State of Berlin. Investor Presentation. June 2013. Page 1. Land Berlin/Thie



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State of Berlin Investor Presentation June 2013 Land Berlin/Thie This document contains neither an offer to sell securities nor an invitation to submit an offer to buy securities. The information contained herein may be completed and supplemented at any time; it does not constitute an investment recommendation nor should it serve as a basis for investment decisions. The State of Berlin assumes no responsibility or reliability for the completeness or correctness of the information contained herein. Page 1

Content Metropolis political and cultural centre, attractive business location Budget sustainable consolidation Capital markets professional treasury management Scholvien Berlin An outstanding investment opportunity Investor Presentation June 2013 Page 2

Metropolis Berlin Capital of the Federal Republic of Germany and home to the German government Largest German city with 3.5m inhabitants and 8 th largest state by inhabitants Wolfgang Scholvien Political centre with numerous organisations close to the government as well as embassies and consulates of 146 countries Wolfgang Scholvien Prime cultural and touristic location in Europe next to London and Paris Wolfgang Scholvien Investor Presentation June 2013 Page 3

Successful structural transformation Efficient cooperation between leading research institutes and the private sector Media and communications Medical- and biotechnology Environmental technology Transportation technology Important location for internationally well-known companies Investor Presentation June 2013 Page 4

Growth in real GDP After the reunification, Berlin s GDP growth has surpassed the national average for the first time in 2005 Nominal GDP increased a solid 2.4% from EUR 101.1bn in 2011 to EUR 103.6bn in 2012 In real terms the State of Berlin was less affected by the economic down-turn (-0.6%) than Germany as a whole (-5.1%) in 2009 5% 4% 3% 2% 1% 0% -1% -2% -3% -4% -5% -6% 2005 2006 2007 2008 2009 2010 2011 2012 Berlin National average Investor Presentation June 2013 Page 5

Prime infrastructure Favourable office and industrial space Unique science and research environment (four universities plus ten technical colleges and institutions of higher education with a total of more than 147,000 students) Science and technology park Berlin- Adlershof with national importance thanks to eleven independent research institutes, six science institutes of Humboldt-University, 425 technologyoriented companies The transport infrastructure of the capital belongs to the most modern and most efficient in Europe. Land Berlin/Thie Günter Steffen Berlin Partner/FTB-Werbefotografie Investor Presentation June 2013 Page 6

Revenues and Expenditures 22 574 Expenditures 21 840 21 039 21 910 22 568 21 892 20 860 20 794 19 599 17 339 Revenues 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 April 2013. Million Euros. Investor Presentation June 2013 Page 7

153 575 145 082 135 891 126 038 114 890 109 870 106 693 105 000 166 885 194 950 183 863 207 151 Public Sector Employees 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2005 2006 2007 2008 2009 2010 2011 2012 April 2013. Investor Presentation June 2013 Page 8

Expenditure Increase 2001 to 2011 Hessen Saarland Bayern Rheinland-Pfalz Nordrhein-Westfalen Schleswig-Holstein Hamburg Niedersachsen Baden-Württemberg Sachsen Brandenburg Mecklenburg-Vorp. Sachsen-Anhalt Thüringen Bremen BERLIN 2,4% 10,5% 10,2% 9,8% 8,9% 8,9% 14,6% 14,2% 17,1% 21,3% 21,1% 20,6% 24,1% 25,0% 27,9% 28,9% Average 17,9% April 2013. Investor Presentation June 2013 Page 9

Financial Restructuring Process according to Stability Law Stability Council Federal and State Ministers of Finance 1 (18) Financial Restructuring Agreement Decrease of Net Borrowing Naming the Measures Bi-yearly Reports Yearly Reports on Budget Indicators Imminent Budget Distress Evaluation Deficit per capita Net New Borrowings p.c. Debt Level p.c. Interest-Tax-Relation Threshold Values 2010 2020 April 2013. 1 including Federal Minister of Economics Investor Presentation June 2013 Page 10

Budget discipline Successful financial policy through consolidation, growth of tax revenues and reinforcement of own revenues EUR 283mn debt repayment in 2012 and no net new borrowing after 2014 Reduction of gross funding from EUR 8.3bn in 2013 to approx. EUR 6.7bn in 2016 Total debt as of Dec 31 st, 2012: EUR 61.9bn 1800 1400 1000 600 200-200 -600-1000 -964 Net New Borrowing (actual and expected results in EUR mn) 1421 1402 1159 509 485 2008 2009 2010 2011 2012 2013 2014 2015-283 -251 35 actual results budget 2012/2013; financial planning up to 2015 Investor Presentation June 2013 Page 11

- 283 1 159 1 402 Net New Borrowing: Cutback until 2015 until 2015 according to planning of the Senate German debt brake Reduction of debt level 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 April 2013. Million Euros. 2012 according to the temporary balance sheet. Investor Presentation June 2013 Page 12

Capital markets Berlin s funding strategy Maturity profile Frequent issuer with up to two benchmarks per year Extension of the existing benchmark curve Broadening of the investor base and increased investor relations Foreign currency issues with standalone documentation 35,000 30,000 25,000 20,000 15,000 10,000 5,000 mn Private placements and German domestic Schuldscheine remain important pillars of the funding strategy 0,000 up to and including 4 years longer than 4 including 7 years longer than 7 including 10 years longer than 10 years Dec.31, 2012 Investor Presentation June 2013 Page 13

Berlin An outstanding investment opportunity 0%-risk weighting in most European countries Excellent credit quality with two issuer ratings: - AAA with stable outlook by Fitch - Aa1 with negative outlook by Moody s following the outlook change for the German sovereign rating ECB eligibility Appealing yield pick-up relative to comparable government bonds Year Denotation ISIN Volume in Coupon Maturity 2004 LSA A 190 DE000A0BNQX 2.000.000.000 4,250% 15.09.2014 2005 LSA A 196 DE000A0DRH7 1.750.000.000 3,750% 23.03.2015 2005 LSA A 204 DE000A0EY7Z 1.750.000.000 3,125% 14.09.2015 2006 LSA A 214 DE000A0H5VC 1.500.000.000 4,125% 24.05.2016 2007 LSA A 226 DE000A0KAV2 1.000.000.000 4,250% 25.04.2022 2007 LSA A 230 DE000A0NKUD 1.250.000.000 4,875% 26.06.2017 2009 LSA A 264 DE000A0XYS7 1.250.000.000 3,500% 13.02.2014 2011 LSA A 336 DE000A1H3YM 1.000.000.000 3,000% 29.03.2016 2011 LSA A 340 DE000A1H3YR 1.000.000.000 2,875% 08.09.2016 2011 LSA A 352 DE000A1K0FR 1.250.000.000 3,125% 17.08.2021 Investor Presentation June 2013 Page 14

bp Secondary spread performance 120 80 40 0 11-05 11-11 12-05 12-11 13-05 -40-80 -120 BERGER 3.75% 3/15 BERGER 3.125% 8/21 BERGER 1.75% 1/17 DBR 3.75% 1/17-160 DBR 2.25% 9/21 iboxx Sub-Sovereigns 3-5 iboxx Sub-Sovereigns 5-7 OBL 1.75% 10/15 Berlin offers an attractive yield pick-up vs. Bunds while trading less volatile than European peers Investor Presentation June 2013 Page 15

Your contacts in Berlin Susanne Reichenbach Head of Treasury Tel.: ++49-30 - 9020 4185 E-Mail: Susanne.Reichenbach@senfin.berlin.de Elke Badack-Hebig Senior funding manager Tel.: ++49-30 - 9020 4187 E-Mail: Elke.Badack-Hebig@senfin.berlin.de Mirko Voit Senior funding manager Tel.: ++49-30 - 9020 4188 E-Mail: Mirko.Voit@senfin.berlin.de Wolfgang Scholvien Internet: www.berlin.de/sen/finanzen/vermoegen/geld-und-kreditgeschaeft/artikel.13670.php Investor Presentation June 2013 Page 16

City campaign be Berlin! Our city is full of life it s creative, ener-getic and cutting-edge. This city attracts people from all over the world. In an environment of unparalleled diversity, it captures the attitudes and lifestyles of people from over 180 nations and really makes the city by the Spree the place to be. 2008 Berlin Partner GmbH Investor Presentation June 2013 Page 17