guaranteed by the Municipal Guarantee Board(Kuntien takauskeskus) (MGB) (AAA/Aaa), established by law in1996. The 328 Finnish member municipalities representing morethan 99% of the local population are jointly liable on a pro ratabasis for the MGB’s commitments. All debt guaranteed by theMGB is 0% weighted by the Bank of International Settlements.

MUNICIPALITY FINANCE

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Timo Ruotsalainen, Head of Funding+358 9 6803 [email protected]

*SEE Q&A ON P15 FOR MORE DETAIL ON MUNIFIN

3 7


Tom Meuwissen, General Manager, Treasury Bouke den Hoed, Manager, Treasury+31 70 [email protected]

credit exposure, only to the Dutch State. Regarding assets, 99%carry a zero per cent risk weighting and the Bank forInternational Settlements (BIS) ratio is 53%. All assets areeligible for repo with the European Central Bank.

Funding strategy

NWB Bank has a €40 billion debt issuance programme. Totaloutstanding by mid-August 2009 was €33 billion. All proceedsare swapped directly to euro. The strategy is to aim to completebenchmarks in euro and US dollars each year. These are strategicdeals and their size is one billion or bigger.

By July 31 2009 NWB Bank had raised €5.5 billion for theyear to date, issued in six different currencies.


The Kangaroo market is strategic in the sense that NWB Bankis prepared to pay a few basis points more than in othermarkets. NWB Bank is keen to make its presence in this marketa success. NWB Bank debuted in the Kangaroo bond marketin March 2005 and since then has issued A$1.1 billion in fourmaturities by the beginning of September 2009, all of whichwere still outstanding. The agency also has a small amount ofAussie dollar eurobonds outstanding.

NWB Bank has amended its Kangaroo programme to beable to launch Kauri bonds off the existing Kangaroodocumentation. The agency is looking now to do the firstKauri issue.

NWB Bank’s Kangaroo bonds are repo-eligible with theReserve Bank of Australia, while the agency’s Kauri bonds willbe repo-eligible with the Reserve Bank of New Zealand.

About NWB Bank

N ederlandse Waterschapsbank (NWB Bank) wasestablished in 1954 with the objective of providingsound financial services to the public sector. Theshareholders are the Dutch government for 17%,provinces for 2% and the waterboards for the

remainder.The core business is providing long-term lendings to the

public sector – municipalities, waterboards, the social housingsector and the healthcare sector. These are all local authorities bythemselves or guaranteed by local authorities and the Dutchgovernment. They all have a zero solvency weighting so it canbe argued there is no credit risk. There has never been a default.

NWB Bank has AAA/Aaa ratings from Standard & Poor’sand Moody’s Investors Service.

Ownership

The ownership of the shares of NWB Bank is restricted by theArticles of Association. Only the State of the Netherlands,local authorities and other public bodies can be shareholders.The structure of stakeholders has never been changed sincethe bank was founded in 1954 and changes are not expected.The Dutch State owns 17%, provinces 2% and thewaterboards the remaining 81%.

Waterboards are responsible for the flood control, waterquality, water quantity and treatment of urban wastewater. Thefirst came into existence in the 13th century, which makes themthe oldest form of government in the Netherlands. They aredecentralised public authorities – their legal status is similar tothat of municipalities. They levy their own taxes and can applyrules to several parties such as residents, property owners andlandowners.


Loans are to local authorities or entities guaranteed by localauthorities and/or the Dutch government. The Articles statethat shares in NWB Bank can only be held by the Dutch Stateand other public sector bodies. It can be argued that there is no

NEDERLANDSE WATERSCHAPSBANK

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*SEE Q&A ON P11 FOR MORE DETAIL ON NWB BANK

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its risk management set-up. Credit, market, liquidity andoperational risks are managed carefully, with risk processesclosely integrated into business processes. NIB’s ordinarylending ceiling corresponds to 250% of the authorised capitaland accumulated general reserves.

Funding strategy

NIB’s asset and liability management methods and riskmanagement tools enable the bank to issue in differentcurrencies, structures, maturities and amounts. Issues aremainly documented under existing debt programmes.However, when required, this can also be done with standalonedocumentation.

NIB has issued in more than 36 different currencies. Thebank has been active in all the established currencies, includingNordic currencies, USD, euro, AUD, sterling, yen and HKD.To broaden its funding base, NIB also actively studiespossibilities and issues in emerging and developing markets, forexample in Eastern Europe and Asia.

NIB’s funding target for 2009 is around €4 billion. Inaccordance with the bank’s strategy it aims to have globaldiversification (investor base and currency) and a suitableduration to match NIB’s commitments. At August 2009 NIBhad carried out 57 transactions totaling €3.1 billion. In AprilNIB launched and priced its inaugural five-year €1 billionbenchmark, which has a maturity of five years and pays acoupon of 3%.

In 2008 NIB raised the equivalent of €4.7 billion, withAUD the third-largest currency of issuance.


NIB has issued Australian dollars in both the Uridashi andKangaroo bond markets. The bank debuted in the Kangaroomarket in 2006 and by the beginning of September 2009 hadA$1.8 billion outstanding in three different maturities (withA$500 million due to mature on August 24). NIB priced a 6%A$300 million five-year issue in August 2009.

NIB priced its inaugural Kauri deal – a NZ$400 millionthree-year – in September 2007. In June 2009 NIB priced aNZ$100 million increase to its April 2015 bond. The bank nowhas NZ$850 million outstanding in this market in two maturities.

About NIB

N ordic Investment Bank (NIB) is a multilateralfinancial institution that operates in accordancewith commercially sound banking principles. Thebank was originally founded by the five Nordiccountries of Denmark, Finland, Iceland, Norway

and Sweden. Membership of NIB was broadened at thebeginning of 2005 when Estonia, Latvia and Lithuania joinedas shareholders. NIB’s operations are governed by aninternational agreement among the member countries andstatutes pertained thereto.

NIB finances private and public projects which have highpriority with member countries and their borrowers. The bankfinances projects both within and outside member countries.NIB offers its clients long-term loans and guarantees oncompetitive market terms and it acquires the funds to finance itslending by borrowing on the international capital markets.

Ownership

NIB enjoys strong support by its owners. The supranational’sauthorised capital amounts to €4.142 billion and consists ofboth paid-in and callable capital. NIB’s member countries havesubscribed to the authorised capital in proportion to their grossnational income: Denmark (21.3%), Estonia (0.7%), Finland(18.5%), Iceland (0.9%), Latvia (1.1%), Lithuania (1.6%),Norway (19.1%) and Sweden (36.7%). In total, 10.1% of thesubscribed authorised capital stock is paid in. The remainder ofthe authorised capital consists of callable capital, which issubject to call if the Board of Directors deems it necessary.


There has never been a call on capital of the bank. NIB’scapital quality remains excellent, with Aaa rated membercountries holding 96%. Altogether, investment-grade membercountries hold 100% of paid-in capital.

Risk policy

NIB has a financial policy which defines and sets guidelines for

NORDIC INVESTMENT BANK

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Jens Hellerup, Director, Deputy Head of Funding & Investor Relations+358 10 10 618 [email protected]

3 9


Stefan Goebel Leopold OlmaHead of Treasury Head of Funding+49 69 2107 -269 +49 69 2107 [email protected] [email protected]

Republic. The obligation of the Federal Republic underAnstaltslast constitutes a legally-established charge on publicfunds that is payable without the need for appropriation or anyaction by the federal parliament.

Risk policy

Rentenbank has a strong loan portfolio, is well capitalised, has astrong focus on cost control and is very risk conscious. Thebank has no exposure to structured credit products.

Funding strategy

Rentenbank’s general funding strategy is to be successfullypositioned as an agency borrower with a strategic marketapproach. This includes regular benchmark issuance in euroand USD; excellent market access in all maturities through abroad range of available funding products and currencies; andcontinuous investor relations activities.

For 2009 the bank plans a total of medium- and long-termfunding in the area of €10 billion – slightly lower than in 2008.This will be comprised of up to four euro benchmarks andUSD global bonds with maturities up to 10 years and liquidissues in non-core dollar and Scandinavian currencies as well asGBP and JPY. There is also a stronger focus on domesticplacement both for bonds and loans. The volume issued in the2009 year to July 31 was €6.5bn in five different currencies.


Rentenbank debuted in the Kangaroo market in July 2002 andby September 8 2009 had issued A$7.85 billion in this marketin seven maturities, six of which are still outstanding for a totalof A$7.05 billion. In 2009 issuance will be subject to investordemand and market conditions. It is open to a mix of newissues and well-supported increases in maturities from three to10 years. Rentenbank also has a small amount of Aussie dollarEMTNs outstanding. The agency’s Kangaroo issues are repo-eligible with the Reserve Bank of Australia.

Rentenbank debuted in the Kauri bond market in 2007andnow has NZ$710 million outstanding in three maturities. Theagency’s Kauri bonds are repo-eligible with the Reserve Bankof New Zealand. Rentenbank has also issued NZ dollars in theeurobond and Uridashi markets.

About Rentenbank

R entenbank is a Federal German development agencywith a public mission to support agribusiness and therural areas in Germany. The bank has almost nocredit exposure to end-borrowers. Instead,Rentenbank refinances local banks, which on-lend the

funds to their customers and assume the credit risk.Rentenbank is supervised by the Federal Ministries for

Agriculture and Finance and is exempt from corporate incomeand trade tax due to its public mission.

Ownership

Rentenbank’s founding capital was raised through a publiccharge imposed on agricultural land in Germany from 1949 to1958. This charge was established by a federal law, the Law onthe Rentenbank Land Charge (Gesetz über die Rentenbankgrundschuld),dated May 11 1949. Rentenbank has no shareholders andGermany’s federal parliament exercises ultimate control overthe bank through legislative action.


Rentenbank benefits from the Anstaltslast, or institutional liability,of the Federal Republic. This means the Federal Republic willsafeguard the economic basis of Rentenbank; keep it in aposition to pursue its operations throughout its existence as astatutory body under public law; and – in the event of financialdifficulties – enable it by financial contribution or in some otherappropriate manner to perform its obligations when due. TheFederal Republic would not, under Anstaltslast, be permitted toallow Rentenbank to default on an obligation; the FederalRepublic would be required on its own authority to take steps toenable Rentenbank to perform the obligation when due.

Accordingly, while Anstaltslast does not constitute a formalguarantee of the obligations by the Federal Republic, and itscreditors do not have a direct claim against the FederalRepublic under Anstaltslast, the effect of Anstaltslast is thatRentenbank’s obligations to the holders of any of its securitiesare fully backed by the full faith and credit of the Federal

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Funding strategy

World Bank is one of the most recognised and innovativeborrowers in the international capital markets withachievements that include the very first currency swap in theinternational capital markets (1981), the first ever global bond(1989), the first fully electronic bond offering (2000) and anumber of firsts in many markets and structures in variouscapital markets.

World Bank debt products provide investors with thereassurance of a superior credit rating, a wide choice ofproducts, and strong secondary market performance for liquidWorld Bank benchmark bonds. World Bank also customises itsdebt offerings to meet investors’ specific asset and liability needs.

IBRD’s debt products include large USD global bonds andbonds tailored to both retail and institutional investors in avariety of currencies. For fiscal year 2008 ending on June 302008, World Bank raised US$19 billion in medium- to long-term funding. The AUD was the second-largest currency ofissuance during the year. For fiscal year ending June 30 2009IBRD issued US$44 billion in medium- to long-term funding,while the expected volume for the next fiscal year ending June30 2010 is US$30-35 billion.


World Bank has issued substantial volumes of AUD andNZD in the Uridashi market and it has also issued in the euro-Aussie market. The supranational debuted in the Kangaroobond market in 1999 with a A$500 million May 2003 bondwhich was increased twice, to total A$1 billion. In 2006 IBRDreturned to the Kangaroo market with a A$500 million 10-yeardeal. IBRD now has A$500 million outstanding in this market ina single bond which matures in November 2016.

World Bank opened the Kauri bond market for thesupranational, sovereign and agency sector in July 2007. Thebank’s inaugural Kauri deal was a NZ$350 million July 2014global Kauri bond. That deal was followed with a NZ$100million July 2012 bond targeted at retail and institutionalinvestors, issued in July 2008. In 2009 World Bank added to itsKauri curve with a NZ$300 million December 2014 bond. Thebank has followed the New Zealand market for many years – itfirst launched a NZD global bond in 1990.

About World Bank (IBRD)

I nternational Bank for Reconstruction and Development(IBRD), known in the capital markets as World Bank, is aglobal development cooperative owned by its 186 membercountries. World Bank’s goal is to work with membercountries so they can achieve equitable and

environmentally-sustainable economic growth that reducespoverty and improves standards of living.

The bank provides financial solutions, strategic advisoryservices and specialised expertise that help solve national, regionaland global challenges such as poverty and climate change. Itsmission to fight poverty and investments in sustainabledevelopment makes World Bank bonds suitable for socially-responsible investors.

World Bank is also the treasury manager for theInternational Finance Facility for Immunisation, the world’sfirst multilateral issuer that provides grants for a specificdevelopment purpose – health and immunisation programmes.

Ownership

World Bank is owned by 186 countries. Its five largestshareholders based on percentages of voting power are the US(16.4%), Japan (7.9%), Germany (4.5%), France (4.3%), andthe UK (4.3%).


World Bank’s 186 member shareholders support its creditthrough callable capital that can be called to satisfy bondholders’claims and certain guarantee obligations. There has never been acall on capital of the bank. At June 30 2009 the subscribedcapital of IBRD was US$189.9 billion, of which US$11.5 billionhad been paid in and US$178.4 billion was callable.

Risk policy

To manage shareholders’ and creditors’ risk, World Bank hasset risk management guidelines. Under its gearing ratio policythe bank may not have more loans and guarantees outstandingthan its subscribed capital, reserves and surplus.

WORLD BANK ( INTERNATIONAL BANK FOR RECONSTRUCTION & DEVELOPMENT)

SECTOR

RATING

RATING OUTLOOK


FUNDING VOLUME

USD BENCHMARK SIZE

EUR BENCHMARK SIZE

SUPRANATIONAL

AAA/Aaa

STABLE

0%

US$44BN/US$30-35BN

US$1-6BN

¤1 -3BN


Capital MarketsFax +1 202 477 8355/+1 202 522 7450 [email protected] www.treasury.worldbank.org

* Fiscal years ending Jun 30 2009 and Jun 30 2010

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