WEHLERT This has definitely been a special year. When we started the year, we didn’t know there would be such an increase in rates – investors as well as issuers have had to adjust to the new environment. We are keeping a close eye on the market, monitoring headline risk every day.

We are looking for issuance windows around central bank decisions. We have to find places where we can issue our bonds in a relatively stable environment. This is the biggest challenge for issuers with a high funding volume, like KfW Bankengruppe: our funding volume for this year is around €90 billion (US$92.9 billion).

Early in the year, we decided to pre-fund more than we usually do. The idea was to have more certainty as well as the luxury of waiting a little if we experienced really volatile times.

Overall, our range for benchmark bonds is €3-5 billion. At the beginning of the year, we were able to issue €5 billion, whereas toward the end of the year we are at the lower end of the range. We adjust strategy to the current situation in the market – we don’t want to oversupply the market and we want to make sure our bonds are well-placed. We have also done more taps this year than we usually do: for example, we have done 25 taps to our euro benchmark bonds to ensure liquidity. We have also had closer direct dialogue with investors this year – in addition to what we usually do in conjunction with our syndicate banks.

We funded more in euros than we had planned, and less in US dollars. Duration-wise, we are similar to previous years. KfW has never been a big issuer at the long end and we have definitely seen more demand at the shorter end – which is not surprising in a volatile environment with rising rates.

KETTING It has been a challenging year indeed. Our funding programme and approach to markets have not been that different from previous years, though. One of our core strengths has always been to act and move quickly when we see good windows or opportunities.

We have had a successful run with all benchmarks issued and we have tried to limit execution risk while offering investors more liquidity by increasing outstanding benchmarks. This has proven to be a successful strategy. We are committed to maintaining a benchmark yield curve in euros and US dollars, and we diversify across currencies in order to maintain flexibility and optimise the cost of our funding.

ROSOLOWSKA The central feature of most markets this year has been extraordinary volatility linked to the unwinding of accommodative monetary policy, geopolitics and the ramifications of the Russian invasion of Ukraine. This has made execution of transactions more challenging and we have had to navigate around this volatility in order to de-risk execution.

Having said this, our approach has not changed that much. Our funding programme, of €45 billion for this year, is lower than it has been for several years. We raise around one-half in euros and one-third in US dollars, mostly via benchmark transactions of 3-5 billion in size. Australian dollars has been our third-largest issuance currency for some years now.

We strive to refresh curves in the two main currencies across maturities in each funding year. With a manageable funding programme, transactions did not require printing toward the upper end of the size range.

Overall, issuers have had to navigate increased execution risk and decreased visibility from investors. However, we have not had to introduce any major shifts strategically or tactically, and have not spied any big new trends when it comes to investor distribution, maturity profile or the currency breakdown of our funding.

KOTAMRAJU Our 2022 funding programme is about US$35 billion, similar in size to last year. Our approach has been consistent as well – we seek to diversify our funding sources and issue across a broad range of currencies. We maintain a consistent presence in markets such as US, Australian and New Zealand dollars, sterling and euros. Australian and New Zealand dollars continue to be important markets for us and are in our top five issuance currencies. We have issued in more than 20 currencies, again similar to last year.

Despite the volatility, it has been a constructive year for us from a funding perspective. This said, volatility affects liquidity and the execution of transactions. We needed to be nimble in identifying issuance windows and implementing our programme.

BRUSAS I agree it has been a turbulent year. However, this hasn’t required Nordic Investment Bank to compromise its usual funding strategy. In fact, this year we have done more funding than we anticipated. We will end up with closer to US$9 billion as opposed to our US$7.5-8 billion target at the beginning of the year. This is due to greater demand for our lending.

We have been able to adjust to the situation and carry out our normal strategy. Being a smaller issuer has its benefits. When only targeting two US dollar benchmarks in the size of US$1-1.25 billion, it gives more options to choose issuance windows.

In addition to the US benchmarks and a €500 million green bond, we have been able to fill the funding plan by diversifying into other strategic markets like the Nordic, sterling and Australian dollar markets, and also by issuing quite a few private placement transactions in a variety of currencies This means the volatility has not had a big impact on the way we are thinking. We are also reaching an adequate, normal maturity of funding.

FAN Indeed, it has been a challenging market environment this year. We have not changed our funding strategy but we have adjusted the execution modality, especially in US dollars. As this is our core currency, we continued with the strategy of building a US dollar global benchmark curve with issuance in two-, five- and seven-year maturities this year. We also continued to focus on our strategic markets with issuance in sterling, and Australian and New Zealand dollars.

Our funding strategy also continued to take into consideration investor demand when timing bond issuance. For example, investors were increasingly focused on the shorter end of the US dollar curve given the market volatility and inverted yield curve. We typically don’t issue two-year bonds but, due to liability management considerations – as we had a peak in three-year maturities and a dip in the two-year bucket – we were able to issue a US$2 billion two-year bond in June to meet investor preferences.

What has changed – and this has been relevant over the past several years – is the execution modality, specifically the need to be nimble and quick. When we spot an issuance window, we have to jump right in. We did this in September. We saw a good window for a seven-year US dollar transaction at a fair market price. We ended up doing a US$3 billion deal that was larger than expected and very well received.

DORE Our overall funding strategy has remained largely unchanged. We continue to focus on diversifying our sources of funding across currencies and products. We have continued our extensive investor outreach to ensure we are responding appropriately to investor demand and preferences.
In our past fiscal year, we raised just more than US$40 billion for IBRD [International Bank for Reconstruction and Development] and about US$10 billion for IDA [International Development Association].

Increased market volatility has resulted in fewer good issuance windows and required much faster response times to take advantage of the ones that emerged. There has also been increased headline risk as certain economic data that never affected the market in the past are now having meaningful impact. As such, we now must consider a broader set of data releases when making decisions about optimal windows.