KfW, the German state development agency, will launch a €5bn ($4.25bn) global bond issue in July.

The deal is the second part of a bond issuing programme that KfW established earlier this year to provide a series of liquid benchmarks that offer investors a higher-yielding alternative to government bonds. The deal will have a five-year maturity. The lead managers are Dresdner Kleinwort Wasserstein, Goldman Sachs and Morgan Stanley.