Kein Folientitel

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Reinhard PlatzerCEO Dexia Kommunalkredit Bank

Access to long term money enabling environment
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CEEC the market with the highest growth rates
in Europe

Higher growth rates lead to increasing standards
of living
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High investments in CEEC but lack of public
resources

• EUR 110 bn. to achieve compliance with EC
  Directives ("acquis")
• EUR 515 bn. investment needs to reach EU-15
  average infrastructure standard

• CEEC have to fulfil the Maastricht criteria to
  reach the EURO but suffer underhigh public
  deficits (i.e. Czech Republic 12.6 of GDP in
  2003)
• EUR 22 bn. EU funds available for 2004-2006
  (approx. EUR 48 bn 2007-2013) but the have to be
  co-financed (i.e. app. EUR 1.5 bn. annual
  EU-funds are expected forSlovakia, annual tax
  income available EUR 5.5 bn.)

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Long term investments need access to long term
money
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Dexia Kommunalkredit Bank the new specialist
bank for public finance offers access to long
term money

• Dexia Kommunalkredit Bank (Dexia-Kom) was
  established in order to con-centrate and
  strengthen the activities of Dexia and
  Kommunalkredit in CEE
• Dexia Crédit Local is the world leading provider
  of finance for public infrastructure projects
• Kommunalkredit is Austria's number one in public
  finance

• Provision of long-term financing solutions to
  public authorities and public enterprises
• Development of financing solutions adopted to
  local environment and needs of the customers in
  CEECs (e.g. Maastricht-neutral financing
  solutions)

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Dexia Kommunalkredit BankThe owners
Dexia Crédit Local (Figures per 31.12.2003)
Total Assets EUR 174.2 bln Return on Equity
16.4 Staff 3,082
Kommunalkredit Austria (Preliminary figures per
31.12.2004) Total Assets EUR 14.2 bln Return
on Equity 17.2 Staff 228
Dexia Crédit Local 50.84
Kommunalkredit 49.16
Long-term ratings
Moodys
Fitch Ratings
Standard Poor's
AA-
Aa3
Kommunalkredit
AA
Dexia Crédit Local
AA
Aa2
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The company structure
Dexia Crédit Local, Paris (F)
Kommunalkredit Austria AG, Vienna (A)
49,16
50, 84
Dexia Kommunalkredit Bank AG (act. Holding
AG) Vienna (A)
78,98
100
100
Dexia banka Slovensko a.s., Zilina (SK)
Dexia Kommunalkredit Polska sp. z o.o.,
Warsaw (PL)
Kommunalkredit Finance a.s., Prague (CZ)
Bulgaria (1st term of 2005)
Romania (1st term of 2005)
Hungary (2nd term of 2005)
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The role of specialized banks

• Provision of long-term public finance solutions
• (duration up to 25 years and grace periods
  available)
• Concentration on specialized knowledge and high
  product quality
• Offering complementary services
• (management of public funding schemes/consulting
  activities)
• High flexibility and customer-oriented service
• Cost-saving structures
• Advantages in refinancing (Basel II)

Tailor-made financing solutions
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Our Business Fields for our Clients
Infrastructure
Health
Public Finance CEE

• Our Clients
• Public-owned enterprises
• Utilities and suppliers of the public sector

• Our Clients
• Municipalities
• Regions
• Sovereigns

Education, Culture
Social housing
Public construction
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The market
15 countries with 136 mln inhabitants
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Improving creditworthiness of local authorities
in CEEMoody's sovereign ratings long term,
foreign currency(before November 12,
2002/current)
Baa1/A1
Baa2/A2
Ba1/A3
Baa1/A2
Baa1/A1
Baa3/A2
Aaa/Aaa
Baa1/A1
A3/Aa3
B3/Ba3
Baa3/Baa3
B2/Ba1
Slovakia has recently been upgraded
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Spreads are getting narrower
Spreads in municipal financing stand at about 200
BP in Bulgaria and Romania and at about 40 BP in
the new EU-member-countries
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Our products and services
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Loans

• Budget financing
• 1. Short- and long-term budget financing
• 2. Bridge financing (e.g. EU funds)
• Infrastructure financing (e.g. community centers,
  schools, roads etc.)

Innovative financing solutions

• Restructuring
• Project finance (including public-private
  partnerships)
• Leasing
• Factoring
• Structured products
• Access to local and international funds (EIB and
  EBRD)

Products are adapted to local requirements
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Our products and services
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Bond issues

• Stand alone fixed/floating rate
• EMTN debt issuance programs
• Private placements (plain vanilla structured)

Securitisation

• Providing integrated solutions advisory on
  feasibility, portfolio analysis and data review
  structuring and pricing, negotiating with
  regulatory authorities and rating agencies

Credit enhancement

• Active in the municipal bond enhancement through
  FSA

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Innovative financing solutions The Austrian
Maastricht Project Sale of soft loans
Spin-offs through "Businesses with market
operation"

• has to cover a minimum of 50 of the expenses
  through fees/income and not from the budget of
  the municipality
• the business must have its own reporting system
• the business must have a large degree of
  decision-making autonomy in the exercise of its
  main functions

Reduction of public debt by 2 of GDP Annual
effect on Maastricht deficit 0.3 of GDP

• Detailed knowledge of cost structure
• Possibility of benchmarking

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Innovative financing solutions The Austrian
Maastricht Project Sale of soft loans
1996-2004 Environmental and Water Management
Fund
Nominal value EUR 5,208 million
Proceeds EUR 3,472 million
Kommunalkredit stake EUR 1,107 million
2001-2004 Housing Loans Upper Austria,
Carinthia, Styria
Nominal value EUR 5,735 million
Proceeds EUR 3,188 million
Kommunalkredit stake EUR 2,361 million

• Annual public deficit is reduced by approx.
  EUR 200 million

• Reduction of public debt by 3.0 of GDP

• Interest income is used to finance new
  infrastructure investments

2004 first German transaction by the City of
Hamburg, Volume EUR 740 mln.
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Innovative financing solutions Structure products
2

• Financing new investments and/or debt
  rescheduling (longer maturities)
• Financial benefits can be realised through the
  use of derivatives, compared with standard
  solutions (Euribor-Minus condition possible)
• Products tailored to the customer's needs
  (example City of Gdansk)

Low interest rates (lt 2) linked to Swiss franc
without foreign exchange risk for CEECs
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Innovative financing solutions Public Private
Partnerships
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PPP leads to a new understanding of duties of
the public sector

• ? PPP means, that the public sector
• Has not any more to fulfil all tasks by himself
• Public sector has to secure that the tasks are
  fulfilled either by the public sector or by the
  private sector
• But he must not cede his responsibility ? there
  have been negative experiences where the public
  sector has backed out completely

Public sector should choose the most efficient
solution
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Innovative financing solutions Public Private
Partnerships
Tasks of the public sector

• Definition of strategic goals and legal framework
  (degree of supply, division of tasks, location,
  regional emphasis)
• Choice of partner (public or private)
• Controlling and evaluation of the services
• Public sector could optimize financing structure
  through a public guarantee (Eurostat defines
  guarantees as contingent liabilities Maastricht
  neutral)

Cooperation with private partner over PPP
enables "off-balance" financing Maastricht
debt and deficit are not affected
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Innovative financing solutions Sale of
emission-reduction-units
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Kommunalkredit Manager of the Austrian
JI/CDMProgram
Target of the Austrian JI/CDM-Programme

• Contribution to the Austrian Kyoto-Target through
  the purchase of emission-reduction-units of
  JI/CDM-Projects (3 to 5 mil. t CO2-equivalent per
  year)
• Funds available EUR 72 Mio. until 2006
• Average prices EUR 4,- until EUR 6,- per ton

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Innovative financing solutions Sale of
emission-reduction-units

• Investment-volume EUR 190 mln.
• Construction of a new power-plant and
  rehabilitation of existing Vacha Kaskade
• Improvement of efficiency
• Potential for reduction of greenhouse gases
  228.000t CO2 p.a.

App. 1 mln. ton were bought
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Conclusion
High investment needs lead to high growth rates
and standards of living
National and EU funds are not sufficient to
finance future growth
CEECs need access to long term money
Specialist banks offer innovative and Maastricht
neutral financing solutions
Dexia Kommunalkredit Bank is your strong partner
in CEE
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• CONTACT LIST

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Contact List
Phone
43-1-31 6 31-
Chief Executive Officer
Reinhard Platzer
100
Member of the Executive Board
Pascal Becker
300
Member of the Executive Board
Leopold Fischer
520
Member of the Executive Board
Claudia Schmied
200
Fax
Dexia Kommunalkredit Bank, Tuerkenstrasse 9, 1092
Vienna
500
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Contact ListSubsidiaries
Phone
Jacek Rynski
48-22- 6543584
Chief Executive Officer Dexia Kommunalkredit
Polska (Poland)
Pavol Durinik
421-415621-091
Member of the Executive Board Dexia banka
Slovensko (Slovakia)
Richard Paulik
420-221146-314
Chief Executive Officer Kommunalkredit Finance
(Czech Republic)
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www.dexia-kom.com