April marks a surprising anniversary – 10 years since KfW sold any shares in Deutsche Telekom. Since 1997, the development bank has been in charge of selling the German state’s shares in Deutsche Telekom and Deutsche Post. Yet even as equity markets have gained ground in recent years, the jumbo equity sales for which KfW is known have been absent. As an entity independent of the state it has been able to focus on providing the best return for the taxpayer, free from political pressure to sell at

Of all the problems presently facing Germany, it is unlikely that a stuttering equity capital market is getting much attention versus the challenges of welcoming hundreds of thousands of refugees. Yet it is a worry that Europe’s largest economy is struggling to support companies’ growth through transition from the private to public market. Just one company has completed an IPO of over US$50m on the German exchange in 2016 – wind turbine company Senvion. And it was not an easy path to pricing, wi

Corporate Schuldschein volume in the first quarter reached €7.7bn, the third highest quarterly volume ever, according to Thomson Reuters LPC data. The total is already well on its way to top the €20bn seen in 2015. “The acceptance of the product by both issuers and investors has increased, with an increase in clients using Schuldschein to take out M&A debt, while there has been a window of opportunity where often even rated issuers can get more attractive pricing compared to other capital ma

Germany took the market by surprise when it raced ahead last year with a proposal to subordinate senior unsecured debt in the insolvency of its banks. For all its simplicity, other countries have not followed suit, creating a patchwork of different bail-in regimes across Europe that is proving a nightmare for investors wanting to invest in the region’s bank debt. Germany passed the Resolution Mechanism Act in November 2015, subordinating senior unsecured bonds to deposits and derivatives but kee

With Europe’s economy wallowing in a prolonged low growth, low inflation cycle, it was no major surprise to bond market practitioners when the European Central Bank announced in March another round of attempts to stimulate the eurozone towards its 2% inflation target. What was more of a surprise, however, was the extension of the central bank’s Asset Purchase Programme (APP) to include corporate bonds. On March 10, the ECB announced that it was lowering deposit rates further into negative territ

For Volkswagen, the full implications of the NOx emissions scandal, which broke in September 2015, are yet to be fully ascertained. The US is still calculating its fine, while the manufacturer is still developing its software fix. Recent figures show VW Europe’s quarterly market share has hit a five-year low. Yet observers point out things could be considerably worse. Christian Stadler, a professor of strategic management at Warwick Business School, said: “That the VW brand has been hit more tha

KfW, one of the public sector market’s largest and most liquid borrowers, was faced with a particularly daunting task this year. The state-guaranteed development bank has seen its borrowing needs shoot up in a year when macroeconomic headwinds, political disruptions and hefty monetary policy measures are all pulling the market this way and that. So far, the issuer has forged ahead with the programme, helped initially by a flight-to-quality bid and later by additional stimulus measures announced

German banks should be in a sweet spot right now: funding costs are at an all-time low, and the home market – the world’s third largest economy – is growing at a decent clip; demand for exports has pushed the trade surplus to a record high, helping generate jobs and push unemployment to the lowest since reunification; consumers are spending again, and the property market in many of the country’s biggest cities is booming. But, despite the strong macroeconomic backdrop, and almost eight years on