Landwirtschaftliche Rentenbank is planning to raise the equivalent of approximately EUR 11bn of medium and long-term funding in 2008. This figure includes all transactions in the capital markets with maturities of more than two years. The promotional bank is likely to once again issue four benchmark bonds in the coming year in medium-term maturities with a minimum volume of EUR/USD 1bn. In addition, Rentenbank is planning to issue liquid transactions in other currencies. Benchmark funding will be complemented by smaller public issues and private placements in various currencies and different structures. The promotional bank's issuance activity for short-term funding is likely to shift from liquid US dollar and euro notes to Commercial Paper. This trend has already become apparent in the second half of 2007 according to Dr. Horst Reinhardt, the member of Rentenbank's board responsible for the capital markets.
In the year to date, Rentenbank has raised roughly EUR 11.2bn with maturities of more than two years from the capital markets. The cost of funding improved slightly in most foreign currencies and maturities. Once again, euro-denominated transactions experienced an above-average improvement. "This is not only the result of the improved over-all issuing conditions for euro-denominated transactions but also due to the increased attraction of our issues by the zero risk weighting which came into effect from 1 January 2007" according to Dr. Horst Reinhardt. Hence, the share of euro-denominated issues increased to around 31% (23) while US dollar issuance of medium and long-term funding dropped to 34% (48). Sterling issues amounted to 13% (5). The share of Australian dollar issues decreased slightly to around 7% (8). The remaining 15% of funding was raised from nine different currencies, in particular Japanese yen, Canadian dollar and New Zealand dollar.
In addition to its medium und long-term funding, the promotional bank issued notes from its EMTN (European Medium Term Note) Programme for short-term funding maturing or callable within two years for an amount of EUR 4bn (6). The average outstanding volume of the ECP (Euro Commercial Paper) Programme sharply increased to EUR 8.4bn (4.4).
Landwirtschaftliche Rentenbank is Germany's promotional bank for agriculture and rural areas. According to its legal promotional mandate, the bank promotes all types of projects associated with agriculture by loans offered at preferential interest rates which are channelled through other banks ("Hausbankprinzip"). The appropriation of profits is also subject to the promotional mandate. The bank is a public law institution, the capital base of which was raised by the agricultural and forestry sector of the Federal Republic of Germany. The bank mainly raises funds in international capital markets. Rentenbank is Triple A rated by the three major rating agencies.
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