A4 für Copyshop GB.indd - Bayerische Landesbank

In January, the Bank started out in the jumbo benchmark bonds segment, issuing a
ten-year EUR 1.5 billion bond. This was followed by a seven-year issue with a total vol-
ume of EUR 1 billion in May. Both transactions were underwritten by an international
banking syndicate and placed in domestic and foreign markets. BayernLB increased
one of its outstanding jumbo pfandbriefe by EUR 250 million. The Bank was also active
in the foreign currency markets, issuing a number of jumbo bonds. These included a
seven-year CHF 500 million fixed-rate bond and a three-year “kangaroo bond” with a
total volume of AUD 325 million in the Australian domestic market. The Bank was once
again active in the Japanese domestic market, issuing a Uridashi bond totalling AUD
414 million. Two extendible notes were issued for the first time in the US market, rep-
resenting a total volume of USD 3 billion.
Short-term interest rate products, foreign exchange, interest rate,
energy and commodity derivatives
In the face of volatile markets with dramatic interest rate fluctuations in the long-term
segment, coupled with erratic oil prices and the increased price of gold, our target cus-
tomers were increasingly in need of comprehensive solutions. This demand was met by
concepts designed to fulfil our customers’ need for high yields, while attending to
financial, balance sheet structure and energy price management.
The increased volatility of exchange rates boosted business activity considerably. In cli-
ent-driven business, especially with corporate customers, there was increased demand
for currency risk hedging. This was particularly the case for shorter durations. Eastern
European currencies are becoming increasingly important. In interbank foreign
exchange trading, BayernLB maintained a strong position in spite of changed market
conditions.
The shift from unsecured to secured short-term interest rate products was continued
successfully in 2004. The use of collateral for short-term interest rate products was
optimised by means of targeted collateral trading, special repo instruments (e.g. tri-
party repos) and bank-wide participation in the general collateral pooling project.
Corporate customers have a strong liquidity base. For this reason, they are increasingly
turning to CP investment, and show particular interest in ABS CP-programmes.
Equity markets
Consolidation in the international equity markets was the hot topic of 2004. Following
an encouraging start, growth expectations were brought to a sudden halt by turmoil in
the commodity markets. Growth was curbed especially by the increase in oil prices. In
the second half of the year, major fluctuations on the foreign exchange markets led
investors to flee to the bond markets. It was only in mid-November that the markets
began to rebound.
BayernLB – our company
} BayernLB also
reports success in
foreign currency
markets
} Collateral use
optimised
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