Ever since the banking industry began to implode last September, US bond investors have regarded five-year paper as a step too far into an uncertain future. But one of the world's classiest issuers has now tempted them back into this neglected part of the curve. Germany's Kreditanstalt für Wiederaufbau (KfW) comfortably pulled off a $4bn five-year issue in March, though it had to price the deal at the generous end of guidance, Bundesrepublik guarantee notwithstanding.
The agency has a well-publicised three-pillar funding strategy, consisting of global benchmark euro and US dollar capital market issues, other underwritten and targeted public transactions, and private placements. In recent years it has seen the benchmarks' share of the total increase, from 35% in 2004 to more than 50% last year. Other public transactions have shrunk from 45% to 37% and private placements from 20% to 12%.
