Funding

Market access remains excellent

Our strong credit ratings and the special regulatory status of our bonds resulting from the federal government’s guarantee allow us to maintain excellent market access across all maturities.

Measured by the margin over 6-month Euribor, our funding costs were higher than in the previous year. This increase resulted from the general rise in credit spreads triggered by the higher issuance volumes of state issuers in Europe and the ECB’s reduction of its bond holdings. We were still able to raise short-term liquidity with maturities of less than one year at the level of €STR swap rates through our Euro Commercial Paper Programme (ECP Programme).

Issuance volume increased

We raised EUR 10.9 billion (2024: EUR 8.2 billion) in funds with maturities of more than two years in the capital markets in the past financial year. The funds were raised by the following funding instruments:

Medium- and long-term issuance volume (maturities of more than two years)	bEUR 2025	bEUR 2024	Share (%) 2025	Share (%) 2024
EMTN	7.6	6.2	69.8	75.5
of which: Green Bonds	1.0	0.0	9.2	0.0
Global bonds	2.6	1.4	24.0	17.0
AUD-MTN	0.6	0.6	5.7	7.5
Domestic capital market instruments	0.1	0.0	0.6	0.0
Total	10.9	8.2	100.00	100.00

EMTN programme remains highly significant

The Euro Medium-Term Note Programme (EMTN programme) is our most important funding instrument with a programme volume of EUR 70billion. At the end of 2025 programme utilisation stood at EUR 59.3 billion (2024: EUR 56.6 billion). Using standardised documentation, we can issue securities in many currencies and with different amounts, maturities and structures under the EMTN Programme. In the reporting year we used the programme exclusively to raise medium- and long-term funding. We issued a euro benchmark bond with a volume of EUR 1.25 billion and a maturity of 7.25 years as well as a seven-year Green Bond with a volume of EUR 1 billion.

Medium- and long-term EMTN Issues

Successful US dollar global bonds

Global bonds registered with the US Securities and Exchange Commission (SEC) play an important role in our funding activities. The registration under “Schedule B” gives us access to the US market. This registration is only granted to sovereign states and quasi-sovereign issuers, underscoring our “agency” status in the international capital market. We issued two five-year global bonds for US 1.5 billion each in the reporting year. The issuance launched in May attracted a record order book of more than USD 10 billion.

Issuance of global bonds

Unchanged issuance volume in the “kangaroo” market

In 2025 we issued bonds in the nominal amount of AUD 1.1 billion under our AUD MTN Programme, equivalent to EUR 0.6 billion.

Rentenbank had an outstanding bond volume of AUD 7.1 billion at the end of the year.

Lower average utilisation of the ECP Programme

Issuances from our EUR 20 billion ECP Programme continue to be of major importance for short-term funding. These are bearer notes maturing in less than one year, which are usually issued in discounted form, meaning without interest coupons. The average annual programme utilisation was EUR 8.5 billion in 2025 (2024: EUR 10.9 billion). The programme utilisation at the end of the year was EUR 3.7 billion (2024: EUR 8.5 billion).

Zero risk weighting for Rentenbank bonds

Based on the Credit Risk Standardised Approach of the Capital Requirements Regulation (CRR), EU banks do not need to allocate capital to back their exposures to Rentenbank. The zero risk weight resulting from the federal government’s guarantee is also recognised in many countries outside the EU, for example the United Kingdom, Norway, Switzerland, the United States, Canada, Australia, and New Zealand.

Banks were again the most important investor group

In the reporting year, the share of our medium and long-term issue volume placed with banks was 49% (55%). This group of buyers purchases the highest-rated zero-weight notes offering attractive spreads, which are recognised as liquid assets. In addition, central banks and other government agencies purchased a significant percentage of these funding instruments. In 2025, this percentage declined to 31% (2024: 35%), while the share of German investors rose to 23% (2024: 21%). We placed 49% (40%) of our bonds with other European investors. Demand from Asian investors was below the previous year’s level at 18% (21%). The share of US investors declined to 6% (11%). A further 3% (5%) of our issues were placed in the Middle East and Africa, and 1% (2%) in Australia and New Zealand.

Breakdown by region of medium and long-term issues in 2025

The Euro was the most important issue currency

In the reporting year our medium and long-term issuance volume was divided among seven currencies. The Euro remained the most important issuance currency at 49% (55%), followed by the US dollar, whose share declined to 29% (32%). Sterling ranked third at 8% (6%). The Swiss franc accounted for 6% and the Australian dollar for 5%. The remaining 3% was denominated in Norwegian and Swedish kroner.

Medium- and long-term issues volume in 2025 by currency

Rentenbank issuances are classified as “liquid assets” …

In the European Union, the bonds of promotional banks are classified as “liquid assets” for purposes of bank regulatory reporting pursuant to the CRR. Thanks to the German Federal Republic’s guarantee, our bonds fulfil the regulatory requirements of “Level 1 assets” in the EU. The same applies in some countries outside of the EU.

… and recognised as eligible collateral

Our euro-denominated exchange-listed issuances meet the requirements of the European System of Central Banks (ESCB) to qualify as Category I collateral. Our bonds are classified as belonging to Liquidity Category II. Only the bonds of central banks and sovereign states are assigned to the higher Category I. Liquidity Category II includes the bonds of supranational institutions and the issuances of institutions with a public promotional mandate. Moreover, the Reserve Bank of Australia recognises our “kangaroo bonds” and the Reserve Bank of New Zealand our “kauri bonds” as eligible collateral. Our issuances also enjoy a preferential status in the private repo markets. For example, Eurex Clearing AG accepts our securities as collateral for the “GC Pooling ECB Basket”.

Money market operations

We use a wide range of instruments to refinance short-term assets, manage liquidity and hedge short-term interest rate risk. Funding can be raised through the ECP and EMTN programmes, overnight and term deposits in the interbank market, reverse repos under Eurex GC Pooling, and refinancing facilities provided by the ECB. We also manage interest rate risk using derivatives.

Derivatives to hedge market price risks

To hedge interest rate and currency risks, we entered into swaps amounting to EUR 24.2 billion in the past financial year (2024: EUR 16.9 billion). Of this total, EUR 18.5 billion (2024: EUR 13.2 billion) consisted of interest rate swaps and EUR 5.7 billion (2024: EUR 3.7 billion) consisted of cross-currency interest rate swaps. We also hedged our foreign currency ECP issuances with currency swaps (FX swaps).

We only use derivatives as hedging instruments for existing or foreseeable market price risks. We limit counterparty credit risk of the derivatives we employ by means of collateral agreements with all swap counterparties.

Rentenbank remains classified as a non-trading book institution

Rentenbank does not keep a trading book according to the definition of the German Banking Act (Kreditwesengesetz; KWG) and Article 4 (1) number 86 CRR. We therefore classified our bank as a non-trading book institution and notified this classification to the BaFin and the Bundesbank already in 1998. We still do not hold any positions with trading intent according to Article 4 (1) number 85 CRR. We assign all transactions to the banking book.