Emphasis on benchmark bonds in euros and US dollars
The German development agency for agribusiness and rural areas intends to raise up to 50% of its medium-term and long-term funding volume by issuing benchmark bonds denominated in euros and US dollars. On this subject, Rentenbank Chairwoman Nikola Steinbock said: “We plan to float another euro issue under the ICMA Green Bond Framework in 2025 because we anticipate a higher volume of special promotional loans to be granted in the Renewable Energy line due to the normalisation of the EU reference interest rate. This will make it possible to float such an issue again.” The strategic issues will be supplemented by other liquid issues and private placements in various currencies.
Change in commissioned rating agencies
Beginning in January 2025, Rentenbank will obtain solicited ratings from the rating agencies S&P, Fitch, and SCOPE (previously S&P, Fitch, and Moody’s). All three of these agencies have assigned a triple-A rating to Rentenbank.
Euro was the most important issue currency in 2024
Rentenbank has raised approximately EUR 8.2 billion in the capital markets so far in the current year, including a Rentenbank euro benchmark bond with a volume of EUR 1.25 billion and a term of 7 years. It also issued a US dollar benchmark bond with a volume of US$ 1.5 billion and a five-year term and a Eurodollar bond with a volume of US$ 950 million and a seven-year term. The average term of the bank’s issues narrowed to 6.4 years (2023: 8.4 years).
Rentenbank raised funds in four currencies in 2024 (2023: three currencies). The percentage of euro issues was 55%, below the level of the previous year (2023: 66%). By contrast, the percentage of US dollar issues was higher, at 32% (2023: 27%) and the percentage of issues denominated in Australian dollars was likewise higher, at 8% (2023: 7%). Bond issues denominated in British pounds accounted for 5% of total issues.
Euro was the dominant currency in the ECP Programme
Under its Euro Commercial Paper Programme (ECP Programme), Rentenbank issued bonds with terms of up to 364 days in eight different currencies. The most important issue currency in the ECP Programme was the euro, which accounted for 78% of the total issue volume. The average utilisation of the ECP Programme was EUR 11 billion (2023: EUR 10.2 billion).
About Rentenbank:
Landwirtschaftliche Rentenbank is Germany’s development agency for agribusiness and rural areas. Its promotional mandate covers not only agriculture and forestry, but also the entire food value chain, the increased use of energy from renewable sources, and the promotion of bio-economy solutions. Rentenbank attaches particular importance to the promotion of innovation, including research and development in universities, the early-stage financing of agriculture-related start-ups, and the market introduction and practical use of new technologies and products. Rentenbank’s promotional instruments are subsidies and special promotional loans. The special promotional loans are granted via the local banks of the ultimate borrowers on a competitively neutral basis. Rentenbank provides funding to banks, savings banks, and local authorities operating in rural areas. The Bank is a federal institution under public law whose capital stock was formed by contributions from the German agriculture and forestry sectors. It is subject to the German Banking Act (KWG) and is regulated by the Federal Financial Supervisory Authority (BaFin) and the Bundesbank. Rentenbank raises funds in the capital markets as one of the few triple-A rated institutions in Germany.
This press release contains certain forward-looking statements that are based on current expectations, estimates, assumptions and projections of the Management Board and on the information currently available to it. These statements particularly include statements about our plans, business strategies and prospects. Such forward-looking statements are identified by words such as ‘expects’, ‘anticipates’, ‘intends’, ‘plans’, ‘believes’, ‘seeks’, ‘estimates’ and similar expressions. These statements are not to be understood as guarantees of future performance; instead, they are dependent on factors that involve risks and uncertainties and are based on assumptions that may prove to be incorrect. Except where required by law, we assume no obligation to update forward-looking statements after the publication of the present press release.
