KfW Bankengruppe said that the securitization markets continue to be in a very difficult situation. Although some transactions took place in the course of the year, a functioning, liquid market is still very far away.
The German state sponsored bank emphasized that first and foremost it will be necessary for investors to regain trust in securitization before it can be utilized
again. A new quality standards need to be introduced in order to accomplish this, said the bank.
KfW is working on this jointly with other banks and the True Sale Initiative. "High-quality
securitizations can play a vital role in securing the supply of credit for enterprises, said Gunther Braunig, member of the managing board of KfW at a press conference today. This, in turn, is crucial for the economy to rebound and for avoiding a credit crunch, which would affect small and medium-sized enterprises most of all."
The bank said it has raised nearly 74 billion ($106 billion) in the international capital markets in 2009. It has raised 19 billion and $21 billion through its benchmark programs, which represent around 47% of the funding volume.
The share of German subscribers to euro benchmark bonds more than doubled to 34% (2008: around 15%), while the share of U.S. investors in USD global bonds increased to just under 47% (2008: some 27%).
In 2010 investors can expect more large-volume, liquid KfW benchmark bonds in the core currencies euro and USD in all maturities. KfW expects funding requirements of 70 billion to 75 billion.
As a result of fiscal policy and the difficult economic situation, Braunig expects a high volume of European government bonds to be offered next year.
"Uncertainty and volatility will continue to accompany us in our capital market activities in 2010, and even issuers of the highest credit quality like KfW are not immune to difficult market conditions, Braunig said. Yet particularly in the crisis year, there was strong demand for liquid, high-quality investments such as the ones we offer. This is why we are confident about 2010.