Capital Markets

The authorisation to take out budget loans is regulated in § 2 of the Berlin Budget Act. There, the authorisation to refinance the loans due in the respective financial year is granted and, in addition, the credit framework for the respective financial year is specified. The budget for 2023 was passed by Parliament in November 2022. The planned refinancing of maturing loans amounts to approximately 5.4 billion Euro in 2023.

Berlin is the third most active bond issuer among all single issuing German Federal States. Since the beginning of 2003 it has issued many benchmark bonds with a volume of 1 to 2 bn Euro. By issuing benchmark bonds, the State of Berlin is trying to appeal to a broader investor base, especially in Europe. Other borrowing tools are private bond placements and promissory notes (Schuldscheine).

The State of Berlin is rated by three rating agencies. Their latest ratings are AAA by FitchRatings, AAA by Scope Ratings and Aa1 by Moody’s, all three with stable outlook. These high quality ratings are based upon the stability of the German solidarity system, which emphasizes the creditworthiness of the state and guarantees the timeliness of all payments.