KfW has issued 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.
