By Marta Vilar – MADRID (Econostream) – German investment and development bank KfW is likely to issue another euro green bond in Q2 2026, according to KfW’s Head of Capital Markets, Petra Wehlert.

In an interview with Econostream on 20 March (transcript here), Wehlert said the Middle East conflict “clearly impacts markets” and was affecting KfW’s issuance, referring to the US dollar benchmark issued earlier in March.

“In the morning, it was still hard to determine fair value, but by the afternoon conditions had stabilized,” she said of the transaction. “At that point, we were comfortable with a fair value around SOFR [Secured Overnight Financing Rate] plus 27.”

Wehlert said the current volatile environment had shortened issuance windows, making it difficult to plan ahead and requiring issuers “to act when the window opens.”

Identifying the right issuance window was now “challenging”, she said, noting that while Tuesday or Wednesday had traditionally been “ideal” for issuances, deals could now “happen on any day if conditions are favorable.”

The curve was flattening amid uncertainty and a wait-and-see approach from investors, she said, underscoring “the importance of choosing issuance windows carefully.”

KfW planned to return to the US dollar benchmark market later in 2026, Wehlert said, having raised USD9 billion so far this year against a typical annual target of USD20 billion.

“However, this depends on relative market conditions,” she said. “If dollars become more attractive than euros, we may increase issuance there.”

On the recent strengthening of the Swiss franc and the SNB’s intervention signals, Wehlert said KfW was “always open” to issuing in the currency, though the market is less deep and transactions would only occur “[i]f it makes economic sense.”

She added that recent developments made Swiss franc issuance “marginally” more likely, though demand remained relatively limited and liquidity lower than in other markets.

Wehlert also noted that volatility was influencing maturity choices, with bonds at the shorter end of the curve now easier to place, shifting KfW’s focus “more on the short end, typically up to five years.”

Further green issuance was expected this year, with Wehlert saying KfW was “likely to come early with another liquid euro green bond in the second quarter.”

A USD-denominated green benchmark remained a possibility, but was “not a priority,” she said, reflecting KfW’s preference for euros and Asian markets.