KfW issued its first large-volume reference bond as a central registry security under the German Electronic Securities Act (eWpG) with a value date of 2 July 2024.
The issuance was facilitated by Clearstream via Deutsche Börse’s D7 digital securities platform. Clearstream is the post-trading business of Deutsche Börse Group. The KfW bond has a volume of 4 billion euros with a duration of 3 years and a coupon of 2.75%.
Tim Armbruster, Treasurer at KfW, commented:
“We are pleased to successfully complete a second digital transaction, with a focus on further automating data generation and speeding up the issuance process, thereby improving scalability. We thank Deutsche Börse for the constructive cooperation in recent months. It is important for us to provide key insights from the issuer’s perspective to contribute to the further digitization of capital markets.”
Jens Hachmeister, Head of Issuer Services & New Digital Markets at Deutsche Börse, said:
“We are excited to welcome KfW’s reporting link to our D7 digital platform. This is an impressive milestone for the digitization of the German capital markets as a whole, and we are proud to be pioneers in this area. To date, D7 has processed more than 35,000 digital releases across all financial instruments, totaling approximately €3.5 billion, more than any other platform worldwide. With successful reference releases like this, D7 is proving to be the platform of choice for high-volume, large-scale digital releases.”
Thanks to its partnership with Google Cloud, Deutsche Börse further significantly optimized the D7 technology stack as part of the latest system upgrade. This allowed, for example, a further reduction in the time to market of digital securities from minutes to seconds. Traditionally, releases can take several days due to cumbersome approval processes and lack of system interoperability. Digital releases increase speed, transparency, and therefore efficiency, while reducing error-proneness and cost over the entire life cycle of securities.
This reference bond marks the second time that KfW has issued a central registry title in D7 under the German Electronic Securities Act (eWpG). KfW already completed a first pilot transaction (€20 million, duration: 2 years) in December 2022. Going forward, KfW plans to use D7 for further transactions in euros.