S&P affirms KfW

Standard & Poor's said it affirmed the AAA long-term and A-1+ short-term issuer credit ratings on KfW on guarantees from the Federal Republic of Germany (AAA/stable/A-1+).

The outlook is stable.

Based on financial accounts, S&P said the heavy costs KfW incurred by providing risk protection for IKB Deutsche Industriebank AG (not rated) overshadowed its positive operating results.

KfW has written off 90% of the credit lines granted to IKB and off-balance sheet conduit Rhineland Finance, leading to the first negative result in KfW's 60-year history. At the same time, KfW's chief executive officer Ingrid Matthäus-Maier stepped down.

Neither IKB's losses nor the resignation has any bearing on KfW's creditworthiness, the agency said, since its liabilities remain backed by an explicit federal government guarantee.

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