Bond markets hold no fear for top tier borrowers

If any set of borrowers has an access all areas pass to the capital markets party, it is Germany’s public sector credits. The Bund remains Europe’s de facto benchmark security and, along with the agencies that the federal republic also guarantees, is enjoying a period of sustained low yields and tight spreads. None of that looks set to change as the number of triple-A ratings around the globe dwindles. But that is not to say that German public sector funding officials can put their feet up and watch the cash roll in. KfW continues to help develop new markets, such as the offshore renminbi market, while the German Finance Agency has a new head, Tammo Diemer, who is taking over at a time when German finances are at the heart of Europe’s economic health. Diemer and KfW’s Frank Czichowski, along with senior capital markets bankers, joined EuroWeek in mid-March to discuss the German public sector bond markets.