Exclusive: KfW Head of Capital Markets: Will Issue USD Benchmark Bond Again in 2025 for 3-5 Billion

29 April 2025

By Marta Vilar – MADRID (Econostream) – German investment and development bank KfW could tap the USD market again in 2025, according to KfW’s Head of Capital Markets, Petra Wehlert.

In an interview with Econostream on April 8 (transcript here) Wehlert said that ‘[g]iven the current environment and that we want to come closer to an issuance of USD20 billion, we aim to issue more benchmark transactions, of which the size usually is around USD3-5 billion.'

‘[W]e will issue more in USD during the year if we find the right issuance windows’, she said. These would hinge on swap spreads, she said.

‘Depending on how swap spreads and basis swaps develop, we can offer attractive bonds and hedge them for ourselves in attractive levels’, she said. ‘So, it must work always on both sides.’

KfW was also monitoring movements in the USD green bond market, according to Wehlert.

‘Given the current changes, there is no funding advantage and no basis point to be saved on USD green issuances’, she said.

Wehlert expected to end 2025 with an issuance of the same number of currencies as in 2024.

Asked about the potential effect of US tariffs on demand for KfW’s bonds, Wehlert said the institution should benefit from the safe-haven status in euro-denominated debt.

‘Overall, I am positive on the euro market’, she said. ‘It might also be possible that the euro get more support and allocations from reserve managers given the turbulences in the US.’

Regarding USD-denominated debt, she said KfW’s bonds were an alternative to US Treasuries.

‘If they buy our USD bonds, they get liquid USD bonds with a German risk’, she said. ‘However, volatility in markets affects all market participants.’

The main challenge was to find the right issuance windows, she added.

As for this year’s remaining green bond issuance, she said the market could expect KfW to deliver a 5-year green bond issuance, ‘we’ll have to finetune this until then.’

Another blockchain-based digital bond could also be issued, according to Wehlert.

‘[W]e will probably look again at the liability side and add some additional features like secondary market liquidity, which is important for investors’, she said.