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Landwirtschaftliche Rentenbank – ‘424B2’ on 4/10/03

On:  Thursday, 4/10/03, at 2:45pm ET   ·   Accession #:  1208646-3-58   ·   File #:  333-98953

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 1: 424B2       Prospectus                                           137    670K 

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PROSPECTUS SUPPLEMENT                                                           
(To prospectus dated September 18, 2002)                                        

[Rentenbank Logo] 

$1,000,000,000

LANDWIRTSCHAFTLICHE RENTENBANK

3.25% NOTES DUE 2008

----------------------------- 

Interest payable on June 16 and December 16 

----------------------------- 

 This supplement relates to the offering by us of $1,000,000,000 of notes.
This supplement does not contain complete information about the offering of the 
notes. Additional information is contained in the accompanying prospectus. The  
notes may be redeemed prior to maturity under certain circumstances as          
described in the prospectus supplement.                                         

 The notes are not redeemable at any time prior to maturity, except (1) at
our option in the case of certain changes in the tax laws of the Federal        
Republic of Germany and (2) at the holder's option in the case of certain       
changes related to the backing of our obligations by the Federal Republic. See  
the sections entitled "-- Redemption for Tax Reasons" and "-- Redemption at     
Holder's Option" under "Description of the Notes".                              

 Under our governing law, the notes will be effectively backed by the full
faith and credit of the Federal Republic. See "Responsibility of the Federal    
Republic for Rentenbank" in the accompanying prospectus.                        

Application has been made to list the notes on the Luxembourg Stock     
Exchange.                                                                       

----------------------------- 

PRICE 99.668% AND ACCRUED INTEREST, IF ANY

----------------------------- 

                                                                [Download Table]

                            UNDERWRITING DISCOUNTS AND                        
           PRICE TO PUBLIC          COMMISSIONS         PROCEEDS TO RENTENBANK
                                                                              

Per Note       99.668%                 0.10%                    99.568%       
Total        $996,680,000           $1,000,000               $995,680,000     


   The Securities and Exchange Commission and state securities regulators have
not approved or disapproved these securities, or determined if this prospectus  
supplement and prospectus is truthful or complete. Any representation to the    
contrary is a criminal offense.                                                 

The underwriters expect to deliver the notes to purchasers in book-entry
form through The Depository Trust Company and its participants, including       
Euroclear and Clearstream Banking, on April 15, 2003.                           

Joint Bookrunners   

ABN AMRO                       LEHMAN BROTHERS                       UBS WARBURG

The date of this prospectus supplement is April 8, 2003                         

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 TABLE OF CONTENTS

PROSPECTUS SUPPLEMENT 

                                                                [Download Table]
                                         
                                     PAGE
Where You Can Find More Information   S-3
Presentation of Financial Data.....   S-3
Forward-looking Statements.........   S-4
Recent Developments................   S-4
Use of Proceeds....................   S-9
Exchange Rate Information..........   S-9
Description of The Notes...........  S-10
Underwriting.......................  S-14
Validity of The Notes..............  S-16
General Information................  S-17


PROSPECTUS

                                                                [Download Table]
                                                          
Presentation of Financial Data.......................    3
About this Prospectus................................    3
Prospectus Summary...................................    4
Recent Developments..................................    7
Use of Proceeds......................................   10
Exchange Rate Information............................   10
Capitalization.......................................   11
Business.............................................   13
Management's Report..................................   22
Management...........................................   29
Employees............................................   32
Supervision and Regulation...........................   33
Debt Record..........................................   37
Description of The Securities........................   38
Responsibility of the Federal Republic for Rentenbank   43
German Taxation......................................   44
United States Taxation...............................   46
Plan of Distribution.................................   56
Validity of the Securities...........................   57
Limitations on Actions against the Federal Republic..   58
Enforcement of Civil Liabilities against Rentenbank..   58
Authorized Representative in the United States.......   58
Official Statements and Documents....................   58
Further Information..................................   58
Index to Financial Statements........................  F-1
The Federal Republic Of Germany......................  G-1


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 WHERE YOU CAN FIND MORE INFORMATION

This prospectus supplement should be read together with the accompanying
prospectus dated September 18, 2002, which contains information regarding       
Rentenbank and other matters, including a description of the terms of the notes 
being offered. Further information concerning Rentenbank, the Federal Republic  
of Germany and the notes may be found in the registration statement             
(registration no. 333-98953) and its exhibits filed with the U.S. Securities    
and Exchange Commission under the U.S. Securities Act of 1933 and relating to   
the debt securities of Rentenbank described in the accompanying prospectus.     
These documents are also available free of charge at the offices of Deutsche    
Bank Luxembourg, S.A., 2 Boulevard Konrad Adenauer, L-1115 Luxembourg.          

You should rely only on the information provided in this prospectus     
supplement and the accompanying prospectus. We have not, and the underwriters   
have not, authorized anyone else to provide you with different information. We  
are not, and the underwriters are not, making an offer of these securities in   
any jurisdiction where the offer or sale is not permitted. You should not       
assume that the information in this prospectus supplement or the accompanying   
prospectus is accurate as of any date other than the date on the front of such  
documents.                                                                      

    This prospectus supplement includes particulars given in compliance with the
rules governing the listing of securities on the Luxembourg Stock Exchange for  
the purpose of giving information with regard to Landwirtschaftliche            
Rentenbank.                                                                     

The distribution of the accompanying prospectus and this prospectus     
supplement and the offering of the notes in some jurisdictions may be           
restricted by law. Persons into whose possession the prospectus and this        
prospectus supplement come should inform themselves about and observe any such  
restrictions. The accompanying prospectus and this prospectus supplement do not 
constitute, and may not be used in connection with, an offer or solicitation by 
anyone in any jurisdiction in which such offer or solicitation is not           
authorized or in which the person making such offer or solicitation is not      
qualified to do so or to any person to whom it is unlawful to make such offer   
or solicitation. See "Underwriting".                                            

PRESENTATION OF FINANCIAL DATA

In this prospectus supplement, references to "euro" or "[e]" are to the 
single currency which was introduced as of January 1, 1999 at the start of the  
third stage of European economic and monetary union. In this prospectus         
supplement, references to "Deutsche Mark" or "DM" are to the former national    
currency unit of the Federal Republic of Germany, which was a legal tender      
until December 31, 2001 as a non-decimal sub-unit of the euro, and references   
to "U.S. dollars" or "$" are to United States dollars. See "The Federal         
Republic of Germany -- Monetary and Financial System -- Foreign Exchange Rates  
and Controls" in the accompanying prospectus for information regarding the      
rates of conversion of Deutsche Mark into United States dollars and other major 
currencies for the period 1997 through 1998 and for information regarding the   
rates of conversion of euro into United States dollars and other major          
currencies for the period 1999 through 2002. See "Exchange Rate Information"    
for information regarding the rates of conversion of the euro into United       
States dollars for the period from January 1, 1999 through December 31, 2002.   
On April 7, 2002, the Noon Buying Rate for cable transfers in New York City     
payable in euros was [e]1.00 = $1.062.                                          

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FORWARD-LOOKING STATEMENTS

This Prospectus Supplement contains forward-looking statements that are 
based on current expectations, estimates, forecasts and projections about the   
industry in which we operate, management's beliefs and assumptions made by      
management. Such statements include, in particular, statements about our plans, 
strategies and prospects. Words such as "expects," "anticipates," "intends,"    
"plans," "believes," "seeks," "estimates," variations of such words and similar 
expressions are intended to identify forward-looking statements. These          
statements are not guarantees of future performance and involve risks,          
uncertainties and assumptions that are difficult to predict. Therefore, actual  
outcomes and results may differ materially from what is expressed or forecasted 
in these forward-looking statements. Except as required under the Federal       
securities laws and the rules and regulations of the Securities and Exchange    
Commission, we do not have any intention or obligation to update publicly any   
forward-looking statements after they are made, whether as a result of new      
information, future events or otherwise.                                        

   In this prospectus supplement, references to "Rentenbank", "the Bank", "we"
or "us" are to Landwirtschaftliche Rentenbank.                                  

 RECENT DEVELOPMENTS

RECENT BOND ISSUANCES                                                           

    Under our U.S. $35 billion Euro Medium-Term Note Program we issued U.S. $500
million 2.875% Notes due December 20, 2005 on December 20, 2002, [e]1 billion   
3.625% Bonds due February 15, 2008 on January 21, 2003, U.S. $500 million 4%    
Bonds due January 28, 2010 on January 28, 2003, CHF250 million 1.75% Notes due  
February 12, 2008 on February 12, 2003 and [e] 500 million 3.625% due February  
15, 2008 on February 14, 2003.                                                  

   Under our U.S. $35 billion Euro Medium-Term Note Program, we issued CHF 250
million 3.25% Notes due August 28, 2012 on July 23, 2002 (increased by another  
CHF 100 million on September 19, 2002) and [e] 400 million 3.65% Notes due      
September 6, 2006 on August 27, 2002.                                           

BUSINESS                                                                        

    Rentenbank plans to raise the equivalent of [e]8 -- 10 billion in medium and
long-term funding in 2003. This figure includes all transactions in the         
domestic and international capital markets with maturities of more than two     
years. The roughly [e]10.5 billion raised in 2002 slightly exceeded the         
predicted range of [e]8 billion - - 10 billion. According to preliminary        
figures, total assets in 2002 increased by 8.8% (15.0%) to [e] 64.3 billion     
([e]59.1 billion). The securities  portfolio grew at a lower rate by 6.1%       
(13.8%) amounting to [e]15.6 bill ion ([e]14.7 billion) due to a lower growth   
rate in the demand for refinancing in certificate form.                         

According to an initial review, the Board of Managing Directors was     
satisfied with the bank's earnings situation. Due to favourable refinancing     
conditions in domestic and international financial markets, tight cost          
management and the increased loan volume, net interest income as well as the    
operating result were slightly increased in the business year 2002. According   
to preliminary calculations, net interest income rose by 5.0% to [e] 177.4      
million ([e]168.9 million). Based  on these figures, the Board of Managing      
Directors is expecting an operating result (before risk provisions and net      
valuation adjustments) of [e]143. 1 million ([e]134.0 million) for 2002 after   
deduction of general administrative expenses of [e] 34.4 million ([e]34.6       
million). Net income for the year is expected to reach [e] 35.0 million ([e]34.0
million) of which [e]26.3 million  ([e]25.5 million) will be added to disclosed 
reserves. Liable capital is expected to be further strengthened by allocating   
[e]70.0 million to the fund cover ing general banking risks.                    

The discussion above is based on preliminary, unaudited results for our 
fiscal year ended December 31, 2002. Consequently, the amounts discussed above  
could be subject to change as a result of the audit process. We expect our      
final, audited financial statements for 2002 to be announced at a press         
conference and published in the near future.                                    

  On November 7, 2002, we participated in a capital increase for DZ Bank for
an amount of approximately [e]16. 2 million. DZ Bank is one of the chief lenders
in the co-operative loan sector. By participating in this transaction we        
maintained our current 3.35% stake in DZ Bank.                                  

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GERMAN FEDERAL DEVELOPMENT BANKS NEW RESTRUCTURING LAW                          

On March 17, 2003, the German government formally presented the draft   
version of the German Federal Development Banks New Restructuring Law           
(Bundesforderbankenneustrukturierungsgesetz). Under this law, several changes   
to Rentenbank's governing law have been proposed in order to clarify the        
activities of Rentenbank with respect to the March 1, 2002 EU agreement with    
the EU concerning Anstaltslast. The majority of the changes to the governing    
law were already completed last fall. We do not expect any of the changes to    
have an adverse impact on Rentenbank or to change our core operations. Any      
changes are expected to come into effect sometime later this year.              

FEDERAL REPUBLIC OF GERMANY                                                     

GERMANY'S BUDGET DEFICIT                                                        

On November 13, 2002, the German Federal Ministry of Finance released an
official statement of its final estimate of 2002 tax revenues. The official     
statement indicated that total general government tax receipts for 2002 were    
estimated to be approximately 3.5% below previous estimates, which would result 
in a budget deficit in 2002 exceeding the 3% of gross domestic product ("GDP")  
permitted under the Maastricht Treaty. According to the Ministry's statement,   
the 2002 deficit is expected to be approximately 3.75% of GDP, but the 2003     
deficit is expected to fall below 3% of GDP, mainly as a result of planned tax  
reforms and budgetary measures.                                                 

   The terms of the Maastricht Treaty provide that, if the European Commission
determines that the Maastricht 3% budget deficit threshold has been breached,   
the European Commission is required to initiate the excessive-deficit procedure 
of the Stability and Growth Pact, initially involving confidential              
recommendations and a review of corrective measures implemented by the Federal  
Government. On November 13, 2002, in response to the Ministry of Finance's      
official statement, Pedro Solbes, Member of the European Commission responsible 
for Economic and Financial Affairs, announced the initiation of the excessive-  
deficit procedure against the Federal Republic. The first step of this          
procedure was the preparation of a report on Germany's budget and economic      
situation, which was publicly made available on November 19, 2002. In the       
report, the European Commission found that Germany's general government deficit 
is expected to reach 3.8% of GDP in 2002, thus exceeding the maximum deficit    
allowed under the Maastricht Treaty. The report also noted that Germany's       
general government gross debt was expected to increase from 59.5% to 60.9% of   
GDP in 2002, exceeding the 60% ceiling set by the Treaty. The report also       
concluded that preliminary projections showed a deficit of 3.1% of GDP in 2003. 
The report noted, however, that if economic growth in Germany were to reach     
approximately 1.5% in 2003 as the Commission assumed and reform measures were   
carried out as proposed, the 2003 deficit could fall below 3%. The report also  
stated that measures on the expenditure side are not sufficiently specified to  
allow for a full assessment. On January 21, 2003, the European Council adopted  
the opinion of the European Commission that, based on the November report, an   
excessive deficit exists in Germany. The Council recommended that if necessary, 
and provided that the growth outlook is not significantly weaker than assumed   
in the government's budget projections, the German government should take       
further steps by May 21, 2003 to reduce the deficit.                            

  In the event that the European Commission goes on to review the corrective
measures and determines after such review that the Federal Government has       
failed to take adequate corrective measures, the Pact provides for a wide range 
of remedies, up to and including the imposition of annual financial penalties   
of as much as 0.5% of Germany's GDP. Financial penalties may not be imposed,    
however, until the end of a further review period.                              

In response to the projected budget deficit, the Federal Government has 
announced a package of tax reforms and spending cuts. The first part of this    
package, consisting of tax increases for certain energy products and cuts in    
tax benefits related to the use of energy by companies, was adopted by the      
Bundestag on November 14, 2002. The rest of the package comprises a range of    
measures designed to broaden the German tax base, including, among other        
things, limitations on the deductible amounts, and periods of use, of loss      
carry-forwards and a modification of the capital gains tax on real estate       
transactions and sales of securities. The Ministry of Finance has not publicly  
announced estimates on the overall revenues expected to be generated by such    
tax reforms. However, according to the Ministry of Finance, consolidation       
measures on the expenditure side of the budget (in particular labor market and  
pension system expenditure) are expected to result in total savings of as much  
as [e]4.6 billion for the federal  budget in 2003. On November 20, 2002, the    
Federal Cabinet                                                                 

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adopted the second package of measures as a bill. On February 21, 2003, the     
Bundestag adopted the proposed bill. On March 14, 2003, however, the Bundesrat  
rejected the proposal. The Federal Government has called upon a special         
reconciliation committee (Vermittlungsausschuss) to resolve the differences     
between the two houses of the legislature.                                      

On December 4, 2002, the Federal Government presented to the Bundestag a
supplementary federal budget for 2002 as well as the new federal budget plan    
for 2003. For 2002, additional borrowings of [e]13.5 billion have been planned, 
resulting in a total of [e]34.6 b illion in new borrowings for 2002. In the 2003
federal budget plan, new borrowings have been limited to [e] 18.9 billion, with 
the difference expected to be covered by tax reforms, the savings generated by  
the expense consolidation measures and increased economic growth.               

On March 20, 2003, the Bundestag adopted the Federal budget for 2003.   
Overall expenditures are expected to be [e] 248.2 billion, and revenues are     
expected to be [e]229.3 billion.  The difference is to be covered by new        
borrowings of [e]18.9 billion.                                                  

(Sources: http://www.bundesfinanzministerium.de/wwwroot-BMF/BMF-.336.14883/     
..htm;                                                                          
http://www.bundesregierung.de/emagazine_entw,-449342/Haushaltskonsolidierung-   
trotz-.htm;                                                                     
http://www.bundesregierung.de/index-,413.450027/Bundesregierung-reagiert-auf-   
s.htm;                                                                          
http://eng.bundesregierung.de/frameset/index.jsp; http://www.europa.eu.int/     
news/index_en.htm;                                                              
http://www.bundesregierung.de/Themen-A-Z/Steuern-und-Finanzen/Nachrichten-      
,765.468657/Abbau-von-Steuerverguenstigung.htm;                                 
http://www.bundesregierung.de/Themen-A-Z/Steuern-und-Finanzen/Nachrichten-      
,765.472262/Bundesregierung-ruft-den-Vermi.htm;                                 
http://www.bundesregierung.de/Themen-A-Z/Steuern-und-Finanzen/Nachrichten-      
,765.473329/Bundeshaushalt-2003-verabschie.htm)                                 

OUTLOOK FOR THE GERMAN ECONOMY                                                  

On November 13, 2002, the German Council of Economic Experts            
(Sachverstandigenrat zur Begutachtung der gesamtwirtschaftlichen Entwicklung),  
an independent academic body formally mandated by law to advise the Federal     
Government and the Parliament on economic policy issues, submitted its annual   
report 2002/2003 to Chancellor Schroder. According to the report, the Council   
expects a very moderate continuation of upward macroeconomic development in     
2003. The Council expects Germany's economic growth rate to be 0.2% for the     
year 2002 and 1% in 2003. By comparison, the Federal Government initially       
indicated that it expects a real growth rate of 0.5% for the year 2002 and      
assumed 1.5% growth for 2003. Such projections are largely in line with the     
OECD's publicly announced projection of a growth rate of 0.4% for 2002 and 1.5% 
for 2003. The projections announced by the European Commission were similar:    
0.4% for 2002 and 1.4% for 2003. In respect of the budget deficit, whereas the  
Council expects the 2003 budget deficit to be 3.3% of Germany's GDP, the        
Ministry of Finance assumes that it will be able to be reduced to below the 3%  
threshold. The OECD has publicly announced its conclusion that the deficit      
could drop below 3% of GDP for 2003 if the announced reform measures are fully  
implemented and the German economy grows at the OECD's current estimates.       
However, the OECD also cautions that "negative growth shocks could easily push  
the deficit up further" and notes that some of the measures are one-off in      
nature and therefore not repeatable after 2003.                                 

On January 29, 2003, the German Federal Ministry of Economics and Labor 
predicted that the German economic growth rate would be around 1% in 2003,      
thereby revising its earlier prediction of 1.5%. It confirmed the previous      
announcement by the German Federal Statistic Office that the German gross       
domestic product rose by a real rate of 0.2% in 2002. The Federal Government    
confirmed its previous statement that it expects the budget deficit to be below 
3% in 2003.                                                                     

During the parliamentary debates preceding the adoption of the Federal  
budget on March 20, 2003, the Federal Minister of Finance, Hans Eichel,         
confirmed the Federal Government's prediction that the German economy will grow 
at a rate of 1% in 2003. He noted, however, that this prediction may be subject 
to change once the results of the tax estimate scheduled for May 2003 become    
available.                                                                      

The projections of the Federal Government are, however, subject to      
substantial risks. Further recovery of the global economy with a sustainable    
stimulation in the U.S. and an increase in world trade are still uncertain. In  
particular, the impact of the war in Iraq cannot be predicted and thus cannot   
be considered for the annual projection. It may have a lasting negative impact  
on the international financial markets, oil prices, and consumer and investor   
confidence. In addition, there are risks resulting from developments in some    
Latin American countries. On the other hand, there is also a chance that        
recovery will be quicker than assumed in the projections. In previous weak      
economic cycles, self-boosting overall economic forces have sometimes been      
underestimated. An easing of the situation in the Middle East could have an     
immediate positive impact on oil prices and real earnings and thus accelerate   
growth, aside from having a positive effect on confidence.                      

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     The  Federal  Government  expects  that  momentum  for growth of the German
economy will be gained through exports as the global economy recovers.  The euro
has  appreciated  significantly  in recent  months  against the U.S.  dollar and
currencies tied to it. This appreciation,  and any further  appreciation,  could
have the effect of reducing the competitiveness of German exports by making them
more expensive.                                                                 

(Sources: http://eng.bundesregierung.de/frameset/index.jsp;http://              
www.sachverstaendigenrat-wirtschaft.de/;                                        
http://www.destatis.de/presse/deutsch/pm2003/p0200121.htm;                      
http://www.bmwi.de/Homepage/Politikfelder/wirtschaftspolitik/wirtschaftsfakten/ 
wirtschaftsfakten.jsp.;                                                         
http://www.europa.eu.int/news/index_en.htm;                                     
http://www.bundesregierung.de/Themen-A-Z/Steuern-und-Finanzen/Nachrichten-      
,765.473329/Bundeshaushalt-2003-verabschie.htm; Bundesministerium fur           
Wirtschaft und Arbeit, Jahreswirtschaftsbericht 2003, p. 8 & 9)                 

IMPACT OF THE WAR IN IRAQ ON THE FEDERAL REPUBLIC'S RELATIONS WITH              
INTERNATIONAL ORGANIZATIONS                                                     

 In recent months, several of the international organizations of which the
Federal Republic is a member (including the United Nations, the European Union  
and the North Atlantic Treaty Organization ("NATO")) have devoted significant   
attention to the conflict with Iraq. Despite widespread agreement on the        
desirability of disarming Iraq, there have been different opinions expressed    
within these organizations as to the means and timing for achieving that goal.  
The Federal Government has expressed its confidence that the substance of       
relations between the Federal Republic and other states is not threatened and   
that any divisions as may exist can be overcome.                                

(Source: Bundesregierung, news release dated February 13, 2003; news release    
dated March 19, 2003; news release dated March 20, 2003 (EU-summit); press      
release No. 119 dated March 20, 2003)                                           

PROPOSED GERMAN TAX CHANGES                                                     

 On February 21, 2003 the German Bundestag passed a bill for the repeal of
certain tax benefits. According to the proposed legislation, certain capital    
gains derived from the disposition of Notes would be taxable to individuals     
tax-resident in Germany, irrespective of a holding period, even if the Notes do 
not form part of the property of a German trade or business. However, a flat    
tax rate below the graduated personal income tax rates would apply to such      
capital gains. The netting of capital gains from the disposition of Notes or    
other securities by private individuals with losses from other categories of    
income would be restricted. On March 14, 2003 the German Bundesrat withheld its 
consent to the bill, which was subsequently referred to the reconciliation      
committee (Vermittlungsausschuss) of both houses and remains under discussion.  

    On March 17, 2003 the German Federal Government introduced draft legislation
for granting tax amnesty to taxpayers receiving unreported interest income from 
funds invested offshore. As an incentive to repatriate such assets to Germany,  
the existing tax regime in respect of interest income would be changed. Instead 
of the interest withholding tax liability, a security holders liability to      
income tax on interest received would be satisfied by the withholding of tax    
from interest payments to be at a rate of 25%. Where the individual tax         
liability falls short of the 25% tax rate, however, any excess withheld would   
be refunded based on an assessment to tax. It is presently unclear whether      
these plans will actually be implemented.                                       

PROPOSED EU SAVINGS TAX DIRECTIVE                                               

   As outlined in the Base Prospectus, according to a proposed draft directive
regarding the taxation of savings income that was approved by the Council of    
the European Union on December 13, 2001, each EU Member State under its         
domestic law must require paying agents (within the meaning of the directive)   
established within its territory to provide to the competent authority of its   
EU Member State details of the payment of interest (within the meaning of the   
directive) to any individual resident in another EU Member State. The competent 
authority of the EU Member State of the paying agent is then required to        
communicate this information to the competent authority of the EU Member State  
of which the recipient is a resident. The proposed directive is supposed to be  
implemented by the EU Member States by January 1, 2004.                         

However, on January 21, 2003 the Ministers of Finance of the EU Member  
States politically agreed that Austria, Belgium and Luxembourg may opt instead  
to withhold tax from such payments at a rate of 15% for the first three years   
starting January 1, 2004, of 20% as from January 1, 2007 and 35% as from        
January 1, 2010. Austria, Belgium and Luxembourg shall become obliged to supply 
information rather than to withhold tax only if and when: Switzerland, Monaco,  
Liechtenstein, Andorra and San Marino, after having levied withholding tax      
similar to the one to be imposed in Austria, Belgium and Luxembourg for a       
transitional period first, agree to supply information as well;                 

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and the Council of the European Union concludes unanimously that the United     
States is committed to exchange information upon request. On March 14, 2003,    
the Council of the European Union concluded the substantive consultations on    
the final text of the directive. Adoption of the proposal, which is expected to 
substantially reflect the understanding reached on January 21, 2003, was        
postponed. However, insofar only a political agreement has been reached, it is  
still not yet possible to predict precisely when or in what form the proposal   
will ultimately be adopted. It is also expected that Switzerland, Monaco,       
Liechtenstein, Andorra and San Marino will agree to the proposed transitional   
withholding tax, followed by information reporting, and that certain associated 
territories and dependencies of EU Member States will apply the same measures   
as the EU Member States. The timing of these actions and measures is uncertain  
however.                                                                        

RESULTS OF 2002 GENERAL ELECTIONS                                               

On September 22, 2002, the Federal Republic of Germany held general     
elections to the Bundestag. Based on the final election results published on    
October 9, 2002, the coalition consisting of the Social Democrats (SPD) and the 
Bundnis 90/Grune (the Greens), which had formed the government since 1998, has  
achieved a narrow majority. The two parties have entered into a coalition       
agreement relating to their collaboration, which was published on October 16,   
2002.                                                                           

    The following table shows the final results of the general elections held on
September 22, 2002:                                                             

                                                                [Download Table]

                  % OF VOTES  NUMBER OF SEATS
                  ----------  ---------------

                                             
SPD.............        38.5              251
CDU.............        29.5              190
CSU.............         9.0               58
Bundnis 90/Grune         8.6               55
FDP.............         7.4               47
PDS.............         4.0                2
Others..........         3.0                -
Total...........       100 %              603

(Source: http://www.bundeswahlleiter.de/e/index-e.htm)                          

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 USE OF PROCEEDS

The net proceeds from the sale of the notes will be $995,680,000 (after 
deduction of underwriting discounts and commissions but before expenses of the  
offering). The net proceeds from the sale of the notes will be used to finance  
our lending activities as described in the accompanying prospectus, including   
the refinancing of existing liabilities.                                        

 EXCHANGE RATE INFORMATION

  Because the euro did not exist prior to January 1, 1999, we cannot present
actual exchange rates between the euro and the U.S. dollar for any period prior 
to that date. For these prior periods we present U.S. dollar exchange rates for 
the Deutsche Mark, one of the legacy currencies of the euro. The following      
table shows the period end, average, high and low noon buying rates for the     
Deutsche Mark, expressed in Deutsche Mark per $1.00, for the periods and the    
dates indicated. The official fixed rate of the Deutsche Mark per euro is       
DM1.95583 per [e]1.00. No represe ntation is made that the Deutsche Mark or U.S.
dollar amounts referred to herein could have been or could be converted into    
U.S. dollars or Deutsche Mark, as the case may be, at any particular rate.      

                                                                    [Download Table]
                                                     

                          PERIOD                         
YEARS ENDED DECEMBER 31,     END  AVERAGE(1) HIGH     LOW
------------------------  ------  -------  ------  ------
                                                         
1997....................  1.7991   1.7394  1.8810  1.5413
1998....................  1.6670   1.7859  1.8542  1.6060


(1) The average  of the noon buying rates on the last business day of each month
during the relevant period.                                             

   The following table shows the period end, average, high and low noon buying
rates for euro, expressed in U.S. dollars per [e] 1.00 for 1999, 2000, 2001, and
2002. No representation is made that the euro or U.S. dollar amounts referred   
to herein could have been or could be converted into U.S. dollars or euros, as  
the case may be, at any particular rate.                                        

                                                                [Download Table]

                              PERIOD                         
                                 END  AVERAGE(1) HIGH     LOW
                              ------  -------  ------  ------

                                                             
Year ended December 31, 1999  1.0070   1.0558  1.1812  1.0016
Year ended December 31, 2000  0.9388   0.9207  1.0335  0.8270
Year ended December 31, 2001  0.8901   0.8909  0.9535  0.8370
Year ended December 31, 2002  1.0485   0.9495  1.0485  0.8594
Quarter ended March 31, 2003  1.0900   1.0806  1.1062  1.0361


(1) The average  of the noon buying rates on the last business day of each month
during the relevant period.                                             

    There are, except in limited embargo circumstances, no legal restrictions in
the Federal Republic on international capital movements and foreign exchange    
transactions. However, for statistical purposes only, every individual or       
corporation residing in the Federal Republic, including Rentenbank, must report 
to the Deutsche Bundesbank, the German Central Bank, subject to a number of     
exceptions, any payment received from or made to an individual or a corporation 
resident outside of the Federal Republic if this payment exceeds [e] 12,500 or  
the equivalent in a foreign currency.                                           

   On April 7, 2003, the Noon Buying Rate for cable transfers in New York City
payable in euros was [e]1.00 = $1.062.                                          

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DESCRIPTION OF THE NOTES

    The following is a description of certain terms of the notes and supplements
the description of the general terms and conditions of the securities in the    
accompanying prospectus under the heading "Description of the Securities". If   
the terms described in the following summary differ from the terms described in 
the accompanying prospectus, you should rely on the terms described in the      
following description. This description is qualified in its entirety by         
reference to the terms and conditions of the notes, which are discussed below.  
Copies of the form of the notes and of the Fiscal Agency Agreement pursuant to  
which the notes will be issued have been filed with the Securities and Exchange 
commission as an exhibit to the registration statement of which this prospectus 
supplement and the accompanying prospectus are a part.                          

GENERAL                                                                         

We will initially offer the notes in an aggregate principal amount of   
$1,000,000,000. The notes will mature at par on June 16, 2008. The notes will   
be issued in minimum denominations of $1,000 and multiples thereof.             

The notes will constitute unsecured and unsubordinated obligations of   
Rentenbank and will rank pari passu without any preference among themselves     
(whether by reason of priority of date of issue or otherwise) and at least      
equally with all other unsecured and unsubordinated obligations of Rentenbank,  
present and future subject to statutory exceptions relating to the payment of   
certain liabilities ahead of unsecured debts. These exceptions arise under our  
governing law and the insolvency laws of the Federal Republic and would apply   
if we were the subject of an insolvency proceeding. These laws dictate that the 
fees and costs of the insolvency proceedings and either liabilities relating to 
the administration of the estate or the fulfillment of liabilities the          
administrator deems necessary for the benefit of the insolvent estate would be  
paid before unsecured obligations.                                              

Application has been made to list the notes on the Luxembourg Stock     
Exchange.                                                                       

   At December 31, 2001, the outstanding total of our secured bond obligations
was [e]12.3 billion. This include s our registered bonds and secured bearer     
bonds. There are no material secured obligations other than our registered      
bonds and secured bearer bonds.                                                 

   The notes will bear interest at the rate per annum shown on the front cover
of this prospectus supplement, payable semi-annually in arrears on June 16 and  
December 16 of each year, commencing June 16, 2003. There will be a short first 
coupon for the period from and including April 15, 2003 to but excluding June   
16, 2003. Payments will be made to the person who is the registered holder at   
the close of business on the day immediately preceding such interest payment    
date. If any interest, principal or redemption payment date falls on a day that 
is not a business day, we will make the required payment on the next succeeding 
business day, and no additional interest will accrue in respect of the payment  
made on that next succeeding business day.                                      

  As used above and in the notes, "business day" means any day, other than a
Saturday or Sunday, that is neither a legal holiday nor a day on which          
commercial banks are authorized or required by law, regulation or executive     
order to close in The City of New York; provided, however, that the day must    
also be a day on which the Trans-European Automated Real-Time Gross Settlement  
Express Transfer (TARGET) System is open. Interest on the notes will be         
calculated on the basis of a 360-day year of twelve 30-day months. The notes do 
not provide for any sinking fund. We may redeem the notes prior to maturity in  
the circumstances described in "- Redemption for Tax Reasons" below.            

BOOK-ENTRY SYSTEM AND FORM OF THE NOTES                                         

   The notes will be issued in the form of one or more fully registered Global
Notes which will be deposited with, or on behalf of, DTC. Global Notes will be  
registered in the name of DTC or its nominee. Except as set forth below, Global 
Notes may be transferred, in whole and not in part, only to DTC or its nominee. 

 Beneficial interests in the notes will be shown on, and transfers thereof
will be effected only through, records maintained by DTC and its direct and     
indirect participants, including Euroclear Bank S.A./N.V., as operator of the   
Euroclear System ("Euroclear") and Clearstream Banking, Societe anonyme,        
Luxembourg ("Clearstream Banking"). Investors may elect to hold interests in    
the notes through any of DTC, Euroclear or Clearstream Banking, if they are     
participants in these systems, or indirectly through organizations which are    
participants in these systems.                                                  

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     Upon  issuance of a Global  Note,  we expect  that DTC or its nominee  will
credit on its bookentry registration and transfer system the principal amount of
the notes  represented by the Global Note to the accounts of  institutions  that
have  accounts  with  DTC  or  its  nominee   ("participants").   Euroclear  and
Clearstream  Banking hold  securities  on behalf of their  participants  through
customers'  securities  accounts in their respective names on the books of their
respective  depositaries,  which  in turn  hold  the  securities  in  customers'
securities accounts in the depositaries' names on the books of DTC.             

The Fiscal Agent initially will act as depositary for DTC, Euroclear and
Clearstream Banking. The accounts to be initially credited will be designated   
by the underwriters participating in the distribution of notes. Ownership of    
beneficial interests in a Global Note will be limited to participants or        
persons that may hold interests through participants. The laws of some states   
require that certain purchasers of securities take physical delivery of the     
securities in definitive form. These limits and laws may impair the ability to  
own, transfer or pledge beneficial interests in a Global Note.                  

   So long as DTC or its nominee is the registered owner of a Global Note, DTC
or its nominee, as the case may be, will be considered the sole owner and       
holder of the notes represented by the Global Note for all purposes under the   
Fiscal Agency Agreement. Except as set forth below, owners of beneficial        
interests in a Global Note will not be entitled to have the notes represented   
by the Global Note registered in their names, will not receive or be entitled   
to receive physical delivery of the notes in definitive form and will not be    
considered the owners or holders thereof under the Fiscal Agency Agreement.     
Accordingly, each person owning a beneficial interest in the Global Note must   
rely on the procedures of DTC and, to the extent relevant, Euroclear or         
Clearstream Banking, and the participant through which the person owns its      
interest, to exercise any rights of a holder under the Fiscal Agency Agreement. 
Rentenbank understands that, under existing practice, in the event that         
Rentenbank requests any action by a holder or a beneficial owner desires to     
take any action that a holder is entitled to take, the Depositary would act     
upon the instructions of the participant or authorize the participant to take   
such action, and the participants would authorize beneficial owners owning      
through these participants to take the action or would otherwise act upon the   
instructions of beneficial owners owning through them.                          

 Principal and interest payments on the notes represented by a Global Note
registered in the name of DTC or its nominee will be made by us to the Fiscal   
Agent. The Fiscal Agent will make payments to DTC or its nominee, as the case   
may be, as the registered holder of the Global Note. None of Rentenbank, the    
Fiscal Agent or any paying agent for the notes will have any responsibility or  
liability for any aspect of the records relating to or payments made on account 
of beneficial ownership interests in the Global Notes or for maintaining,       
supervising or reviewing any records relating to the beneficial ownership       
interests. We expect that DTC or its nominee, upon receipt of any payment of    
principal or interest, will immediately credit participants' accounts with      
payments in amounts proportionate to their respective beneficial interests in   
the principal amount of the Global Note as shown on the records of DTC to its   
nominee. We also expect that payments by participants to owners of beneficial   
interests in the Global Note held through participants will be governed by      
standing instructions and customary practices, as is now the case with          
securities held for the account of customers registered in "street name", and   
will be the responsibility of these participants. Distributions with respect to 
notes held through Euroclear or Clearstream Banking will be credited to the     
cash accounts of Euroclear participants or Clearstream Banking participants in  
accordance with the relevant system's rules and procedures, to the extent       
received by its depositary. Neither Rentenbank nor the Fiscal Agent will have   
any responsibility or liability for any aspect of the records relating to, or   
payments made on account of, beneficial ownership interests in the Global Notes 
or for maintaining, supervising or reviewing any records relating to the        
beneficial ownership interests.                                                 

  DTC has informed us that: DTC is a limited-purpose trust company organized
under the laws of the State of New York, a member of the Federal Reserve        
System, a "clearing corporation" within the meaning of the New York Uniform     
Commercial Code, and a "clearing agency" registered pursuant to the provision   
of Section 17A of the U.S. Securities Exchange Act of 1934. DTC was created to  
hold securities of its participants and to facilitate the clearance and         
settlement of securities transactions among its participants in the securities  
through electronic book-entry changes in accounts of the participants, thereby  
eliminating the need for physical movement of certificates. DTC participants    
include securities brokers and dealers (including underwriters), banks, trust   
companies, clearing corporations and certain other organizations, some of whom  
(and/or their representatives) own DTC. Access to the DTC book-entry system is  
also available to others, such as banks, brokers, dealers and                   

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trust companies that clear through or maintain a custodial relationship with a  
participant, either directly or indirectly. DTC agrees with and represents to   
its participants that it will administer its book-entry system in accordance    
with its rules and by-laws and requirements of law.                             

Euroclear and Clearstream Banking have informed us that: Euroclear and  
Clearstream Banking each hold securities for their customers and facilitate the 
clearance and settlement of securities transactions by electronic book-entry    
transfer between their respective account holders. Euroclear and Clearstream    
Banking provide various services including safekeeping, administration,         
clearance and settlement of internationally traded securities and securities    
lending and borrowing. Euroclear and Clearstream Banking also deal with         
domestic securities markets in several countries through established depository 
and custodial relationships. Euroclear and Clearstream Banking have established 
an electronic bridge between their two systems across which their respective    
participants may settle trades with each other.                                 

Euroclear and Clearstream Banking customers are world-wide financial    
institutions including underwriters, securities brokers and dealers, banks,     
trust companies and clearing corporations. Indirect access to Euroclear and     
Clearstream Banking is available to other institutions which clear through or   
maintain a custodial relationship with an account holder of either system.      

The following arrangements will apply to the notes:                     

    Initial settlement for the notes will be made in U.S. dollars in immediately
available funds (i.e., for value on the date of delivery of the notes).         

Investors electing to hold their notes through DTC will follow the      
settlement practices applicable to U.S. corporate debt obligations. The         
securities custody accounts of investors will be credited with their holdings   
on the settlement date against payment in same-day funds within DTC effected in 
U.S. dollars.                                                                   

Investors electing to hold their notes through Euroclear or Clearstream 
Banking accounts will follow the settlement procedures applicable to            
conventional eurobonds.                                                         

    All notes will be recorded in a register maintained by the Fiscal Agent. The
Fiscal Agent will be responsible for (1) maintaining a record of the aggregate  
holdings of all outstanding notes evidenced by the Global Notes; (2) ensuring   
that payments of principal and interest in respect of the notes received by the 
Fiscal Agent from Rentenbank are duly credited to the holders of the notes; and 
(3) transmitting to Rentenbank any notices from the holders of the notes.       

Secondary market sales of book-entry interests in the notes between DTC 
participants will occur in the ordinary way in accordance with DTC rules and    
will be settled using the procedures applicable to United States corporate debt 
obligations in DTC's Settlement System. Secondary market sales of book-entry    
interests in the notes held through Euroclear or Clearstream Banking to         
purchasers of book-entry interests in the notes through Euroclear or            
Clearstream Banking will be conducted in accordance with the normal rules and   
operating procedures of Euroclear and Clearstream Banking and will be settled   
using the procedures applicable to conventional eurobonds.                      

 If DTC is at any time unwilling or unable to continue as Depositary or is
ineligible to act as Depositary, and a successory Depositary is not appointed   
by Rentenbank within 90 days after Rentenbank is notified by DTC or becomes     
aware of this condition, Rentenbank will issue notes in definitive form in      
exchange for the Global Note representing the notes. In addition, Rentenbank    
may at any time and in its sole discretion determine not to have the notes      
represented by one or more Global Notes and, in that case, will issue notes in  
definitive form in exchange for all of the Global Notes representing the notes. 
In that case, the notes will be issued only in fully registered form without    
coupons in denominations of U.S. $1,000 and multiples thereof.                  

REDEMPTION FOR TAX REASONS                                                      

  For a discussion of our option to redeem the notes for tax reasons, please
see "Description of the Securities -- Redemption for Tax Reasons" in the        
accompanying prospectus.                                                        

REDEMPTION AT HOLDER'S OPTION                                                   

   If, as a result of a change in the ownership of our capital stock, a change
in the laws of the Federal Republic, a change in the official interpretation of 
those laws, or any action taken by the Federal Republic, its legislative        
bodies, political subdivisions or courts, our obligations under the notes are   
no longer fully backed by the credit of the Federal Republic under the public   
law principle of institutional liability (Anstaltslast) or by any replacement   
instrument, the notes may be redeemed at                                        

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the option of the holders. Under the terms of the notes, these events are       
referred to as "Redemption Events". After a Redemption Event occurs, Rentenbank 
will give notice to the Fiscal Agent, who will send each holder a notice of     
their right to redeem. Holders of the notes will have 60 days from the time     
they receive this notice from the Fiscal Agent to return the notice and the     
certificates representing the notes to be redeemed. After this 60-day period,   
holders will not have the option to redeem the notes unless a new Redemption    
Event occurs. The redemption price will equal 100% of the principal amount plus 
any accrued interest.                                                           

FURTHER ISSUES                                                                  

 For a discussion of our ability to issue notes of the same series, please
see "Description of the Securities-Further Issues of Securities of Same Series" 
in the accompanying prospectus.                                                 

FISCAL AGENT                                                                    

There will be a registrar, Fiscal Agent and principal paying agent (the 
"Fiscal Agent") for Rentenbank, whose duties will be governed by the Fiscal     
Agency Agreement. Deutsche Bank Trust Company Americas, which will act as       
Fiscal Agent for the notes, has its principal corporate agency and trust office 
at 280 Park Avenue, New York, NY 10017, MS -- NYC03 -- 0914. We may replace the 
Fiscal Agent. We may maintain deposit accounts and conduct other banking and    
financial transactions with the Fiscal Agent. The Fiscal Agent is the agent of  
Rentenbank, is not a trustee for the holders of notes and does not have the     
same responsibilities or duties to act for such holders as would a trustee.     

NOTICES                                                                         

Notices to holders of the notes will be sent by mail to the registered  
holders and will be published, so long as the notes are listed on the           
Luxembourg Stock Exchange, in English in a leading newspaper having general     
circulation in Luxembourg (which is expected to be the Luxemburger Wort).       

REPLACEMENT NOTES                                                               

 In case of mutilation, destruction, loss or theft of any definitive note,
application for replacement is to be made with the Fiscal Agent. Any such       
definitive note will be replaced by the Fiscal Agent in compliance with such    
procedures as Rentenbank and the Fiscal Agent may require and subject to        
applicable laws and regulations of the State of New York and the Luxembourg     
Stock Exchange.                                                                 

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UNDERWRITING

  Under the terms and subject to the conditions contained in an underwriting
agreement, dated April 8, 2003 (the "Underwriting Agreement"), the underwriters 
named below (the "Underwriters") have severally agreed to purchase, and         
Rentenbank has agreed to sell to them, severally, the respective principal      
amount of the notes set forth opposite their respective names below:            

                                                                [Download Table]

                                        PRINCIPAL AMOUNT
NAMES                                       OF NOTES    
--------------------------------------  ----------------
                                                        
ABN AMRO Bank N.V.....................      $313,000,000
Lehman Brothers International (Europe)      $313,000,000
UBS Limited...........................      $314,000,000

Deutsche Bank AG London...............       $10,000,000
ING Belgium N.V./S.A..................       $10,000,000
Mizuho International plc..............       $10,000,000
Royal Bank of Canada Europe Limited...       $10,000,000
The Toronto-Dominion Bank.............       $10,000,000
Tokyo-Mitsubishi International plc....       $10,000,000
                                        ----------------

Total.................................   $ 1,000,000,000
                                        ================


The Underwriting Agreement provides that the obligations of the several 
Underwriters to pay for and accept delivery of the notes is subject to, among   
other things, the approval of certain legal matters by their counsel and        
certain other conditions. The Underwriters are obligated to take and pay for    
all of the notes, if any are taken.                                             

   The notes are offered for sale in those jurisdictions in the United States,
Europe and Asia where it is legal to make such offers.                          

In order to facilitate the offering of the notes, the Underwriters may  
engage in transactions that stabilize, maintain or otherwise affect the prices  
of the notes. Specifically, the Underwriters may overallot in connection with   
the offering, creating a short position in the notes for their own account. In  
addition, to cover overallotments or to stabilize the price of the notes, the   
Underwriters may bid for, and purchase, the notes in the open market. Finally,  
the Underwriters may reclaim selling concessions allowed to an Underwriter or a 
dealer for distributing the notes in the offering, if they repurchase           
previously distributed notes in transactions to cover syndicate short           
positions, in stabilization transactions or otherwise. Any of these activities  
may stabilize or maintain the market price for the notes above independent      
market levels. The Underwriters are not required to engage in these activities  
and may end any of these activities at any time.                                

   Each of the Underwriters has agreed that it will not offer, sell or deliver
any of the notes, directly or indirectly, or distribute this prospectus         
supplement or the accompanying prospectus or any other offering material        
relating to the notes, in or from any jurisdiction except under circumstances   
that will result in compliance with the applicable laws and regulations         
thereof.                                                                        

Each of the Underwriters has represented and agreed that (i) it has not 
offered or sold and prior to the expiration of the period of six months from    
the date of issue of the notes will not offer or sell any notes to persons in   
the United Kingdom except to persons whose ordinary activities involve them in  
acquiring, holding, managing or disposing of investments (as principal or       
agent) for the purposes of their businesses or otherwise in circumstances which 
have not resulted and will not result in an offer to the public in the United   
Kingdom within the meaning of the Public Offers of Securities Regulations 1995; 
(ii) it has complied and will comply with all applicable provisions of the      
Financial Services and Markets Act 2000, which we refer to below as the FSMA,   
with respect to anything done by it in relation to the notes in, from or        
otherwise involving the United Kingdom; (iii) it has only communicated or       
caused to be communicated and will only communicate or cause to be communicated 
an invitation or inducement to engage in investment activity (within the        
meaning of section 21 of the FSMA) received by it in connection with the issue  
or sale of the notes in circumstances in which section 21(1) of the FSMA would  
not, if Rentenbank was not an authorized person, apply to Rentenbank.           

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Each of the Underwriters has acknowledged that (other than in the United States 
of America) no action has been or will be taken in any jurisdiction by the      
underwriters or Rentenbank that would permit a public offering of the notes, or 
possession or distribution of any offering materials in any jurisdiction where  
action for those purposes is required.                                          

Rentenbank does not intend to apply for listing of the notes on a United
States national securities exchange, but has been advised by the Underwriters   
that they intend to make a market in the notes. The Underwriters are not        
obligated, however, to do so and may discontinue their market making at any     
time without notice. No assurance can be given as to the liquidity of the       
trading market for the notes.                                                   

   Rentenbank has agreed to indemnify the several Underwriters against certain
liabilities, including liabilities under the United States Securities Act of    
1933, as amended.                                                               

Certain of the Underwriters and their affiliates from time to time have 
performed, and may in the future perform, various investment banking and/or     
commercial banking services for Rentenbank in the ordinary course of their      
respective businesses.                                                          

   It is expected that delivery of the notes will be made on or about the date
specified in the last paragraph of the cover page of this prospectus            
supplement, which is the fifth business day following the date of this          
prospectus supplement. Under Rule 15c6-1 of the Securities and Exchange Act of  
1934, trades in the secondary market generally are required to settle in three  
business days, unless the parties to any such trade expressly agree otherwise.  
Accordingly, purchasers who wish to trade the notes before the notes are        
delivered by the underwriters may be required, by virtue of the fact that the   
notes initially will settle in five business days, to specify an alternate      
settlement cycle at the time of any such trade to prevent a failed settlement.  
Purchasers of notes who wish to trade the notes before delivery of the notes    
should consult their own advisor.                                               

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 VALIDITY OF THE NOTES

    The validity of the notes will be passed upon on behalf of Rentenbank by the
in-house legal advisors of Rentenbank. The validity of the notes will be passed 
upon by Davis Polk & Wardwell, counsel for the Underwriters. Davis Polk &       
Wardwell may rely as to all matters of German law on the opinion of the in-     
house legal advisors for Rentenbank. Rentenbank may rely as to all matters of   
United States Federal and New York law on the opinion of Davis Polk & Wardwell. 
Sullivan & Cromwell is advising Rentenbank as to matters of United States       
Federal and New York law. All statements in the accompanying prospectus and     
this prospectus supplement with respect to the institutional liability of the   
Federal Republic have been passed upon by the in-house legal advisors of        
Rentenbank, and are included upon their authority.                              

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 GENERAL INFORMATION

LUXEMBOURG LISTING                                                              

Application has been made to list the notes on the Luxembourg Stock     
Exchange. Prior to the listing of the notes, the constitutional documents of    
Rentenbank along with the legal notice relating to the issue of the notes will  
be deposited with the Chief Registrar of the District Court in Luxembourg       
("Greffier en Chef de Tribunal d'Arrondissement de et a Luxembourg") where such 
documents may be examined and copies obtained. In addition, copies of the       
Fiscal Agency Agreement (including the Form of Note), and the Bank's financial  
statements will be available for inspection at the offices of the Luxembourg    
Paying Agent. As long as the notes are listed on the Luxembourg Stock Exchange, 
the Bank will maintain a Paying and Transfer Agent in Luxembourg.               

AUTHORIZATION                                                                   

Rentenbank's participation in this matter was authorized by the Advisory
Board of Rentenbank at its meeting on November 6, 2002.                         

NO MATERIAL CHANGE                                                              

Except as disclosed in this prospectus supplement or the accompanying   
prospectus, there has been no material adverse change in the financial position 
of Rentenbank since December 31, 2001.                                          

LITIGATION                                                                      

Rentenbank is not involved in any litigation or arbitration proceedings 
relating to claims or amounts which are material in the context of the issue of 
the notes nor, so far as Rentenbank is aware, is any such litigation or         
arbitration pending or threatened.                                              

INDEPENDENT AUDITORS                                                            

   Deloitte & Touche GmbH Wirtschaftsprufungsgesellschaft having changed their
name from Wollert-Elmendorff Deutsche Industrie-Treuhand GmbH                   
Wirtschaftsprufungsgesellschaft, Dusseldorf, serves as independent auditors for 
Rentenbank. The Bank's consolidated and unconsolidated financial statements for 
the years ending December 31, 2001 and 2000 are included in the accompanying    
prospectus and have been audited by the independent auditors as stated in their 
report appearing herein. Rentenbank prepares both consolidated and              
unconsolidated financial statements and its financial statements for the last   
two fiscal years as well as its future annual financial statements will be      
available at the offices of the Listing Agent in Luxembourg free of charge.     
Rentenbank does not prepare interim financial statements. The fiscal year of    
Rentenbank runs from January 1 to December 31.                                  

CLEARING SYSTEMS AND SETTLEMENT                                                 

 The notes have been accepted for clearance through the facilities of DTC,
Euroclear and Clearstream. The CUSIP number for the notes is 515110AE4 the ISIN 
code for the notes is US515110AE40 and the Common Code for the notes is         
016700118.                                                                      

NOTICES                                                                         

    All notices shall be deemed to have been given upon (1) the mailing by first
class mail, postage prepaid, of such notices to each holder of the notes to     
their registered addresses as recorded in the applicable securities register    
and, in addition, (2) so long as the notes are listed on the Luxembourg Stock   
Exchange and it is required by the rules of the Luxembourg Stock Exchange,      
publication of such notice to holders of notes in English in a leading          
newspaper having general circulation in Luxembourg (which is expected to be the 
Luxemburger Wort) or, if such publication is not practicable, in one other      
leading English language daily newspaper with general circulation in Europe,    
such newspaper being published on each business day in morning editions.        

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PROSPECTUS                                                                      

LANDWIRTSCHAFTLICHE RENTENBANK

 DEBT SECURITIES

----------

Landwirtschaftliche Rentenbank ("Rentenbank"), an institution organized 
under the public law of the Federal Republic of Germany, from time to time may  
offer up to U.S.$3,000,000,000 (or its equivalent in other currencies or        
composite currencies or in amounts determined by reference to an index)         
aggregate principal amount of its debt securities consisting of bonds, notes    
and/or other evidences of indebtedness ("Securities"). These Securities will be 
unconditional obligations of Rentenbank.                                        

 Under our governing law, the Securities will be effectively backed by the
full faith and credit of the Federal Republic. See "Responsibility of the       
Federal Republic for Rentenbank".                                               

    For each offer and sale of Securities under this prospectus, we will provide
a prospectus supplement with the specific terms of each issue.                  

----------

NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES         
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE   
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS  
A CRIMINAL OFFENSE.                                                             

----------

 The date of this prospectus is September 18, 2002

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 TABLE OF CONTENTS

                                                                [Download Table]

                                                       PAGE
                                                           
PRESENTATION OF FINANCIAL DATA.......................     3
ABOUT THIS PROSPECTUS................................     3
PROSPECTUS SUMMARY...................................     4
RECENT DEVELOPMENTS..................................     7
USE OF PROCEEDS......................................    10
EXCHANGE RATE INFORMATION............................    10
CAPITALIZATION.......................................    11
BUSINESS.............................................    13
MANAGEMENT'S REPORT..................................    22
MANAGEMENT...........................................    29
EMPLOYEES............................................    32
SUPERVISION AND REGULATION...........................    33
DEBT RECORD..........................................    37
DESCRIPTION OF THE SECURITIES........................    38
RESPONSIBILITY OF THE FEDERAL REPUBLIC FOR RENTENBANK    43
GERMAN TAXATION......................................    44
UNITED STATES TAXATION...............................    46
PLAN OF DISTRIBUTION.................................    56
VALIDITY OF THE SECURITIES...........................    57
LIMITATIONS ON ACTIONS AGAINST THE FEDERAL REPUBLIC..    58
ENFORCEMENT OF CIVIL LIABILITIES AGAINST RENTENBANK..    58
AUTHORIZED REPRESENTATIVE IN THE UNITED STATES.......    58
OFFICIAL STATEMENTS AND DOCUMENTS....................    58
FURTHER INFORMATION..................................    58
INDEX TO FINANCIAL STATEMENTS........................   F-1
THE FEDERAL REPUBLIC OF GERMANY......................   G-1


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PRESENTATION OF FINANCIAL DATA

In this prospectus, references to "euro" or "euro" are to the single    
currency which was introduced as of January 1, 1999 at the start of the third   
stage of European economic and monetary union. In this prospectus, references to
"Deutsche Mark" or "DM" are to the former national currency unit of the Federal 
Republic of Germany, which was legal tender therein until December 31, 2001     
(from January 1, 1999 as a non-decimal sub-unit of the euro), and references to 
"U.S. dollars" or "$" are to United States dollars. See "The Federal Republic of
Germany -- Monetary and Financial System -- Foreign Exchange Rates and Controls"
for information regarding the rates of conversion of Deutsche Mark into United  
States dollars and other major currencies for the years 1997 and 1998 and for   
information regarding the rates of conversion of euro into United States dollars
and other major currencies for the period 1999 through 2001. See "Exchange Rate 
Information" for information regarding the rates of conversion of the euro into 
United States dollars for the period from January 1, 1999 through December 31,  
2001. On August 28, 2002, the Noon Buying Rate for cable transfers in New York  
City payable in euros was euro 1.00 = $0.9820.                                  

_________________ 

 ABOUT THIS PROSPECTUS

   This prospectus is part of a registration statement that we have filed with
the Securities and Exchange Commission ("SEC") utilizing a "shelf" registration 
process. Under this shelf process, we may sell any combination of the           
Securities described in this prospectus in one or more offerings up to the      
total dollar amount registered with the SEC (or the equivalent in other         
currencies). This prospectus provides you with a general description of the     
Securities we may offer. Each time we sell Securities, we will provide a        
prospectus supplement that will contain specific information about the terms of 
that offering. The prospectus supplement may also add, update or change         
information contained in this prospectus. You should read both this prospectus  
and any prospectus supplement before you invest.                                

 You should rely only on the information as provided in this prospectus or
any prospectus supplement. We have not authorized anyone else to provide you    
with different information. We are not making an offer of these Securities in   
any state where the offer is not permitted. You should not assume that the      
information in this prospectus or any prospectus supplement is accurate as of   
any date other than the date on the cover pages of these documents.             

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_______________________________________________________________________________ 

PROSPECTUS SUMMARY

    The following summary is qualified in its entirety by, and should be read in
conjunction with, the more detailed information appearing elsewhere in this     
prospectus.                                                                     

LANDWIRTSCHAFTLICHE RENTENBANK                                                  

   Landwirtschaftliche Rentenbank is an institution organized under public law
of the Federal Republic of Germany. Established in 1949, Rentenbank serves as   
the Federal Republic's central bank for providing financing to the agriculture, 
forestry, fishing, food industries and for rural development in Germany. Our    
activities and governance structure are regulated by our governing law, which   
provides that the principal purpose of the credit extended must be the          
promotion of agriculture and agribusiness. We carry out our activities          
primarily by extending medium and long-term credit to German and other European 
public and private sector banks. These banks, in turn, lend the money they have 
received from us to borrowers that are active in the agriculture, forestry,     
fishing and food industries. We also make loans to (1) financial institutions   
to finance rural development and infrastructure projects, (2) a limited number  
of German regional state governments and (3) specific agencies of the Federal   
Republic. Since 1994, Rentenbank has expanded some of its banking activities    
beyond Germany by extending credit to banks in other European Union countries.  
This expansion is consistent with our governing law and was approved by the     
banking commissioner of the Federal Republic responsible for our oversight.     

   Rentenbank's founding capital was raised through a public charge imposed on
agricultural land in Germany from 1949 to 1958. This charge was established by  
a federal law, the Law on the Rentenbank Land Charge (Gesetz uber die           
Rentenbankgrundschuld), dated May 11, 1949.                                     

As an instrumentality serving public policy objectives of the Federal   
Government, we are not subject to corporate income and trade tax and do not     
seek to maximize profits. At December 31, 2001, Rentenbank had total            
consolidated assets of approximately euro 59.2 billion.                         

Our headquarters are located at Hochstrasse 2, 60313 Frankfurt am Main, 
Germany, and our telephone number is 011-49-69-2107-0.                          

RELATIONSHIP WITH THE FEDERAL GOVERNMENT                                        

  As a creature of federal law, Rentenbank has no shareholders and Germany's
federal parliament exercises ultimate control over Rentenbank. For example, our 
governing law specifies the scope of our activities. The federal government     
exercises supervision of Rentenbank through a commissioner specifically charged 
with protecting the public interest and with ensuring that our business         
operations comply with our governing law and related federal laws. Moreover, we 
may only be liquidated pursuant to legislative action by the federal            
parliament.                                                                     

  Our obligations are effectively backed by the full faith and credit of the
Federal Republic. Under the German administrative law principle of              
Anstaltslast, or institutional liability, the Federal Republic is responsible   
for ensuring that we meet our obligations, including our publicly issued debt   
securities, or our guarantee of debt securities, should a substitute obligor be 
substituted for Rentenbank, when they are due. Under the Anstaltslast           
principle, the Federal Republic, as the government body that established        
Rentenbank, has an institutional liability to Rentenbank requiring the Federal  
Republic to safeguard our economic basis and to keep us in a position to pursue 
our operations and enable us, in the event of financial difficulties, to        
perform our obligations when due. Anstaltslast is not a formal guarantee of     
Rentenbank's obligations by the Federal Republic, and our creditors do not have 
a direct claim against the Federal Republic under it. However, the Federal      
Republic is required on its own authority to take steps to enable us to perform 
our obligations when due. Moreover, under German law, we would be required to   
enforce our rights against the Federal Republic in the event we needed to do so 
in order to meet our obligations to third parties, including security holders.  
The obligation of the Federal Republic under Anstaltslast would constitute a    
charge on public funds that, as a legally established obligation, would be      
payable without the need for any appropriation or any other action by the       
federal parliament. For additional information on Anstaltslast, see "Recent     
Developments -- European Commission and Status of Anstaltslast".                

_______________________________________________________________________________ 

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_______________________________________________________________________________ 

LANDWIRTSCHAFTLICHE RENTENBANK -- SELECTED CONSOLIDATED FINANCIAL DATA          

   The selected balance sheet and profit and loss account data presented below
are derived from the financial statements included elsewhere in this            
prospectus. In order to facilitate a clear presentation, certain line items in  
the financial statements have been combined for purposes of the selected        
financial data as described in the footnotes below. The selected consolidated   
financial data presented below should be read in conjunction with and are       
qualified in their entirety by reference to the financial statements and notes  
thereto and "Management's Report" included elsewhere in the prospectus. The     
financial statements have been prepared in accordance with generally accepted   
accounting principles in Germany ("German GAAP"). German GAAP relevant to       
Rentenbank differs in various material respects from U.S. generally accepted    
accounting principles ("U.S. GAAP"). For a discussion of significant            
differences between German GAAP and U.S. GAAP as they relate to Rentenbank, see 
"Summary of Material Differences between German GAAP and U.S. GAAP". Rentenbank 
has translated certain amounts from prior periods into euro using the official  
exchange rate of EUR 1 = DM 1.95583.                                            

                                                                [Download Table]

                                                       AS OF DECEMBER 31,     
                                                  ----------------------------
                                                    2001      2000      1999  
                                                  --------  --------  --------

                                                        (EUR IN MILLIONS)     
                                                                              
BALANCE SHEET DATA:                                                           
ASSETS                                                                        
Cash reserves...................................       0.1       0.4       0.4
Loans and advances to banks.....................  41,600.8  35,830.7  32,319.4
Loans and advances to customers.................   2,370.9   2,141.5   1,822.8
Bonds and other fixed-interest securities.......  14,762.5  12,986.5  12,213.6
Shares and other variable-yield securities......       2.8       7.9      10.2
Investments and shares in affiliated enterprises     173.0     172.6     173.7
Trust assets....................................     192.6     198.6     203.3
Other assets(1).................................      58.8     136.1     148.0
                                                  --------  --------  --------

Total assets....................................  59,161.5  51,474.3  46,891.4
                                                  ========  ========  ========

LIABILITIES AND EQUITY                                                        
Liabilities to banks............................  16,775.1  15,341.9  17,689.9
Liabilities to customers........................   4,605.5   4,883.9   5,093.9
Certificated liabilities(2).....................  35,207.5  28,685.1  21,605.3
Trust liabilities...............................     192.6     198.6     203.3
Other liabilities(3)............................     262.6     336.7     255.5
Subordinated liabilities........................     880.6     886.4     913.4
Profit participation rights.....................       0.0       0.0      76.7
Funds for general banking risks.................     555.0     485.0     421.8
Equity (subscribed capital and reserves)........     682.6     656.7     631.6
                                                  --------  --------  --------

Total liabilities and equity....................  59,161.5  51,474.3  46,891.4
                                                  ========  ========  ========


----------                                                                      
(1) Includes  public  sector recovery  claims,  fixed assets,  other assets  and
deferred income.                                                        

(2) Consists of debt securities, bonds and notes issued.                        

(3) Includes  other liabilities,  Edmund Rehwinkel  Foundation,  deferred income
and accrued expenses.                                                   

_______________________________________________________________________________ 

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_______________________________________________________________________________ 

SELECTED CONSOLIDATED FINANCIAL DATA

                                                        [Enlarge/Download Table]

                                                                         FOR THE YEAR ENDED    
                                                                            DECEMBER 31,       
                                                                     ------------------------- 
                                                                       2001     2000     1999  
                                                                     -------  -------  ------- 

                                                                         (EUR IN MILLIONS)     
                                                                                               
PROFIT AND LOSS ACCOUNT DATA:                                                                  
Interest income(1).................................................  2,950.4  2,653.4  2,227.0 
Interest expense...................................................  2,781.5  2,502.9  2,074.6 
                                                                     -------  -------  ------- 

Net interest income................................................    168.9    150.5    152.4 
Net commission income..............................................     (0.3)    (0.3)    (0.3)
Other income(2)....................................................      2.3      4.4      7.5 
General administrative expenses and other expenses(3)..............    (39.7)   (38.5)   (32.5)
                                                                     -------  -------  ------- 

Operating income (before risk provisions and valuation adjustments)    131.2    116.1    127.1 
Risk provisions and valuation adjustments, net(4)..................    (97.1)   (83.2)   (95.2)
                                                                     -------  -------  ------- 

Pre-tax income.....................................................     34.1     32.9     31.9 
Taxes..............................................................     (0.1)    (0.2)    (0.2)
                                                                     -------  -------  ------- 

Net income.........................................................     34.0     32.7     31.7 
                                                                     =======  =======  ======= 


----------                                                                      
(1) Includes   interest   income   from   lending   operations,   money   market
transactions, fixed interest securities and debt register claims and    
  current income from shares and other variable-yield securities, investment
holdings and shares in affiliated companies.                            

(2) Includes net revenue from financial operations and other operating income.  

(3) Includes  depreciation and valuation adjustments on  intangible and tangible
assets, extraordinary expenditures and other operating expenses.        

(4) Includes  (a) depreciation  and valuation adjustments  on loans  and certain
securities as well as allocations to reserves for lending operations,   
allocations to the fund for general banking risks and depreciation and  
   valuation adjustments relating to investment holdings, shares in affiliated
companies and securities treated as fixed assets, less (b) income from  
write-ups on loans and certain securities and from write-downs of       
   provisions for the lending business and income from write-ups on investment
holdings, shares in affiliated companies and securities treated as fixed
assets.                                                                 

_______________________________________________________________________________ 

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 RECENT DEVELOPMENTS

LANDWIRTSCHAFTLICHE RENTENBANK -- SUMMARY FINANCIAL AND OTHER INFORMATION FOR   
FISCAL YEAR 2001                                                                

    Our 2001 financials were reviewed and approved by our general meeting on May
8, 2002. The following is a summary of this information.                        

 The following information reflects the financial condition and results of
operations of Rentenbank only on an unconsolidated basis. See                   
"Landwirtschaftliche Rentenbank -- Business -- Subsidiaries" below.             

                                                                [Download Table]

                                            AS OF    
                                           DECEMBER  
                                              31,    
                                           ----------
                                           2001  2000
                                           ----  ----
                                             (EUR IN 
                                            BILLIONS)
                                                     
CONSOLIDATED BALANCE SHEET DATA                      
Total assets.............................  59.2  51.5
Loans and advances to banks..............  41.6  35.8
Bonds and other fixed-interest securities  14.8  13.1
Liabilities to banks.....................  16.8  15.3
Certificated liabilities(2)..............  35.2  28.7
Capital resources(3).....................   2.1   2.0


----------                                                                      
(2) Consist of debt securities, bonds and notes issued.                         

(3) Include   subordinated  liabilities,  profit   participation  rights,  funds
covering general banking risks and equity (subscribed capital and       
reserves).                                                              

                                                                [Download Table]

                                                                     FOR THE YEAR
                                                                         ENDED   
                                                                     ------------
                                                                      2001   2000
                                                                     -----  -----

                                                                        (EUR IN  
                                                                       MILLIONS) 
                                                                                 
CONSOLIDATED PROFIT AND LOSS ACCOUNT DATA                                        
Net interest income and net commission income......................  168.6  150.2
General administrative expenses....................................   36.7   32.4
Operating income (before risk provisions and valuation adjustments)  131.2  121.2


NEW BUSINESS                                                                    

Our new loan commitments for medium- and long-term extensions of credit 
increased from euro 9,611 million in 2000 to euro 11,058 million on an          
unconsolidated basis for the year ended December 31, 2001. We extend credit     
both by making traditional loans and by purchasing issuances of bonds and other 
fixed interest securities from German and other European Union banks. For more  
information regarding our new loan commitments, see "Business-Loans to Banks    
and Customers -- New Business".                                                 

EUROPEAN COMMISSION AND STATUS OF ANSTALTSLAST                                  

On March, 1, 2002, representatives of the German Government and the EU- 
Commission reached an understanding on the treatment of State guarantees for    
federal development banks such as Rentenbank for purposes of the European Union 
State aid rules. The contents of the understanding were summarized in a press   
release issued by the parties which reads as follows:                           

"Common press statement on the understanding on Anstaltslast and  
Gewahrtragerhaftung for special credit institutions               

Member of the European Commission, Mario Monti, responsible for   
     competition, State-Secretary in the German Federal Ministry of Finance,
      Caio Koch-Weser, Chairman of the Managing Board of the Kreditanstalt fur
       Wiederaufbau (KfW), Hans Reich, as well as the German Federal Association
    of Public Banks (VOB) have today reached an agreement on the treatment
under the State Aid rules of State guarantees -- Anstaltslast,    
  Gewahrtragerhaftung and refinancing guarantees -- for German special
credit institutions.                                              

     The important issues of the continuance of State guarantees for special
    credit institutions and the difficult delimitation between promotional
tasks and commercial activities could hereby be solved.           

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    Consequently, the continuance of State guarantees is lastingly ensured
for the performance of public promotional activities. The future  
   orientation of special credit institutions with promotional tasks and
commercial activities is regulated in a clear way.                

The agreement contains the following essential elements:          

The use of advantages for special credit institutions immanent to 
  Anstaltslast and other State guarantees relevant under the State aid
      rules is allowed for the performance of promotional tasks at the request
       of the State in promotional areas like financing of SMEs, infrastructure,
   environment-friendly investment, housing as well as co-operation with
    developing countries. The promotional tasks are to be specified in the
legal texts.                                                      

      Activities, which do not fall under the areas in line with the State aid
      rules, must be either discontinued by the special credit institutions or
      hived off to legally independent subsidiaries without State support. The
 time limit for the legally binding specification of the legislative
      framework for special credit institutions (e.g. promotional missions) is
       31st March 2004. The hiving off must be achieved by 31st December 2007 at
 the latest. In particular in the interest of capital markets, it is
      clarified in the understanding that the application of the general State
aid rules will not have an effect on the continuance of the State 
guarantees as such.                                               

The understanding on special credit institutions supplements the  
   understanding on Landesbanken and savings banks of 17th July 2001. It
 therefore concludes the discussion on competition aspects regarding
  Anstaltslast and Gewahrtragerhaftung for public credit institutions.

Brussels, on 1st March 2002"                                      

    Based on the foregoing, Rentenbank does not currently expect that it will be
required to either discontinue or separately incorporate any material portion   
of its present business activities as a result of the understanding.            

GOVERNING LAW                                                                   

Rentenbank's governing was recently updated to specify more clearly     
Rentenbank's role and objectives as an instrumentality of public policy active  
in the agricultural sector of the Federal Republic. A further objective was to  
comply with the Federal Government's intention to increase the Federal          
influence on Rentenbank as a Federal development bank through increased federal 
governmental representation on the Advisory Board. Representatives from the     
Federal Ministry of Consumer Protection, Food and Agriculture and the Federal   
Ministry of Finance will be added to the advisory board's new composition. At   
the same time, the number of state agricultural, farming and trade union        
representatives will be reduced. The number of advisory board members will be   
reduced from the current 31 to 18, starting with the next term of the advisory  
board beginning in May 2004.                                                    

Additionally, the amended text of the law provides explicitly for the   
promotion of agriculture and its related areas and of rural areas including     
environmental protection related to agriculture, the promotion of renewable     
energy and resources, the diffusion of organic agriculture and the promotion of 
animal protection.                                                              

    The Act was published in the Federal Gazette (Bundesgesetzblatt) on July 29,
2002 and is effective as of August 1, 2002.                                     

RECENT BOND ISSUANCE                                                            

Under our US$ 35 billion Euro Medium-Term Note Program we issued euro 1 
billion 5.00% Notes due August 17, 2007 on April 18, 2002, US$ 500 million      
4.375% Notes on May 31, 2002 and euro 300 million 4.125% Notes due January 24,  
2005 on June 10, 2002 (an increase of existing euro 1.25 billion 4.125% Notes   
due January 24, 2005 issued in two tranches on January 24, 2002 and March 11,   
2002), US$ 500 million 4.625% Notes due December 14, 2007 on July 15, 2002 and  
euro 500 million 4.25% Notes due December 22, 2005 on July 29, 2002. For more   
information regarding our Euro Medium-Term Note Program, see "Business-Sources  
of Funds".                                                                      

FEDERAL REPUBLIC OF GERMANY                                                     

FLOODING                                                                        

   In August 2002, severe flooding occurred in parts of Germany, mainly in the
southern and eastern Lander, causing substantial damage. Although it is still   
too early to assess the precise extent of the damage and the potential impact   
on the German economy, preliminary estimates indicate that the damage will be   
in the billions of euros. In response to the flooding, the German government    
has decided to, among other                                                     

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things, postpone by one year the next stage of the ongoing tax reform that was  
scheduled to take effect in 2003. The Federal Government expects that this      
measure will yield additional tax revenues in the amount of approximately euro  
6.9 billion, which it intends to use to provide financial assistance to the     
flood victims. The Federal Government believes that the proposed measures will  
not cause it to violate the deficit criteria of the European Stability and      
Growth Pact.                                                                    

(Source: http://eng.bundesregierung.de/dokumente/Artikel/ix_432478_4317.htm;    
http://eng.bundesregierung.de/dokumente/Artikel/ix_432453.htm?)               

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 USE OF PROCEEDS

    As may be more specifically described in the relevant prospectus supplement,
the net proceeds from the sale of the Securities will be used to finance our    
lending activities as described in this prospectus, including the refinancing   
of existing liabilities.                                                        

 EXCHANGE RATE INFORMATION

  Because the euro did not exist prior to January 1, 1999, we cannot present
actual exchange rates between the euro and the U.S. dollar for any period prior 
to that date. Accordingly, for these prior periods we present U.S. dollar       
exchange rates for the Deutsche Mark, one of the legacy currencies of the euro. 
The following table shows the period end, average, high and low noon buying     
rates for Deutsche Mark, expressed in Deutsche Mark per $1.00, for the periods  
and the dates indicated. The official fixed rate of the Deutsche Mark per euro  
is euro 1.00-DM1.95583. No representation is made that the Deutsche Mark or U.S.
dollar amounts referred to herein could have been or could be converted into    
U.S. dollars or Deutsche Mark, as the case may be, at any particular rate.      

                                                                [Download Table]

                  YEARS ENDED DECEMBER 31,       
           --------------------------------------
           PERIOD END  AVERAGE(1)   HIGH     LOW 
           ----------  ----------  ------  ------

                                                 
1996.....      1.5387      1.5070  1.5655  1.4354
1997.....      1.7991      1.7394  1.8810  1.5413
1998.....      1.6670      1.7859  1.8542  1.6060


----------                                                                      
(1) The average  of the noon buying rates on the last business day of each month
during the relevant period.                                             

  The following table shows the period end, average high and low noon buying
rates for euro, expressed in U.S. dollars per euro 1.00 for 1999 through 2001.  
No representation is made that the euro or U.S. dollar amounts referred to      
herein could have been or could be converted into U.S. dollars or euros, as the 
case may be, at any particular rate.                                            

                                                                [Download Table]

                              --------------------------------------
                              PERIOD END  AVERAGE(1)   HIGH     LOW 
                              ----------  ----------  ------  ------

                                                                    
Year ended December 31, 1999      1.0070      1.0558  1.1812  1.0016
Year ended December 31, 2000      0.9388      0.9207  1.0335  0.8270
Year ended December 31, 2001      0.8901      0.8909  0.9535  0.8370


----------                                                                      
(1) The average  of the noon buying rates on the last business day of each month
during the relevant period.                                             

    There are, except in limited embargo circumstances, no legal restrictions in
the Federal Republic on international capital movements and foreign exchange    
transactions. However, for statistical purposes only, every individual or       
corporation residing in the Federal Republic, including Rentenbank, must report 
to the Deutsche Bundesbank, the German Central Bank, subject to a number of     
exceptions, any payment received from or made to an individual or a corporation 
resident outside of the Federal Republic if this payment exceeds euro 12,500 or 
the equivalent in a foreign currency.                                           

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CAPITALIZATION

The following table shows Rentenbank's capitalization on a consolidated 
basis as of December 31, 2001. Long-term borrowings include all borrowings and  
bonds issued with remaining maturities in excess of one year.                   

                                                                [Download Table]

                                    AS OF   
                                DECEMBER 31,
                                    2001    
                                ------------

                                   (EUR IN  
                                MILLIONS)(1)
                                            
Long-term borrowings from:                  
 Banks .......................         5,202
 Other lenders ...............         4,090
                                ------------

   Total long-term borrowings.         9,292
 Bonds .......................        24,829
                                ------------

   Total long-term debt.......        34,121

Subordinated liabilities......           881
Fund for general banking risks           555
Equity                                      
 Subscribed capital ..........           135
 Reserves(2) .................           548
                                ------------

   Total equity...............           683
                                ------------

   Total capitalization.......        36,240
                                ============


----------                                                                      
(1) On  August 28, 2002,  the noon buying rate  for cable transfers in  New York
City was euro .9820 per U.S. Dollar.                                    

(2) Includes  principal reserve, guarantee reserve,  other reserves, differences
from capital consolidation and net profit for the year.                 

As of December 31, 2001, Rentenbank's Core Capital (or Tier I) ratio    
amounted to 9.2% and its Supplementary Capital (or Tier II) ratio amounted to   
6.0%. For a discussion of capital adequacy requirements under the Banking Act,  
see "Supervision and Regulation -- Capital Adequacy Requirements".              

There has been no material change in our capitalization since June 29,  
2002.1                                                                          

----------                                                                      
(1) During  the  course  of  2001 the  Bank  issued  EUR  28.8 billion  of  debt
represented by the following instruments:                               

                                                                [Download Table]

                                      EUR     
                                 -------------

                                 (IN BILLIONS)
                                              
(a)    Promissory note loans ..            0.2
(b)    Registered bonds .......            0.4
(c)    Bearer bonds ...........           28.2
             of which - secured            1.1
                      - unsecured         27.1


During the course of the period from 1st January, 2002 to 31st May, 2002, 
the Bank issued EUR 12.2 billion of debt represented by the following           
instruments:                                                                    

                                                                [Download Table]

                                      EUR     
                                 -------------

                                 (IN BILLIONS)
                                              
(a)    Promissory note loans ..            0.1
(b)    Registered bonds .......            0.2
(c)    Bearer bonds ...........           11.9
             of which - secured            0.0
                      - unsecured         11.9


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The following table shows the amount of our long-term borrowing, on an  
unconsolidated basis, that is secured:                                          

                                                                [Download Table]

                                                       AS OF   
                                                   DECEMBER 31,
                                                       2001    
                                                   ------------

                                                      (EUR IN  
                                                     MILLIONS) 
                                                               

Agricultural Bonds (Landwirtschaftsbriefe).......         2,939
Medium-Term Fixed Rate Notes (Kassenobligationen)            89
Due to Banks (registered bonds)..................         3,777
Other lendings (registered bonds)................         3,382
                                                   ------------
Total............................................        10,187
                                                   ============


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BUSINESS

OVERVIEW                                                                        

INTRODUCTION                                                                    

   Rentenbank was founded in 1949 as the development bank for the agriculture,
forestry, fishing and food industries in Germany. We are an institution         
established under public law (rechtsfahige Anstalt des offentlichen Rechts) and 
have our headquarters in Frankfurt am Main. We do not have any branches.        

   Our activities and governance structure are regulated by our governing law.
Under this governing law, we are charged with providing loans and other types   
of financing for the agriculture and the food industries, including fisheries   
and forestry. We carry out our statutory activities primarily by extending      
medium and long-term credit to German and other European public and private     
sector banks, both by means of traditional loans and by purchasing issuances of 
banks' bonds and other fixed-interest securities. These banks, in turn, lend    
the money they have received from us to end-borrowers that are active in the    
agriculture, forestry, fishing and food industries. We also make loans to (1)   
financial institutions for the financing of rural development and               
infrastructures projects, (2) a limited number of German regional state         
governments and (3) specific agencies of the Federal Republic. As an            
instrumentality serving public policy objectives of the Federal Government, we  
are not subject to corporate income and trade tax and do not seek to maximize   
profits.                                                                        

  With the emergence of the single European market, in 1994 we granted loans
for the first time at prevailing market rates to credit institutions in other   
countries of the European Union. Although there is no provision in our          
governing law that restricts the granting of loans just to credit institutions  
in Germany, this step was taken only after consultation with the banking        
commissioner responsible for Rentenbank. The commissioner consented to the      
broadening of Rentenbank's borrowers on the conditions that (1) no preferential 
loans may be extended to credit institutions in other European Union member     
states, and (2) the emphasis of Rentenbank's loan business remain within        
Germany. We have followed these requirements and our governing law as we have   
expanded our activities.                                                        

   Rentenbank's founding capital was raised through a public charge imposed on
agricultural land in Germany from 1949 to 1958. This charge was established by  
a federal law, the Law on the Rentenbank Land Charge (Gesetz uber die           
Rentenbankgrundschuld), dated May 11, 1949.                                     

At December 31, 2001, Rentenbank had total consolidated assets of       
approximately euro 59.2 billion. Under German law, we prepare financial         
statements on both a consolidated and an unconsolidated basis. Throughout this  
prospectus, we discuss our consolidated financial information unless we note    
otherwise. For more information on our unconsolidated statements, see our       
financial statements and the notes thereto beginning on page F-1.               

LIABILITY FOR THE OBLIGATIONS OF RENTENBANK                                     

 Rentenbank benefits from the Anstaltslast, or institutional liability, of
the Federal Republic. This means that the Federal Republic will (1) safeguard   
the economic basis of Rentenbank, (2) keep it in a position to pursue its       
operations throughout its existence as a statutory body under public law and    
(3) in the event of financial difficulties, enable it by financial contribution 
or in some other appropriate manner to perform its obligations when due,        
including the Securities or our guarantee of the Securities if a substitute     
obligor is substituted for Rentenbank. This duty under public law exists solely 
as between the Federal Republic and Rentenbank and not between the Federal      
Republic and any third party. The Federal Republic would not, under             
Anstaltslast, be permitted to allow us to default on an obligation; the Federal 
Republic would be required on its own authority to take steps to enable us to   
perform our obligation when due. Moreover, under German law, we would be        
required to enforce our rights against the Federal Republic in the event we     
needed to do so in order to meet our obligations to third parties, including    
security holders. Accordingly, while Anstaltslast does not constitute a formal  
guarantee of our obligations by the Federal Republic and our creditors do not   
have a direct claim against the Federal Republic under Anstaltslast, the effect 
of Anstaltslast is that our obligations, including our obligations to the       
holders of Securities, are fully backed by the credit of the Federal Republic.  
The obligation of the Federal Republic under Anstaltslast would constitute a    
legally established charge on public funds that would be payable without the    
need for appropriation or any action by the German parliament. For additional   
information on Anstaltslast, see "Recent Developments -- European Commission    
and Status of Anstaltslast.                                                     

SUPERVISION OF RENTENBANK BY THE FEDERAL REPUBLIC                               

   Our governing law prescribes our internal governance structure, our capital
structure, the limited scope and nature of our lending activities and provides  
for supervision of us by the Federal Republic.                                  

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Although our day-to-day operations are managed independently by our management  
board under the supervision of the advisory board, the Federal Republic has the 
right to appoint a supervisory commissioner and deputy commissioner to exercise 
federal control and supervision over us. Both the commissioner and deputy       
commissioner are Federal Republic officials. The commissioner is appointed by   
the Federal Ministry for Consumer Protection, Food and Agriculture and the      
deputy commissioner is appointed by the Federal Ministry of Finance. The        
statutory functions of the commissioner include, among other things, ensuring   
that we adhere to our governing law and our statutes and that loans are made    
only to qualified borrowers. It is this commissioner that approved the expansion
of our lending activities to banks in other European Union countries. In order  
to fulfill their statutory duties, the commissioner and deputy commissioner have
full investigative powers as well as the power to convene meetings of the       
management board, the advisory board and a general meeting and to submit        
resolutions to those bodies. The commissioner is also entitled to prohibit the  
performance of directives and resolutions which would violate the laws of the   
Federal Republic or our statutes. See "Management -- Management Board, --       
Advisory Board, -- General Meeting".                                            

 We are also subject to supervision and regulation by the German Financial
Supervisory Authority (Bundesanstalt fur Finanzdienstleistungsaufsicht) under   
the German Banking Act (Gesetz uber das Kreditwesen). See "Supervision and      
Regulation" and "The Federal Republic of Germany -- Financial Supervisory       
Authority".                                                                     

BUSINESS                                                                        

  Our principal business is providing loans and other types of financing for
the German agricultural and food industries, including fisheries and forestry,  
and for rural development in Germany. We do so primarily by extending credit to 
German public and private sector banks, both by means of traditional loans and  
by purchasing issuances of banks' bonds and other fixed-interest securities.    
These banks then lend the proceeds to eligible borrowers. We also lend to other 
European Union banks. Our governing law also authorizes us to lend directly to  
borrowers engaged in activities that are important to German agricultural       
production. Nevertheless, other than direct lending to certain affiliates, a    
limited number of German regional state governments and specific agencies of    
the Federal Republic, our policy is to lend exclusively to financial            
institutions.                                                                   

Throughout this prospectus and in our financial statements, we classify 
short-term loans as those due within one year from origination, medium-term     
loans as those due from between one year and five years from origination, and   
long-term loans as those due after five years from origination.                 

We provide credit to banks to be loaned to borrowers engaged in the     
following activities:                                                           

     *     Agriculture, Forestry and Fishing. This sector includes borrowers
         engaged in all types of agricultural production (including wine
     production and horticulture), forestry and fishing. It also
  includes borrowers engaged in related businesses such as
            manufacturers and distributors of machinery, fertilizers and other
        goods used in farming, forestry and fishing and commercial and
         service businesses with close links to agriculture and forestry
             (for example, those trading in rural products, timber, livestock or
agricultural equipment).                              

       *     Food Industry. Eligible borrowers in this sector include businesses
            involved in the processing or distribution of food products in all
           market segments, including businesses in the commodity and luxury
food industries and the food trade.                   

     *     Rural Infrastructure. This category covers lending for activities
            intended to improve rural infrastructure, including drinking water
      treatment and distribution, sewage and waste treatment, land
         consolidation, environmental protection, public transportation,
            housing and job creation and protection in rural communities. As a
            rule, eligible projects must be in communities with populations of
less than 50,000.                                     

       *     Local Government Authorities in Rural Areas. Loans may also be made
             to local governments and other public agencies and authorities such
            as water and sewage treatment boards and other public utilities in
communities with populations of less than 50,000.     

    Although we provide credit to banks which make loans to borrowers engaged in
these activities, we do not separately record in our financial statements the   
loan amounts that are extended for each of the above named activities.          

LOANS TO BANKS AND CUSTOMERS                                                    

We extend credit and earn income by making traditional loans and by     
purchasing bonds and other fixed-interest securities from German and other      
European Union banks. Our traditional loan portfolio                            

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consists primarily of loans to financial institutions that are made on a        
market-rate basis. These market-rate loans are made to German and European Union
private sector banks and accounted for 85.4% of our loan portfolio at December  
31, 2001. For a further description of our traditional lending activities, see  
"-Loan Portfolio" below.                                                        

A major portion of our loans to non-financial institutions is the credit
facility we have extended to the Federal Agency for Agriculture and Food        
(Bundesanstalt fur Landwirtschaft und Ernahrung) in connection with its         
implementation of European Union agricultural policies (see "-- Market-Rate     
Short-Term Loans" below).                                                       

New Business                                                                    

    The following table shows our new loan commitments for medium- and long-term
extensions of credit for the years ended December 31, 2001 and 2000.            

                                                                [Download Table]

                                                                      FOR THE YEAR
                                                                         ENDED    
                                                                      DECEMBER 31,
                                                                     -------------
                                                                      2001    2000
                                                                     ------  -----

                                                                        (EUR IN   
                                                                       MILLIONS)  
                                                                                  

Loan commitments(1)................................................   7,665  6,820
 New market-rate loan commitments .................................   3,834  4,162
 New preferential loan commitments ................................   1,264    928
 Renewals .........................................................   2,567  1,730
Purchases of issuances of bonds and other fixed-interest securities   3,393  2,791
                                                                     ------  -----

Total medium- and long-term extensions of credit...................  11,058  9,611
                                                                     ======  =====


----------                                                                      
(1) Loan  commitments represent  the volume of  funds committed in  the relevant
period, including amounts to be disbursed in future periods, and do not 
 include amounts disbursed in the relevant periods pursuant to commitments
made in prior periods.                                                  

LOAN PORTFOLIO                                                                  

    The following table shows, on an unconsolidated basis, the preferential loan
portions of our loan portfolio and the geographic placement of our market-rate  
loans at December 31, 2001 and 2000.                                            

                                                                [Download Table]

                                AT DECEMBER 
                                    31,     
                              --------------
                               2001    2000 
                              ------  ------

                                  (EUR IN   
                                 MILLIONS)  
                                            
Preferential Loans..........   6,214   5,779
Market-Rate Loans:                          
 Inside Germany.............  24,450  21,634
 In Other European Countries  11,901   9,374
                              ------  ------

Total.......................  42,565  36,787
                              ======  ======


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    The following table provides, on an unconsolidated basis, a breakdown of our
loan portfolio according to maturity at December 31, 2001 and 2000.             

                                                                [Download Table]

                                                  AT DECEMBER 
                                                      31,     
                                                --------------
                                                 2001    2000 
                                                ------  ------

                                                              

Loans to other Financial Institutions:                        
 Long-term (five years or more)...............  11,128  11,046
 Medium-term (between one year and five years)  12,676  10,969
 Short-term (less than one year)..............  16,388  12,581
Direct Loans:                                                 
 Long-term (five years or more)...............     176     184
 Medium-term (between one year and five years)      88     121
 Short-term (less than one year)..............   2,109   1,886
                                                ------  ------

Total.........................................  42,565  36,787
                                                ======  ======


 Our portfolio of traditional loans consists primarily of medium and long-
term loans that are made either at a market-rate or on a preferential-rate      
basis, as well as market-rate short-term loans. As noted above, we classify     
short-term loans as those due within one year from origination, medium-term     
loans as those due from between one year and five years from origination, and   
long-term loans as those due after five years from origination. Our loan        
portfolio at December 31, 2001 totaled euro 42.6 billion, an increase of 15.7%  
from euro 36.8 billion at December 31, 2000. At December 31, 2001, this loan    
portfolio represented 72.0% of our total assets.                                

   The market-rate portion of the loan portfolio, which accounted for 85.4% of
the loan portfolio at December 31, 2001 compared with 84.3% of the loan         
portfolio at December 31, 2000, is composed of secured and unsecured loans to   
German and European Union public sector and private sector banks. Some public   
sector borrowers benefit from institutional liability or an explicit statutory  
guaranty (Gewahrtragerhaftung) of a state government or the Federal Republic.   
Landesbanken, public universal banks, and Sparkassen, a type of public savings  
bank benefiting from institutional liability (Anstaltslast) and an explicit     
statutory guarantee of their founders (typically German local or regional       
governments), are the principal German public sector banks to which we lend.    
Market-rate medium- and long-term loans are essentially wholesale, interbank    
loans made on commercial terms and conditions reflecting prevailing market      
conditions.                                                                     

 Generally, once a financial institution has qualified to be a borrower of
our market-rate loans, that financial institution is free to apply with us for  
loans to be on-lent for purposes related to the areas of agricultural and food  
industries, fisheries, forestry, and for rural development in Germany. However, 
there is no further certification made by either the end-borrower or the        
borrowing bank that the funds were used for these purposes. For more            
information on our review process for approving borrowing banks, see "--        
Participating Financial Institutions" below.                                    

    The preferential portion of the loan portfolio, which accounted for 14.6% of
the loan portfolio at the end of 2001 compared with 15.7% of the loan portfolio 
at the end of 2000, is composed exclusively of secured loans to German public   
and private sector banks. Preferential medium- and long-term loans are made to  
German banks which on-lend the proceeds to end-borrowers who meet the           
qualifications under one of our special lending programs designed to further    
agriculture-related policy goals. The interest rate on these loans is generally 
close to our own cost of funds and the terms and conditions of the              
corresponding loan made to the end-borrower are more favorable to the end-      
borrower than would otherwise be commercially obtainable.                       

Market-Rate Medium- and Long-Term Loans                                         

 Borrowing terms on market-rate medium- and long-term loans are negotiated
with each bank and reflect, among other things, an evaluation of the bank's     
creditworthiness and prevailing market conditions. In our risk evaluation, we   
consider, among other things, the term of the loan, the creditworthiness of the 
bank, our existing credit exposure to the particular borrower and, if           
applicable, the country risk. We conduct an annual review of roughly 1,700      
private and public sector bank borrowers to ensure that these borrowers continue
to meet minimum credit standards. Because, under the terms of our loans, we do  
not have recourse against the end-borrower, we rely on the creditworthiness of  
the intermediating financial                                                    

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institution and our credit analysis does not generally extend to an analysis    
of the end- borrower (see "-- Credit Analysis").                                

    At December 31, 2001, approximately 57% of our market-rate medium- and long-
term loan portfolio was unsecured. Unsecured loans to German and other European 
private sector banks are made only after a thorough review of the borrower's    
creditworthiness.                                                               

In recent years, we have begun to make market-rate medium- and long-term
loans to European Union public and private sector banks. As explained above in  
"-- Introduction", this expansion is consistent with our governing law.         
Although there is no legal restriction on the amount of funds we may lend into  
any one country, as a matter of internal policy we have set aggregate lending   
limits for each country of the European Union that we lend into. As of December 
31, 2001, loans to non-German financial institutions comprised approximately    
28% of the loan portfolio and, in the year ended December 31, 2001, these loans 
represented about 24.2% of all new market-rate medium- and long-term loans. The 
average original term of loans to banks in the European Union is approximately  
5-7 years, somewhat shorter than the average original term of loans to German   
banks (roughly 10-12 years).                                                    

Market-Rate Short-Term Loans                                                    

The bulk of our market-rate short-term lending consists of loans made to
banks and other financial institutions in the wholesale markets.                

Loans to the Federal Agency for Agriculture and Food (Bundesanstalt fur 
Landwirtschaft und Ernahrung or "BLE"), the Federal Republic's agency           
responsible for implementing European Union agricultural policies, accounted    
for nearly all of our market-rate short-term lending to non-financial           
institutions at December 31, 2001. Under the BLE credit facility, we provide    
financing for the purchase and storage of commodity foodstuffs and animal feed. 
The credit extended to BLE is guaranteed by the Federal Republic. We also       
provide other financial services to BLE. See "-- Activities on Behalf of the    
Federal Republic and Lander Governments".                                       

Special Loan Programs                                                           

   Preferential loans consist exclusively of medium and long-term loans. These
loans are extended under one of four special programs designed to further       
specific policy goals defined by our advisory board. Borrowers must meet        
requirements to borrow under one of these programs. Unlike our market-rate      
loans, where banks we lend to review the applicant and make the final approval  
decision to extend a loan to the end-borrower, under our special loan programs  
we check the end-borrower's eligibility and make the final loan decision.       

   Through these preferential loans, we reduce the interest rates of our loans
to specific groups in order to further our promotional objectives. For the year 
ending December 31, 2001, we set aside a total of euro 32.6 million for these   
loans, 19.9% more than in 2000. These programs and their requirements include:  

     *     "Agriculture" and "Young Farmers" programs. Under these programs,
            we finance medium- and long-term loans to individual end-borrowers
        who (1) lease or own small farms, (2) meet the definition of a
             farming operation under the German tax code, and (3) in the case of
            the "Young Farmers" program, are under 40 years of age. The use of
            these loan proceeds is restricted to purchasing or modernizing new
            farm equipment and buildings, purchasing new land or purchasing an
             existing farming operation. Loans under this program are limited to
             euro 500,000 per person per year (approximately 72% of preferential
loans made during the year ended December 31, 2001);  

    *     "Village Renewal" program. Under this program, we make available
      medium- and long term loans to private individuals and rural
             municipalities for the preservation and restoration of agricultural
        buildings. The use of loan proceeds is restricted to restoring
             agricultural buildings (even if they are no longer used for farming
           activities), construction of buildings related to the improvement
            of cultural or recreational pursuits in rural areas (such as youth
          centers) and activities related to creating or retaining jobs in
           rural areas. Loans under this program are limited to euro 500,000
      per organization or person per year (approximately 5% of new
           preferential loans made during the year ended December 31, 2001);
and                                                   

    *     "Rural Structural Measures" program. Under this program, we make
           available medium- and long-term loans to rural municipalities for
          infrastructure development projects. The use of loan proceeds is
        restricted to improvements of local infrastructure such as the
        construction of waste treatment facilities, the development of
           regional tourism through the construction of parks, harbors, camp
       grounds and public baths and in some cases the enhancement of
community                                             
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            services such as day care centers, fire protection,  medical clinics
            and the energy  supply. Loans under this program are limited to euro
   2.5  million per entity per year (approximately  23% of new
         preferential loans made during the year ended December 31, 2001).

 Although we review the applications and make the final decision to extend
credit, preferential loans, like market-rate loans, are channeled through local 
banks or other financial institutions that identify potentially qualified       
borrowers under one of our special loan programs. Participating financial       
intermediaries earn a fixed interest margin set by us (currently 0.75% p.a.) on 
loans extended under the special loan programs. Preferential loans have         
maturities of four to more than twenty years and, in the case of loans of more  
than 10 years, usually include an adjustable interest rate mechanism whereby we 
reset the interest rate after ten years. More than 50% of our preferential      
loans have an original maturity of more than 10 years. Unlike market-rate       
loans, preferential loans have been secured by both an assignment of the        
underlying loan and the creation in favor of Rentenbank of a security interest  
in the loan collateral or mortgage. Since April 1, 2001, new preferential loans 
have been secured by an assignment of the underlying loan and the right to      
require a transfer of the collateral in which the lending bank has a security   
interest.                                                                       

    Special loans are granted at preferential interest rates, which are promoted
by debiting our own income. Before the beginning of each fiscal year, the       
management board allocates a portion of our projected net income for the year   
to a special reserve. At the time a preferential loan is made, we calculate the 
difference between our applicable cost of funds and the preferential interest   
rate for the period from the date the loan is granted through the earlier of    
the maturity date and the first interest re-set date, if any, and the estimated 
administrative expenses. We charge these amounts against the reserve            
established for the year for both new and interest-adjusted sponsored loans. If 
the portion of our projected net income allocated to sponsored lending remains  
unused at the end of the year, the unused portion is not rolled over to the     
next year.                                                                      

PARTICIPATING FINANCIAL INSTITUTIONS                                            

Consistent with our purpose of providing financing to the agriculture,  
forestry, fishing, and food industries, and for rural development, we select    
financial institutions to whom we make loans based on their lending activities  
in these areas. In our review process, we generally exclude institutions which  
are clearly not involved in these areas, such as consumer finance institutions  
and investment banks. Of the remaining institutions, we review their annual     
reports and other documents to check the consistency of their activities with   
our purposes. If their lending activities are consistent with our purposes,     
they are approved as potential lenders, subject to credit approval. For local   
and regional banks, we assume that these banks are involved in the development  
of their local rural areas, and they are included as potential lenders.         

  Once an institution is approved as a lender of our market-rate loans, end-
borrowers may apply through them for loans related to our development           
objectives described above. While the purpose of the loan should be for         
activities related to our development objectives, there is no further           
certification made to us by either the end-borrower or the borrowing bank that  
the funds were actually used for these purposes. For a further description of   
our market-rate loans, see "-- Market-Rate Loans" above.                        

Under our special loan programs, we review the applications of the end- 
borrowers and make the final loan decision based on a review of their stated    
purposes for using the proceeds of the loan. Once approved, the loan is issued  
through one of banks we lend to. For a further description of our special loan  
programs, see "-- Special Loan Programs" above.                                 

SECURITIES PORTFOLIO                                                            

In addition to our traditional loan portfolio, we also extend credit by 
purchasing issuances of bonds and other fixed-interest securities of German and 
other European Union banks. The guidelines for our securities portfolio are     
similar to those we use for our loan portfolio. Just as we restrict loans to    
financial institutions active in the financing of agricultural and food         
industries, fisheries, forestry, and for rural development in Germany and       
elsewhere in the European Union, we only purchase securities issued by these    
institutions. At December 31, 2001, this securities portfolio accounted for     
24.9% of total assets. Of these debt securities, at December 31, 2001, 4.5% were
issued by public sector issuers benefiting from institutional liability or a    
guaranty obligation, compared to 5.5% at December 31, 2000. We value our entire 
securities portfolio on a strict lower of cost or market basis. See "Summary of 
Material Differences between German GAAP and U.S. GAAP".                        

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    The following table shows the aggregate book value of bonds and other fixed-
interest securities held by Rentenbank on an unconsolidated basis at December   
31, 2001, 2000 and 1999.                                                        

SECURITIES PORTFOLIO                                                            

                                                                [Download Table]

                                                        AT DECEMBER 31,      
                                                 ----------------------------
                                                   2001      2000      1999  
                                                 --------  --------  --------

                                                       (EUR IN MILLIONS)     
                                                                             

Public sector issuers..........................     658.7     715.7     796.2
Private sector banks...........................  14,073.3  12,220.1  11,362.1
                                                 --------  --------  --------

Total bonds and other fixed-interest securities  14,732.0  12,935.8  12,158.3
                                                 ========  ========  ========

SUBSIDIARIES                                                                    

  We hold interests in two affiliated companies: LR Beteiligungsgesellschaft
mbH ("LRB") and DSV Silo- und Verwaltungsgesellschaft mbH ("DSV"). LRB is a     
holding company that owns equity interests in a number of private companies     
engaged in activities related to the agriculture and the food industries. We    
own 100% of LRB's outstanding capital. At December 31, 2001, LRB had total      
assets of euro 218.5 million.                                                   

   DSV is a holding company that owns equity interests in companies engaged in
agriculture and forestry. LRB owns 100% of DSV's outstanding capital. At        
December 31, 2001, DSV had total assets of euro 16.0 million.                   

ACTIVITIES ON BEHALF OF THE FEDERAL REPUBLIC AND LANDER GOVERNMENTS             

   Our governing law requires us to allocate one-half of our net income, after
allocations to the special loan programs and the principal reserve and          
guarantee reserve, to a special fund we administer that was formed pursuant to  
the Law on Agricultural Disencumbrances of March 25, 1952 (Gesetz zur           
Abwicklung der landwirtschaftlichen Entschuldung). We make loans from this fund 
as instructed by the Federal Minister for Consumer Protection, Food and         
Agriculture. These loans are granted for innovative research and development    
projects in the agricultural sector.                                            

We also act on behalf of a number of different Lander and the Federal   
Republic in administering other sponsored loan programs. The state of Thuringia 
has appointed us to administer a number of programs through which agriculture-  
related borrowers in Thuringia receive sponsored loans. We earn a fee for       
administering the program and acting as conduit vehicle but otherwise have no   
credit exposure to any borrowers other than the state of Thuringia. We also     
administer sponsored agricultural and rural infrastructure lending for the      
states of Hesse and Hamburg. Furthermore, we continue to manage loans for the   
Federal Government for the financing of resettlement, building measures for old 
farms and the purchase of land, which were granted before the federal project   
for the improvement of the agrarian structure and coastal protection in 1973    
came into force.                                                                

   In addition to providing BLE with financing, we act as agent for BLE in the
placement of BLE promissory notes with investors and provide BLE with current   
account facilities.                                                             

SOURCES OF FUNDS                                                                

   Our principal sources of funds are (1) interbank loans and issuances in the
capital and money markets, both domestic and international, (2) the             
participation in open market transactions with the European Central Bank (ECB), 
and (3) secured and unsecured loans and other funding transactions with German  
and international institutional lenders. We are a continuous issuer in          
accordance with Section 3(2) of the German Securities Sales Prospectus Act      
(Wertpapierverkaufsprospektgesetz).                                             

In the domestic capital markets, we fund ourselves through a variety of 
different instruments, including short-term money market transactions, medium-  
to long-term promissory notes, registered bonds and bearer bonds. The registered
bonds and some of the bearer bonds are secured by assets which can be used to   
support their issuance. These assets include qualified mortgage bonds or        
debentures issued by the Federal Republic or its agencies; debentures issued the
German states and their agencies; other forms of collateral which meet German   
mortgage banking law requirements and other forms of adequate banking           
collateral. Our total capacity to issue secured debt is based on the amount of  
our assets available for use as collateral for these debt securities. At        
December 31, 2001, we had euro 15.8 billion worth of assets available for use to
secure debt we issued, of which euro 12.6 billion was already designated as     
collateral for our secured                                                      

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debt instruments. Accordingly, at December 31, 2001, we had the capacity to     
issue an additional euro 3.2 billion of secured debt instruments. Additionally, 
we have established a reserve for the purpose of providing an additional source 
of collateral for the issuance of secured debt. Secured debt instruments are    
placed predominantly with domestic investors.                                   

 We also fund ourselves in the international capital markets, both through
various issuing programs and periodically through our stand-alone issuance of   
various types of unsecured notes and debentures. The issuing programs include a 
US$ 35 billion Euro Medium-Term Note Program, euro 10 billion Commercial Paper  
Program and a 5 billion Australian Dollar Domestic Medium-Term Note Program. We 
also have shelf registrations in Japan for domestic bonds (Samurais) and        
secondary offerings (Uridashis).                                                

    The international capital markets represent an increasingly important source
of funding for us. In the year ended December 31, 2001, we issued the           
equivalent of euro 11 billion of Euro Medium-Term Notes, euro 14.6 billion of   
Euro Commercial Paper, euro 1.5 billion of Global bonds and euro 0.1 billion of 
other notes and bonds in the international markets in different currencies.     
Because our loan portfolio is denominated predominantly in Euro, we issue debt  
securities in other currencies principally to take advantage of arbitrage       
opportunities. We use derivative instruments to hedge our currency and interest 
rate exposure in connection with such issuances. Typically, we retain only a    
small portion of the proceeds for investment in securities or other assets      
denominated in the same currency as the relevant debt obligation. See "-- Risk  
Management and Derivatives" below.                                              

With respect to the domestic and international capital markets, the     
following table shows our sources of funds on an unconsolidated basis and,      
categorized by type of instrument, during each of the years indicated. We       
classify almost all instruments issued in the international capital markets as  
unsecured bearer bonds.                                                         

                                                                [Download Table]

                         AT DECEMBER 31,      
                  ----------------------------
                    2001      2000      1999  
                  --------  --------  --------

                        (EUR IN MILLIONS)     
                                              

Promissory notes   3,065.2   4,036.2   5,223.2
Registered bonds   7,512.6   7,438.6   6,733.3
Bearer bonds:                                 
 Secured .......   4,724.4   4,220.2   5,022.1
 Unsecured .....  29,840.5  23,938.4  16,131.6
                  --------  --------  --------

Total...........  45,142.7  39,633.4  33,110.2
                  --------  --------  --------


LIABILITIES TO CUSTOMERS                                                        

Our liabilities primarily consist of debt securities and bonds issued in
certificated form, liabilities to banks and liabilities to customers. See the   
discussion above in this "-- Sources of Funds" section and in "Management's     
Report -- Sources of Funds" for a description of our funding activities related 
to debt securities issued in certificate form and our liabilities to banks.     
Approximately 85% of our liabilities to customers consist of registered bonds   
and promissory notes that are purchased by insurance companies. The remaining   
amount of liabilities to customers consists of liabilities to individual German 
states, or Lander, as well as other local governments. These liabilities are    
uncertificated and arise from credit accounts with these governments.           

RISK MANAGEMENT AND DERIVATIVES                                                 

 Our treasury department has responsibility for our risk management system
and is overseen directly by the management board. The treasury department       
applies for and the management board determines market and liquidity risk       
exposure limits. Daily reports are generated by the risk control department,    
which analyzes whether our money market, loan and securities portfolios are     
within market and liquidity risk limits prescribed by the management board. The 
market risk report analyzes the effect on our trading, liquidity and credit     
portfolio of a putative 100 basis points upward shift of the yield curve and    
must be signed daily by the head of the treasury department and a member of the 
management board. With respect to liquidity risk, our exposure is never greater 
than the amount of short-term funds available to us from the European Central   
Bank based on our available eligible collateral for open market transactions    
with it. The credit department applies for and the board approves the           
counterparty credit limits for derivatives. Credit risk, including counter-party
credit risk, is monitored on a bank-wide basis as part of our annual review of  
borrowing customers. See "-- Market-Rate Medium- and Long-Term Loans".          

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   We use derivative instruments, such as swaps, forward contracts and options
almost exclusively as part of our asset and liability risk management program.  
Purchases and sales of derivative instruments are made for hedging purposes in  
an effort to match as closely as possible the currency, duration and interest   
rate basis of our assets and liabilities. No derivative activities are          
undertaken on behalf of clients. Risks are analyzed in accordance with the      
German Banking Act (Gesetz uber das Kreditwesen) which requires adequate        
capital coverage for securities transactions, transactions in derivative        
products and foreign exchange transactions. See "Supervision and Regulation".   

CREDIT ANALYSIS                                                                 

    We examine whether credit should be extended in response to direct inquiries
either from potential borrowers themselves or from third parties such as other  
banks or brokers. This examination includes whether or not we can provide funds 
based on the applicable laws and regulations that govern Rentenbank.            

   An application for credit and credit worthiness is judged on the basis of a
diverse set of documents including business reports, ratings letters and our    
own credit analysis. Approval for the extension of credit is made in compliance 
with our own credit approval regulations. Only after this approval are          
transactions allowed to go forward.                                             

FOREIGN CURRENCY RISKS                                                          

   In 2001, we issued bonds in seven different currencies on the international
capital markets. Approximately 51% of this borrowing was denominated in a       
currency other than Euro. Because our loan business is denominated almost       
exclusively in Euro, we have avoided any exchange-rate risk by swapping the     
proceeds from foreign denominated issues virtually exclusively into Euro        
through so-called cross-currency swaps.                                         

   Because our international lending is carried out within The European Union,
we have not been historically affected by credit risk associated with Asia,     
Latin America or Russia. In 2001, only 1.2% of our lending was denominated in a 
currency other than Euro.                                                       

LIQUIDITY MANAGEMENT                                                            

    We manage our liquidity requirements by projecting our expected liquidity on
a daily basis. Each day, we compile a projection of our net liquidity balance   
for each day of the coming twelve months. We also produce a projection of       
assets in our central clearing account with the German Central Bank (Deutsche   
Bundesbank) eligible for borrowing under the standing facilities of the         
European Central Bank. Among these facilities is the European Central Bank's    
marginal lending facility. Under this facility, we have an account with the     
Deutsche Bundesbank which has assets designated for use as collateral against   
which the European Central Bank would automatically extend credit if there was  
negative liquidity in our account. This standing facility allows us to obtain   
overnight liquidity from the European Central Bank, according to the amount of  
the our eligible assets. The interest rate on the marginal lending facility     
normally provides a ceiling for the overnight market interest rate we would be  
forced to pay.                                                                  

    We have used this facility occasionally in the past to cover daily liquidity
deficits. In each case, the European Central Bank automatically covered the     
deficit by extending an overnight loan in the required amount against the       
collateral in our Deutsche Bundesbank asset account. After each of these        
occasions, we were able to shortly thereafter restore liquidity to our account  
and return any amount owed to the European Central Bank, which freed up our     
assets to again be eligible to cover any future liquidity deficits.             

Our cash reserves consist of cash in hand and the balance of our central
clearing account with the Deutsche Bundesbank which reflects our obligation to  
hold minimum reserves in line with the requirements of the European Central     
Bank.                                                                           

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 MANAGEMENT'S REPORT

OVERVIEW                                                                        

    Our core business is to provide loans and other types of financing to German
banks that have customers involved in the agricultural sector of the German     
economy. Since 1994 we have begun to increase our international activities by   
the extension of credit to banks in other European Union countries. The major   
factor affecting our results of operations has been the growth and stability of 
the German banking system and, to a lesser extent, the banking system of those  
European Union countries in which we also extend credit. Management's strategy  
has been to maintain a steady rate of growth in our asset portfolio without     
sacrificing the credit quality of that portfolio. On the funding side of the    
business, management's strategy has been to develop new sources of low cost     
funding including the expansion of our international funding base.              

    Under German law, we prepare financial statements on both a consolidated and
an unconsolidated basis. Throughout this prospectus, we discuss our             
consolidated financial information unless we note otherwise. For more           
information on our stand-alone statements, see our financial statements and the 
notes thereto beginning on page F-1.                                            

BALANCE SHEET TRENDS                                                            

Our total consolidated assets and our total consolidated liabilities and
equity increased by 15.2% to euro 59.2 billion at December 31, 2001, as compared
with euro 51.4 billion at December 31, 2000.                                    

We extend credit both by making traditional loans and by purchasing     
issuances of bonds and other fixed-interest securities from German and other    
European Union banks. Consistent with these activities, loans and advances to   
banks, loans and advances to customers and bonds and other fixed-interest       
securities accounted for the large majority of our assets. These items amounted 
to euro 58.7 billion, or 99.2% of total assets, at December 31, 2001, as        
compared with euro 51.1 billion, or 99.3% of total assets, at December 31, 2000.
The increase in these amounts at year-end reflected the increase lending        
activity in 2001.                                                               

  Our most significant liabilities relate to the funding of these activities
and are concentrated in liabilities to banks, liabilities to customers and      
certificated liabilities. These liabilities totaled euro 56.6 billion, or 95.7% 
of total liabilities and equity, at December 31, 2001, as compared with euro    
48.9 billion, or 95% of total liabilities and equity, at December 31, 2000. Our 
equity (subscribed capital, reserves and funds for general banking risks)       
increased from euro 1.1 billion at December 31, 2000 to euro 1.2 billion at     
December 31, 2001. Subscribed capital remained unchanged at euro 0.1 billion.   
The principal reserve and the guarantee reserve increased by euro 25.5 million  
reflecting the transfer of 2001 net income to these reserves.                   

The following tables set forth the key trends in our balance sheet, on a
consolidated basis, at the dates indicated:                                     

CONSOLIDATED BALANCE SHEET TRENDS                                               

                                                        [Enlarge/Download Table]

                                                                                 INCREASE   
                                                                                (DECREASE)  
                                                                                 IN 2001    
                                                  DECEMBER 31,  DECEMBER 31,  COMPARED WITH 
                                                     2001(1)       2000(1)       2000(1)    
                                                  ------------  ------------  ------------- 
                                                       (EUR IN MILLIONS)           (%)      
                                                                                            
ASSETS                                                                                      
Cash reserves...................................           0.1           0.4          (75.0)
Loans and advances to banks(2)(3)...............      41,600.8      35,830.7           16.1 
Loans and advances to customers(2)(4)...........       2,370.9       2,141.5           10.7 
Bonds and other fixed-interest securities(2)....      14,762.5      12,986.5           13.7 
Shares and other variable-yield securities......           2.8           7.9          (64.6)
Investments and shares in affiliated enterprises         173.0         172.6            0.2 
Trust assets....................................         192.6         198.6           (3.0)
Public sector recovery claims...................           8.3          72.5          (88.6)
Tangible assets.................................           7.9           8.0           (1.3)
Other assets....................................           6.5          10.8          (39.8)
Deferred income.................................          36.1          44.8          (19.4)
                                                  ------------  ------------  ------------- 
Total assets....................................      59,161.5      51,474.3           14.9 
                                                  ============  ============  ============= 


----------                                                                      
(1) Columns may not add due to rounding.                                        

(2) Includes accrued interest.                                                  

(3) Includes  amounts  due from  companies  in which  Rentenbank has  investment
holdings.                                                               

(4) Includes  amounts due from affiliated companies and  from companies in which
Rentenbank has investment holdings.                                     

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                                                                [Download Table]

                                                                         INCREASE   
                                                                        (DECREASE)  
                                                                         IN 2001    
                                          DECEMBER 31,  DECEMBER 31,  COMPARED WITH 
                                             2001(1)       2000(1)       2000(1)    
                                          ------------  ------------  ------------- 

                                               (EUR IN MILLIONS)           (%)      
                                                                                    
LIABILITIES AND EQUITY                                                              
Liabilities to banks(2)(3)..............      16,775.1      15,341.9            9.3 
Liabilities to customers(2)(4)..........       4,605.5       4,883.9           (5.7)
Certificated liabilities(2)(5)..........      35,207.5      28,685.1           22.7 
Trust liabilities.......................         192.6         198.6           (3.0)
Other liabilities(6)....................          24.6         106.4          (76.9)
Deferred income.........................          38.4          47.2          (18.6)
Accrued expenses........................         199.6         183.1            9.0 
Subordinated liabilities................         880.6         886.4           (0.7)
Funds covering general banking risks....         555.0         485.0           14.4 
Equity (subscribed capital and reserves)         682.6         656.7            3.9 
                                          ------------  ------------  ------------- 

Total...................................      59,161.5      51,474.3           14.9 
                                          ============  ============  ============= 

Memo Items:                                                                         
Contingent liabilities(7)...............          92.5          17.8          419.7 
Other liabilities(8)....................         402.4       1,343.4          (70.0)


----------                                                                      
(1) Columns may not add due to rounding.                                        

(2) Include accrued interest.                                                   

(3) Include   liabilities  to  companies  in  which  Rentenbank  has  investment
holdings.                                                               

(4) Include   liabilities  to  companies  in  which  Rentenbank  has  investment
holdings and liabilities to affiliated companies.                       

(5) Consist of debt securities, bonds and notes.                                

(6) Include other liabilities and Edmund Rehwinkel Foundation.                  

(7) Consist  of  contingent  liabilities  resulting  from  discounted  bills  of
exchange and liabilities resulting from guarantees and indemnity        
agreements.                                                             

(8) This  item  consists  entirely  of  irrevocable  loan  commitments  made  by
Rentenbank.                                                             

EDMUND REHWINKEL FOUNDATION                                                     

Rentenbank established the Edmund Rehwinkel Foundation in 1974 for the  
purpose of further supporting agricultural development. The initial endowment   
fund included our donations and was raised by us. This fund sponsors research   
projects relating to agriculture from the proceeds of the endowment fund. The   
fund is not an independent entity, but a special trust fund that we administer. 
The nature of our liability is an obligation to provide ongoing funding to the  
foundation.                                                                     

VOLUME OF CREDIT                                                                

We extend credit both by making traditional loans and by purchasing     
issuances of bonds and other fixed-interest securities from German and other    
European Union banks. Consequently, the growth in lending activity is reflected 
in the increase in loans and advances to banks, loans and advances to customers 
and bonds and other fixed-interest securities.                                  

At December 31, 2001, loans and advances to banks amounted to euro 41.6 
billion, of which euro 361.5 million was payable on demand, as compared with    
euro 35.8 billion at December 31, 2000, of which euro 286.8 million was payable 
on demand.                                                                      

 Loans and advances to customers increased to euro 2.4 billion at December
31, 2001, from euro 2.1 billion at December 31, 2000. This increase does not    
represent a trend in our credit practices, but only the fact that certain       
short-term advances to customers happened to be outstanding on the balance sheet
date.                                                                           

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 The following table sets forth, on an unconsolidated basis, the trends in
Rentenbank's extensions of credit in 2001 and 2000.                             

                                                                [Download Table]

                                                                         INCREASE 
                                                                        (DECREASE)
                                                                         IN 2001  
                                           DECEMBER 31,  DECEMBER 31,  COMPARED TO
                                               2001          2000          2000   
                                           ------------  ------------  -----------

                                                (EUR IN MILLIONS)          (%)    
                                                                                  
MARKET-RATE LOANS:                                                                
Inside Germany...........................        24,450        21,634         13.0
Outside Germany..........................        11,901         9,374         27.0
Preferential loans.......................         6,214         5,779          7.5
                                           ------------  ------------  -----------

Total traditional loans..................        42,565        36,787         15.7
Bonds and other fixed-interest securities        14,763        12,987         13.7
                                           ------------  ------------  -----------

Total extensions of credit...............        57,328        49,774         15.2
                                           ============  ============  ===========


  This table emphasizes two things. First, our traditional loan portfolio is
increasingly composed of loans made in the European Union but outside Germany.  
Our market-rate loans inside Germany increased by euro 2,816 million, or 13% to 
euro 24,450 million at December 31, 2001, compared with euro 21,634 million at  
December 31, 2000. By contrast, our market rate loans outside Germany increased 
by euro 2,527 million, or 27%, to euro 11,901 million at December 31, 2001,     
compared with euro 9,374 million at December 31, 2000.                          

    Second, our portfolio of bonds and other fixed-interest securities increased
by euro 1,776 million, or 13,7%, to euro 14,763 million at December 31, 2001,   
compared with euro 12,987 million at December 31, 2000. This reflects the       
increasing securitization of our credit market. We increasingly extend credit,  
not by making traditional loans, but rather by purchasing banks' issuances of   
bonds and other fixed-interest securities. This general market-wide development 
is favorable to our borrowers, to us and other bank lenders because of the      
greater liquidity and fundability of these securities.                          

SOURCES OF FUNDS                                                                

Our principal source of funds for our loan and securities portfolios are
interbank loans and issuances in the capital markets, both domestic and         
international, the participation in open market transactions with the European  
Central Bank, and secured and unsecured loans and other funding transactions    
with German and international institutional lenders.                            

Our most significant liabilities relate to these funding activities.    

 Liabilities to banks increased by euro 1.4 billion, or 9.3%, to euro 16.8
billion at December 31, 2001 from euro 15.3 billion at December 31, 2000 and    
liabilities to customers decreased 0.3 billion, or 5.7%, to euro 4.6 billion at 
December 31, 2001 from euro 4.9 billion at December 31, 2000.                   

 The decline in liabilities to banks and customers reflects our increasing
use of the capital markets to fund our lending activities.                      

With respect to the domestic and international capital markets, the     
following table sets forth the trends in our sources of funds, on an            
unconsolidated basis and categorized by type of instrument, during 2001 and     
2000.                                                                           

                                                                [Download Table]

                  FOR THE YEAR ENDED                
                     DECEMBER 31,                   
                  ------------------                
                                         INCREASE   
                                        (DECREASE)  
                                         IN 2001    
                                      COMPARED WITH 
                    2001      2000         2000     
                  --------  --------  ------------- 

                   (EUR IN MILLIONS)       (%)      
                                                    

Promissory notes   3,065.2   4,036.2          (24.1)
Registered bonds   7,512.6   7,438.6            1.0 
Bearer bonds:                                       
Secured.........   4,724.4   4,220.2           11.9 
Unsecured.......  29,840.5  23,938.4           24.7 
                  --------  --------  ------------- 

Total...........  45,142.7  39,633.4           13.9 
                  ========  ========  ============= 

At December 31, 2001, the total of Rentenbank's outstanding borrowings  
amounted to euro 45.1 billion compared with euro 39.6 billion at December 31,   
2000. This increase of 13.9% reflects primarily an increased                    

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use of  the  capital  markets  to  fund  growth  in  extensions  of  credit,    
particularly on a medium- and long-term basis and through our Euro Commercial   
Paper Program.                                                                  

 Our outstanding promissory notes decreased by euro 1.0 billion, or 24.1%,
from euro 4.0 billion at December 31, 2000 to euro 3.1 billion at December 31,  
2001. Promissory notes (Schuldscheindarlehen) are almost exclusively placed in  
Germany, and the decline in their use reflects our increasing use of the        
international, as opposed to the domestic, capital markets.                     

Our outstanding unsecured bearer bonds increased by euro 5.9 billion, or
24.7%, from euro 23.9 billion at December 31, 2000, to euro 29.8 billion at     
December 31, 2001. This strong growth also reflects our increasing use of the   
international capital markets including our Euro Commercial Paper Program with  
which we issued euro 14.6 billion and our Euro Medium-Term Note Program with    
which we raised the equivalent of euro 11.0 billion in 2001.                    

  For a more detailed discussion of the types of instruments and programs we
use in the domestic and international capital markets, see "Business -- Sources 
of Funds" above.                                                                

CAPITAL ADEQUACY                                                                

We are subject to the capital adequacy requirements established by the  
German Financial Supervisory Authority. See "Supervision and Regulation" below. 
The table below sets forth the components of our regulatory capital ratios and  
the components of these ratios on a consolidated basis at December 31, 2001,    
2000 and 1999 as determined in accordance with the German Banking Act (Gesetz   
uber das Kreditwesen).                                                          

                                                                [Download Table]

                                                            DECEMBER 31,     
                                                        -------------------- 
                                                         2001    2000   1999 
                                                        ------  -----  ----- 

                                                          (EUR IN MILLIONS)  

                                                                             
Core capital..........................................   1,088  1,000    982 
Total liable capital..................................   1,782  1,661  1,567 
Total risk-adjusted assets and off balance sheet items  11,841  9,845  8,954 
Core capital ratio....................................     9.2%  10.2%  11.0%
Solvency ratio........................................    15.1%  16.9%  17.5%


 Our equity capital is fixed by the governing law at euro 135 million. Our
equity capital was accumulated during the ten year period following our         
establishment through payments by owners and lessees of certain lands           
permanently used for agricultural and forestry purposes, known as the land      
charge. The land charge was established pursuant to a law of May 11, 1949       
(Gesetz uber die Rentenbankgrundschuld) enacted simultaneously with our         
governing law. Contributors to Rentenbank's equity capital through the land     
charge have no ownership rights in the bank.                                    

 In addition to capital contributed through the land charge, our governing
law requires that we contribute a portion of our annual earnings to two reserve 
funds: the principal reserve fund and the guarantee reserve fund. In addition,  
pursuant to Section 340(g) of the German Commercial Code, our advisory board may
allocate, on a discretionary basis, a portion of our annual profits and certain 
previously-established reserves to a fund covering general banking risks, which 
is Tier I capital and essentially functions as a reserve against potential      
future loan losses.                                                             

The principal reserve is part of our Tier I capital and is funded by    
mandatory annual contributions of 50 percent of Rentenbank's annual profits     
after allocations to the guarantee reserve. At December 31, 2001, the principal 
reserve stood at euro 177.8 million. The guarantee reserve provides additional  
collateral for Rentenbank's issuance of secured instruments. The advisory board 
decides on the annual allocation to the guarantee reserve and may allocate up   
to 50 percent of the bank's annual profits to the guarantee reserve but the     
aggregate size of the guarantee reserve is limited to an amount equal to 5      
percent of the face amount of all secured instruments outstanding.              

   We also have several other forms of liable capital. Liable capital consists
principally of subordinated debt that qualifies as supplementary or Tier II     
capital for regulatory purposes. At December 31, 2001, our liable capital       
included euro 880.6 million of subordinated debt.                               

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PROFIT AND LOSS ACCOUNT                                                         

 Rentenbank's overall profit and loss account improved in 2001 compared to
2000. Net income increased to euro 34.0 million for the year ended December 31, 
2001, compared with euro 32.7 million for the year ended December 31, 2000.     

The following table sets forth Rentenbank's consolidated profit and loss
account for each of the years ended December 31, 2001 and 2000.                 

CONSOLIDATED PROFIT AND LOSS ACCOUNT                                            

                                                        [Enlarge/Download Table]

                                                                                               INCREASE   
                                                                                              (DECREASE)  
                                                                            FOR THE YEAR       IN 2001    
                                                                                ENDED       COMPARED WITH 
                                                                            DECEMBER 31,         2000     
                                                                          ------------------------------- 
                                                                          2001(1)  2000(1)                
                                                                          -------  -------  ------------- 

                                                                               (EUR IN                    
                                                                              MILLIONS)          (%)      

                                                                                                          
Interest income(2)......................................................  2,950.4  2,653.4           11.2 
Interest expense........................................................  2,781.5  2,502.9           11.1 
                                                                          -------  -------  ------------- 

Net interest income.....................................................    168.9    150.5           12.2 
Other operating income(3)...............................................      2.3      4.4          (47.7)
Net commission expense..................................................     (0.3)   (0.3)            0.0 
General administrative expenses.........................................    (34.2)   (30.1)          13.6 
Depreciation and valuation adjustments on intangible and tangible assets     (2.5)    (2.3)           8.7 
Other operating expenses................................................     (3.0)    (1.0)         200.0 
                                                                          -------  -------  ------------- 

Extraordinary expenditure...............................................      0.0     (5.1)        (100.0)
                                                                          -------  -------  ------------- 

Operating income (before risk provisions and valuation adjustments).....    131.2    116.1           13.0 
Risk provisions and valuation adjustments, net..........................    (97.1)   (83.2)          16.7 
                                                                          -------  -------  ------------- 

Pre-tax income..........................................................     34.1     32.9            3.6 
Taxes(4)................................................................     (0.1)    (0.2)         (50.0)
                                                                          -------  -------  ------------- 

Net income..............................................................     34.0     32.7            4.0 
                                                                          =======  =======  ============= 


----------                                                                      
(1) Columns may not add due to rounding.                                        

(2) Includes   interest   income   from   lending   operations,   money   market
transactions, fixed interest securities and debt register claims and    
  current income from shares and other variable-yield securities, investment
holdings and shares in affiliated companies.                            

(3) Includes net revenue from financial operations and other operating income.  

(4) Although  Rentenbank is not subject to corporate tax,  it is subject to real
property and vehicle taxes. In addition, Rentenbank's subsidiary LR     
Beteiligungsgesellschaft is subject to corporate and trade tax.         

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Net Interest Income                                                             

   The following table sets forth the principal components of Rentenbank's net
interest income, on a consolidated basis, for the years ended December 31, 2001 
and 2000:                                                                       

                                                                [Download Table]

                                                                 INCREASE  
                                                                (DECREASE) 
                                              FOR THE YEAR       IN 2001   
                                                  ENDED       COMPARED WITH
                                              DECEMBER 31,       2000(1)   
                                            -------------------------------
                                              2001     2000                
                                            -------  -------  -------------

                                                 (EUR IN                   
                                                MILLIONS)          (%)     

                                                                           
Interest income:                                                           
 Loans and advances to banks and customers  2,202.8  1,917.5           14.9
 Debt securities..........................    739.2    725.0            2.0
 Dividends and other income...............      8.4     10.8         (22.2)
                                            -------  -------  -------------

Total.....................................  2,950.4  2,653.4           11.2
                                            =======  =======  =============

Interest expense:                                                          
 Liabilities to banks and customers.......    936.4    804.9           16.3
 Certificated liabilities.................  1,802.9  1,655.1            8.9
 Subordinated liabilities.................     42.2     42.9          (1.6)
                                            -------  -------  -------------

Total.....................................  2,781.5  2,502.9           11.1
                                            -------  -------  -------------

Net interest income.......................    168.9    150.5           12.2
                                            =======  =======  =============


Total interest income increased by euro 297.1 million, or 11.2%, to     
euro 2,950.4 million for the year ended December 31, 2001, as compared with     
euro 2,653.4 million for the year ended December 31, 2000. Total interest       
expense increased by euro 278.6 million, or 11.1%, to euro 2,781.5 million for  
the year ended December 2001, as compared with euro 2,502.9 million for the year
ended December 31, 2000. Because the increase in income was greater than the    
increase in expense, net interest income increased by euro 18.4 million, or     
12.2%, to euro 168.9 million for the year ended December 31, 2001, as compared  
with euro 150.5 million for the year ended December 31, 2000.                   

Other Operating Income                                                          

   Other operating income decreased by euro 2.1 million, or 47.7%, to euro 2.3
million in 2001 from euro 4.4 million in 2000. Other operating income also      
includes rental income from real estate owned by Rentenbank, reversals of       
provisions, which decreased in 2001 and some special income of the affiliated   
companies, which decreased also in 2001.                                        

Net Commission Expense                                                          

 Net commission expense remained constant at euro 0.3 million for 2001 and
2000. We earn commission income from fees paid by banks that we arrange loans   
for. Commission income remained constant at euro 1.1 million for 2001 and 2000. 
Our commission expense comes from fees we pay in connection with loans that     
other banks arrange for us. Our commission expense remained unchanged at euro   
1.4 million.                                                                    

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General Administrative Expenses                                                 

The following table sets forth, on a consolidated basis, the principal  
components of our general administrative expenses for the years ended December  
31, 2001 and 2000.                                                              

                                                        [Enlarge/Download Table]

                                                                       2001  2000  CHANGE
                                                                       ------------------
                                                                         (EUR IN         
                                                                        MILLIONS)     %  

                                                                                         
Salaries and wages...................................................  13.4  12.1    10.7
Social security contributions and expenditure on pensions and support   9.9   8.4    17.9
Other administrative expenses........................................  10.9   9.6    13.5
                                                                       ----  ----  ------

Total general administrative expenses................................  34.2  30.1    13.6
                                                                       ====  ====  ======


   General administrative expenses increased by euro 4.1 million, or 13.6%, to
euro 34.2 million in 2001 from euro 30.1 million in 2000. The most significant  
component of this increase were costs for social security contributions and     
expenditure on pensions and welfare benefits and other administrative expenses. 

Depreciation and Valuation Adjustments on Intangible and Tangible Assets        

Depreciation and valuation adjustments on intangible and tangible assets
increased by euro 0.2 million, or 8.7%, to euro 2.5 million in 2001 compared    
with 2.3 million in 2000.                                                       

Other Operating Expenses                                                        

   Other operating expenses increased by euro 2.0 million to euro 3 million in
2001 compared with euro 1.0 million in 2000, which is caused by a singular      
expense by an affiliated company.                                               

Operating Income                                                                

 For the reasons described above, operating income (before risk provisions
and valuation adjustments) increased by euro 15.1 million, or 13%, to euro 131.2
million in 2001 compared with euro 116.1 million in 2000.                       

Net Risk Provisions and Valuation Adjustments                                   

Net risk provisions and valuation adjustments increased by euro 13.9    
million, or 16.7%, to euro 97.1 million in 2001 compared with euro 83.2 million 
in 2000. Net risk provisions include (a) depreciation and valuation adjustments 
on loans and certain securities as well as allocations to reserves for lending  
operations, allocations to the fund for general banking risks and depreciation  
and valuation adjustments relating to investment holdings, shares in affiliated 
companies and securities treated as fixed assets, less (b) income from write-   
ups on loans and certain securities and from write-downs of provisions for the  
lending business and income from write-ups on investment holdings, shares in    
affiliated companies and securities treated as fixed assets.                    

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MANAGEMENT

   Pursuant to our governing law we have three principal governing bodies: the
management board, the advisory board and the general meeting.                   

Management Board                                                                

The management board is responsible for the day-to-day conduct of our   
business and the administration of our assets in accordance with the governing  
law and represents us in dealings with third parties and the judiciary. In      
accordance with the general guidelines for the granting of loans which have     
been established by the advisory board, the management board is required to     
report semi-annually to the loan committee (Kreditausschuss) of the advisory    
board and to the commissioner on the development of unsecured credit and large  
exposures pursuant to the German banking regulations.                           

 The management board is comprised of at least two, and no more than four,
members. Its members are appointed, and may be withdrawn by, the advisory       
board.                                                                          

The current members of the management board are:                        

Herr Karl-Ingo Bruns                                              
Herr Hans Jurgen Ploog                                            
Herr Dipl. Kfm. Dr. h. c. Uwe Zimpelmann                          

Advisory Board                                                                  

Currently, the advisory board consists of 31 members, of whom fifteen   
represent agricultural and food organizations, three represent not-for-profit   
trade unions, six are agricultural ministers of the German states or their      
permanent official representatives, one represents the Kreditanstalt fur        
Wiederaufbau, one represents Deutsche Genossenschaftsbank and three represent   
agricultural credit institutions or other loan experts appointed by the         
advisory board. The advisory board is responsible for the overall conduct of    
our business and administration of our assets and supervises the management     
board. In particular, the advisory board establishes general guidelines for the 
granting of loans, passes resolutions directing specific actions consistent     
with our statutory activities, approves employment contracts with members of    
the management board, and allocates reserves consistent with the governing law. 
In addition, the following actions require the approval of the advisory board:  
the issuance of bearer debentures; the acquisition and sale of investments; the 
purchase and sale of land and buildings; the establishment of policies          
regarding the types of collateral to be used securing payment of principle and  
interest on certain types of bearer instruments; approval of material           
employment contracts; and the issuance of pension guidelines. The advisory      
board must meet at least semi-annually. In May of 2004, the composition of the  
advisory board will change to reflect the recent amendment to Rentenbank's      
governing law. For more information, see "Recent Developments -- Governing      
Law".                                                                           

The current advisory board consists of the following members:           

Chairman:                       Prasident Gerd Sonnleitner,                     
             Deutscher Bauernverband e.V.,
Bonn            

Deputy Chairman:                Prasident Wilhelm Niemeyer,                     
                   Landesverband des Niedersachsischen
        Landvolks e.V., Hannover

Representatives of the not-     Prasident Heinz Christian Bar, Hessischer       
for-profit German Farmers'      Bauernverband e.V.,                             
Association                     Friedrichsdorf/Ts.                              
(Deutscher Bauernverband        Generalsekretar Dr. Helmut Born,                
e.V.):                          Deutscher Bauernverband e.V.,                   
Bonn            

        Prasident Wilhelm Grimm,
           Bauernverband Hamburg e.V.,
Hamburg         

         Prasident Werner Gutzmer,
                        Landesbauernverband Sachsen-Anhalt e.V.,
Magdeburg       

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            Prasident Gerd Hockenberger,
                              Landesbauernverband in Baden-Wurttemberg e.V.,
Stuttgart       

            Prasident Horst Hoferichter,
                    Bauernverband der Vertriebenen e.V.,
Bonn            

              Prasident Franz-Josef Mollers,
                              Westfalisch-Lippischer Landwirtschafts-verband
e.V.,           
Munster         

                Prasident Heinz-Dieter Nieschke,
                      Landesbauern-Verband Brandenburg e.V.,
Teltow/Ruhlsdorf

                 Prasident Norbert Schindler, MdB,
        Bauern-und Winzerverband
         Rheinland-Pfalz Sud e.V.,
Mainz           

                 Prasident Otto-Dietrich Steensen,
                           Schleswig-Holsteinischer Bauernverband e.V.
Rendsburg       

State Ministers of                                                              
Agriculture or their                                                            
permanent official                                                              
representatives:2                                                               

Bremen:                         Staatsrat Dr. Uwe Farber                        
                     Der Senator fur Wirtschaft und Hafen,
Bremen          

Rhineland-Palatinate:           Hans-Artur Bauckhage                            
                 Minister fur Wirtschaft, Verkehr,
           Landwirtschaft und Weinbau,
Mainz           

Saarland:                       Stefan Morsdorf                                 
    Minister fur Umwelt,
Saarbrucken     

Saxony:                         Steffen Flath                                   
                             Staatsminister fur Umwelt und Landwirtschaft,
Dresden         

Saxony-Anhalt:                  Petra Wernicke                                  
                         Ministerin fur Landwirtschaft und Umwelt,
Magdeburg       

Schleswig-Holstein:             Ingrid Franzen                                  
                              Ministerin fur landliche Raume, Landesplanung,
             Landwirtschaft und Tourismus,
Kiel            

Representative of the           Detlef Leinberger,                              
Kreditanstalt fur               Mitglied des Vorstandes,                        
Wiederaufbau:                   Frankfurt/Main                                  

Representative of the           Dr. Ulrich Brixner, Vorsitzender des            
Deutsche                        Vorstandes,                                     
Genossenschaftsbank:3           DZ BANK AG Deutsche Zentral-Genossenschafts-    
Bank,           
Frankfurt/Main  

----------                                                                      
(2) The  Bundesrat, the upper house  of Germany's parliament,  has established a
rotational system pursuant to which every two years a different set of  
German States is represented on our advisory board.                     

(3) DZ  BANK AG  Deutsche Zentral-Genossenschaftsbank is  a German bank  that is
majority owned by German cooperative holding companies, a cooperative   
central bank and credit cooperatives and that provides financing to     
  cooperative enterprises. We hold a 3.35% ownership interest in DZ BANK AG.

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Elected Specialists:            Dr. Rolf E. Breuer, Vorsitzender des            
Aufsichtsrats,  
 Deutsche Bank AG,
Frankfurt/Main  

         Dr. Dietrich Hoppenstedt,
                      Prasident des Deutschen Sparkassen-und
   Giroverbandes e.V.,
Berlin          

       Dr.h.c. Friedel Neuber,
                      ehemaliger Vorsitzender des Vorstands,
                     Westdeutsche Landesbank Girozentrale,
Dusseldorf      

Representatives of the not-     Direktor Wolfgang Deml,                         
for-profit Farmers' Mutual      Vorstandsvorsitzender, BayWa AG, Munchen        
Savings Institution                                                             
(Deutscher Raiffeisenverband                                                    
e.V.):                                                                          

         Prasident Manfred Nussel,
                  Deutscher Raiffeisenverband e. V.,
Bonn            

Representatives of the Food     Dr. Peter Traumann,                             
Industry:                       Vorsitzender der Bundesvereinigung der          
                  Deutschen Enahrungsindustrie e.V.,
Bonn            

                  Prasident a.D. Dr. Johannes Stroh,
                              Bundesverband der Agrargewerblichen Wirtschaft
e.V.,           
Bad Oldesloe    

Representatives of the not-     Prasident Karl Meise,                           
for-profit Federation of        Landwirtschaftskammer Westfalen-Lippe,          
State Chambers of Agriculture   Munster                                         
(Verband der                                                                    
Landwirtschaftskammern e.V.):                                                   

     Prasident Carlo Puhl,
                       Landwirtschaftskammer fur das Saarland,
Saarbrucken     

Representatives of the not-     Eva-Maria Pfeil                                 
for-profit Trade Unions:        Geschaftsfuhrerin der IG BAU Mitglieder Service 
    GmbH, Frankfurt/Main

      Klaus Wiesehugel, MdB,
                             Bundesvorsitzender der IG Bauen-Agrar-Umwelt,
Frankfurt/Main  

   Hans-Joachim Wilms,
                           Stellvertretender Bundesvorsitzender der IG
   Bauen-Agrar-Umwelt,
Frankfurt/Main  

General Meeting                                                                 

    The governing law requires that each year a general meeting be held at which
thirty representatives of owners and lessees of land subject to the land charge 
convene to vote on the allocation of annual profits and formally ratify the     
acts of the management board and the advisory board. In addition, the general   
meeting must approve our annual accounts.                                       

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 EMPLOYEES

  At December 31, 2001, we had 198 employees. Of these, 173, or 87.4% of our
workforce, were commercial employees (kaufmannische Angestellte). The remaining 
25 employees, or 12.6%, were industrial employees (gewerbliche Angestellte),    
working as kitchen staff, janitors, tradesmen and drivers. One hundred and      
twenty (120) employees, or 60.6% of our total staff, are covered by a           
collective bargaining agreement.                                                

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SUPERVISION AND REGULATION

GENERAL                                                                         

Pursuant to our governing law, we are subject to the supervision of a   
commissioner and a deputy commissioner who are appointed by the Federal         
Government. The commissioner is charged with the duty to pursue the public      
interest, in particular to ensure that our business operations comply with      
applicable laws and statutes, and is authorized to prohibit directives and      
resolutions of the management board and the advisory board which offend         
applicable laws or statutes. The deputy commissioner acts with identical powers 
in the event of the absence or indisposition of the commissioner. These powers  
of supervision do not include the right to exercise influence over business     
decisions by our management board or our advisory board.                        

In addition, we are subject to comprehensive supervision and regulation 
comparable in many respects to the supervision of United States commercial      
banks. Organized under our governing law, we are authorized to carry on the     
types of banking business which are set forth in our governing law. We are      
subject to the requirements of the Banking Act (Gesetz uber das Kreditwesen)    
and are supervised and regulated by the German Financial Supervisory Authority  
(Bundesanstalt fur Finanzdienstleistungsaufsicht) and by the German Central     
Bank (Deutsche Bundesbank).                                                     

REGULATION BY THE GERMAN FINANCIAL SUPERVISORY AUTHORITY                        

   The German Financial Supervisory Authority (GFSA) is an independent federal
authority supervised by the Federal Ministry of Finance. The GFSA is authorized 
to issue certain regulations and guidelines implementing the provisions of the  
Banking Act and other laws affecting banks, including Rentenbank. The           
regulations issued by the GFSA's predecessor lay down important regulatory      
requirements, including principles relating to capital adequacy and liquidity   
requirements (the "Principles"). The Banking Act implements certain             
recommendations on banking supervision issued by the Basel Committee on Banking 
Supervision and implements certain directives of the European Community (EC)    
relating to banks.                                                              

 Under the Banking Act, every entity that is engaged in one or more of the
financial activities defined therein as "banking business" (Bankgeschafte) is   
subject to the licensing requirements and other provisions of the Banking Act,  
unless specifically exempted therefrom. The GFSA supervises the operations of   
banks to ensure that they conduct their business in accordance with the         
provisions of the Banking Act, including, in particular, compliance with        
capital adequacy and liquidity requirements, lending limits and restrictions on 
certain other activities.                                                       

REGULATION BY THE DEUTSCHE BUNDESBANK                                           

The GFSA carries out its supervisory role in close cooperation with the 
Deutsche Bundesbank, the German central bank. The GFSA must generally consult   
with the Deutsche Bundesbank before promulgating general rules and regulations. 
The promulgation of specified rules and regulations, however, such as the       
Principles, requires the prior consent of the Deutsche Bundesbank. The Deutsche 
Bundesbank is also responsible for organizing the collection and analysis of    
periodic and other reports from the banks.                                      

CAPITAL ADEQUACY REQUIREMENTS                                                   

   Under the German risk-based capital adequacy rules, each bank and financial
institution must maintain a certain solvency ratio of Regulatory Liable Capital 
(haftendes Eigenkapital) (as defined below) to risk-adjusted assets. These      
rules implement certain provisions of the EC Capital Adequacy Directive, the EC 
Own Funds Directive and the EC Solvency Ratio Directive (which now have been    
replaced by the EC Directive relating to the taking up and pursuit of the       
business of credit institutions), which in turn were based on the               
recommendations of the Basel Committee on Banking Supervision.                  

  Pursuant to the Banking Act, for a banking institution such as Rentenbank,
"Regulatory Liable Capital" (the numerator of the solvency ratio) consists      
principally of:                                                                 

*     Core Capital (Kernkapital) (as defined below); and          

 *     Supplementary Capital (Erganzungskapital) (as defined below);

"Core Capital", as this term applies to us, consists primarily of:      

*     Subscribed capital;                                         

*     Reserves; and                                               

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     *     the fund covering general banking risks according to section 340g
       of the German Commercial Code (HGB) (an item which a bank may
             create on the liability side of its balance sheet in its reasonable
           commercial judgment in the light of the special risks inherent in
the banking business).                                

 "Supplementary Capital", as this term applies to us, consists principally
of:                                                                             

*     long-term subordinated liabilities;                         

   *     a general banking risk reserve according to section 340f of the
German Commercial Code (HGB); and                     

*     revaluation reserves (Neubewertungsreserven).               

Core Capital reflects a similar concept to Tier I capital and the       
Supplementary Capital reflects a similar concept to Tier II capital (as such    
terms are used in the U.S. capital adequacy rules). Up to and including fiscal  
year 1999, profit participation rights (Genussrechte) were included in          
Supplementary Capital. In determining the aggregate Regulatory Liable Capital,  
Supplementary Capital may only be included up to the amount of Core Capital,    
subject to certain other restrictions. Additionally, Regulatory Liable Capital  
may be reduced by certain deductible items.                                     

    Principle I sets forth the requirements regarding the extent to which a bank
must maintain capital to cover its counterparty and market risks.               

In order to limit counterparty risks, the risk-weighted assets of a bank
must be covered by Regulatory Liable Capital at a ratio of at least 8%. Risk-   
weighted assets include, inter alia, credits, securities and equity             
participations, as well as swaps, forward transactions (Termingeschafte) and    
option rights, to the extent that they are not required to be covered under     
Regulatory Liable Capital pursuant to trading book provisions. These assets are 
to be weighted according to specific risk weighting categories. For example,    
credits extended to the German public sector or to the public sector of certain 
other countries are assigned a risk weighting of 0%. Swaps, forward             
transactions and option rights are converted into credit equivalents, which are 
then risk-weighted, up to a maximum weighting of 50%.                           

To limit market risks resulting from activities such as trading book    
interest and share transactions or currency and commodity provisions, banks     
must maintain Regulatory Liable Capital in a certain amount corresponding to    
the risk associated with these positions. Principle I specifies certain         
standard procedures to be followed in order to determine such risks. Banks are, 
however, permitted to use their own risk determination procedures with the      
prior approval of the GFSA.                                                     

   Under the Banking Act's provisions on consolidated supervision, the capital
adequacy rules must not only be met by a bank separately, but also by the bank  
and all banks, financial services institutions, financial enterprises or bank   
service enterprises of the bank that are subsidiaries of the bank or that are   
20% or more owned by the bank or an affiliate on a consolidated basis, if       
certain other conditions are met.                                               

We meet the risk-based capital adequacy rules of the Banking Act.       

 The Basel Committee on Banking Supervision has promulgated proposals that
would alter the currently agreed international requirements for the capital     
adequacy of banks. These changes could have the effect of increasing the costs  
of borrowing by small and medium-sized enterprises of the sort that make up the 
core of our customer base. It is currently not known whether and in what form   
the proposals will be adopted or what their effect on Rentenbank will be.       

LIQUIDITY AND OTHER REGULATORY REQUIREMENTS                                     

Bank liquidity levels are determined pursuant to Principle II. Under    
Principle II, we must maintain sufficient liquidity to meet our pending payment 
obligations.                                                                    

  At the end of each month, the GFSA evaluates whether the liquidity of each
reporting bank is sufficient based on a liquidity figure (Liquiditatskennzahl). 
The liquidity figure represents the relation between the means of payment       
available in the first maturity period and the payment obligations which may    
arise during the same period. Liquidity is considered sufficient if the         
liquidity figure is not below 1.0. For liquidity obligations in the second to   
fourth bands, each bank must calculate its so-called liquidity monitoring       
figures (Beobachtungskennzahlen). Banks must calculate their liquidity          
monitoring figures at the end of each month. These figures are filed with the   
appropriate regional office of the Deutsche Bundesbank, which then transmits    
them to the GFSA.                                                               

    Under the Banking Act, a bank's large credit  (Grosskredite)  exposures to a
single  borrower or connected group of borrowers that equal or exceed 10% of the
bank's Regulatory Liable Capital are subject to a number of restrictions.  These
essentially consist of the following:                                           

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   *     these exposures may not exceed in the aggregate eight times the
bank's Regulatory Liable Capital;                     

    *     no single large exposure may exceed 25% of the bank's Regulatory
Liable Capital; and                                   

     *     no single large exposure to a bank's unconsolidated affiliate may
exceed 20% of the bank's Regulatory Liable Capital    

The limitations on large credit exposures are applied on a risk-adjusted
basis in a manner similar to the application of Principle I.                    

    The limitations on large credit exposures also apply to a bank and all other
companies that form a group with a bank (as discussed under "-- Capital         
Adequacy Requirements" above), on a consolidated basis. To determine whether a  
group has a large exposure, the exposures by the members of the group to one    
borrower are fully consolidated and are measured against the consolidated       
Regulatory Liable Capital of the group. The consolidated limitation of large    
credit exposures only applies if an exposure of one member of the group is      
equal to or exceeds 5% of that member's Regulatory Liable Capital.              

AUDITS                                                                          

   Under German law, Rentenbank itself and its consolidated group must both be
audited annually by a certified public accountant (Wirtschaftsprufer) who is    
appointed by our advisory board with the consent of the Federal Ministry for    
Consumer Protection, Food and Agriculture and the Federal Ministry of Finance.  
The GFSA must be informed of and may reject this appointment. Under the Banking 
Act, a bank's public accountant is required to inform the GFSA of any facts     
coming to his or her attention which give reason to deny or qualify the         
certification of the bank's annual financial statements or materially adversely 
affect the financial position of the bank, as well as of any material breach by 
the bank's management of the law or the bank's articles of association.         

  The certified public accountant is required to prepare annually a detailed
and comprehensive long-form audit report, which is submitted to our management  
board and advisory board, the GFSA and the Deutsche Bundesbank. The contents of 
the report are prescribed in a regulation issued by the GFSA. In the report the 
certified public accountant must confirm that the bank has complied with, inter 
alia:                                                                           

*     the regulatory reporting requirements;                      

*     the large credit exposures calculations;                    

    *     the limitations on the extension of credit to related companies;

*     the Principles; and                                         

*     regulations concerning the prudential granting of credit.   

The audit report must also discuss in detail certain large or important 
credit exposures and confirm compliance with certain provisions of the Banking  
Act.                                                                            

  The GFSA also requires that the long-form audit report discuss and analyze
the method by which the bank determines the risk of a change in interest rates. 
The audit report must match assets and liabilities bearing interest at fixed    
rates according to maturity and assets and liabilities bearing interest at      
floating rates according to interest periods. The audit report must also        
explain the effect of a change of interest rates on the unmatched portion of    
such assets and liabilities, respectively.                                      

REPORTING REQUIREMENTS AND GFSA POWERS OF ENFORCEMENT                           

 To enable the GFSA and the Deutsche Bundesbank to monitor compliance with
the Banking Act and other applicable legal requirements and to obtain           
information on the financial condition of the German banks, the GFSA and the    
Deutsche Bundesbank require the routine, periodic filing of information.        

Each bank must file, annually, audited financial statements on a        
consolidated and unconsolidated basis and, monthly, balance sheet and           
statistical information and compliance statements regarding the risk-based      
capital adequacy rules. Each bank must file quarterly statements regarding loans
of euro 1.5 million or more, including syndicated loans exceeding this amount   
regardless of the reporting bank's share. In addition, each bank must notify the
GFSA and the Deutsche Bundesbank immediately of certain organizational changes, 
certain acquisitions and dispositions and changes in equity investments, changes
in the bank's capitalization and changes in significant shareholdings in the    
bank.                                                                           

To secure compliance with the Banking Act and the regulations issued    
thereunder, the GFSA and the Deutsche Bundesbank may require information and    
documents from a bank. The GFSA may also conduct investigations of a bank       
without having to give any particular reason. In addition, the GFSA can attend  

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meetings of the bank's supervisory board and may require such meetings to be    
convened. The GFSA also conducts audits of banks on a random basis as well as   
in special circumstances.                                                       

    If a bank holds a significant interest in other domestic or foreign banks or
other companies that form a group with the bank for German regulatory purposes, 
the bank must have access to information as to the capital and the large credit 
exposures of these other companies in order to comply with the requirements of  
the Banking Act (and regulations issued thereunder) with respect to risk-based  
capital adequacy and limitations on large credit exposures, including the       
requirements which provide for reporting on a consolidated basis. The Banking   
Act obliges German companies that are part of a group for German regulatory     
purposes to provide this information to the German parent bank and obliges the  
German parent bank to agree with foreign companies that are part of its group   
on the supply of appropriate information. If it is not possible for the parent  
bank to obtain from a company information necessary for the consolidation       
procedure, the book value of the investment in the company must be deducted     
when computing the Regulatory Liable Capital of the parent bank.                

   In the event that the GFSA discovers irregularities, it has a wide range of
enforcement powers. The GFSA can challenge the qualifications of a bank's       
management. If the Regulatory Liable Capital of a bank is not adequate, or if   
the liquidity requirements are not met and the bank has failed to remedy the    
deficiency within a period determined by the GFSA, the GFSA may prohibit or     
restrict the withdrawal of capital, the distribution of profits or the          
extension of credit. These prohibitions also apply to the parent bank of a      
group for bank regulatory purposes if the Regulatory Liable Capital of the      
members of the group does not meet the legal requirements. If the liquidity     
requirements are not met, the GFSA may also prohibit further investments in     
illiquid assets.                                                                

 If a bank is in danger of defaulting on its obligations to creditors, the
GFSA may take emergency measures to avert default. These measures may range     
from the issuance of instructions to the management of the bank to the          
revocation of the bank's license and closing of the bank, the prohibition of    
payments and disposals of assets, the suspension of customer services, and the  
acceptance of payments other than in payment of debt owed to the bank.          

Violations of the Banking Act may result in criminal and administrative 
penalties.                                                                      

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 DEBT RECORD

Neither Rentenbank nor the Federal Republic has ever defaulted on the   
payment of, or premium or interest on, any security issued by it.               

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 DESCRIPTION OF THE SECURITIES

   The following briefly summarizes the terms and conditions of the Securities
to be offered by Rentenbank in distinct series from time to time, and the       
Fiscal Agency Agreement in respect of the Securities. Copies of the form of the 
Securities and the form of the Fiscal Agency Agreement are filed as exhibits to 
the Registration Statement of which this prospectus is a part. This summary is  
not complete and is qualified in its entirety by reference to such exhibits.    
Terms that are used in this prospectus and that are defined in the Fiscal       
Agency Agreement have the respective meanings given to them in the Fiscal       
Agency Agreement, unless they are otherwise defined in this prospectus.         

GENERAL                                                                         

  Rentenbank may issue Securities in distinct series from time to time. This
section summarizes the terms of the Securities that are common to all series of 
Securities. The financial and other specific terms of your series are described 
in the applicable prospectus supplement, which is attached to or accompanies    
this prospectus. If the terms described in the prospectus supplement applicable 
to your Securities differ from the terms described in this prospectus, you      
should rely on the terms described in the prospectus supplement.                

  The prospectus supplement that relates to your Securities will specify the
following terms:                                                                

*     the title of the Securities;                                

      *     the price or prices at which Rentenbank will issue the Securities;

      *     the aggregate principal amount, and any limitation of that amount,
of the Securities;                                    

    *     the currency in which the Securities will be denominated and the
     denominations in which Rentenbank may issue the Securities;

       *     the maturity date of the Securities, on which Rentenbank must repay
principal;                                            

*     the currency or currencies and in which Rentenbank may pay  
principal and interest;                               

     *     the interest rate, if any, which the Securities will bear and, if
             variable, the method by which the interest rate will be determined;

    *     the date from which interest will accrue, and the dates on which
           Rentenbank must pay interest, and the record dates for payment of
interest;                                             

   *     whether any amount payable on the Securities will be determined
           based on an index, price or formula, and how any such amount will
be determined;                                        

*     where and how Rentenbank will pay principal and interest;   

    *     whether and in what circumstances the Securities may be redeemed
before maturity;                                      

     *     whether the Securities may be issued in fully registered form, in
             bearer form with interest coupons, or both, and any restrictions on
the exchange of one form for the other;               

      *     in the case of bearer Securities, any applicable United States tax
restrictions;                                         

      *     whether any part or all of the Securities will be in the form of a
             global security and the circumstances in which a global security is
  exchangeable for certificated (physical) Securities; and

*     any other terms of the Securities.                          

If applicable, the prospectus supplement that relates to your Securities
will describe whether and in what circumstances they will be exchangeable for   
other Securities. The prospectus supplement that relates to your Securities     
will also describe any special United States federal income tax or other        
considerations applicable to your Securities.                                   

Rentenbank has appointed Deutsche Bank Trust Company Americas (formerly 
Bankers Trust Company) as fiscal agent (the "Fiscal Agent") in connection with  
each series of Securities. The duties of the Fiscal Agent are governed by a     
fiscal agency agreement dated October 16, 2001 between Rentenbank and Bankers   
Trust Company (the "Fiscal Agency Agreement"). The Fiscal Agent for any series  
will be the same as the Fiscal Agent for any other series. Rentenbank may       
replace the Fiscal Agent, which is Rentenbank's agent. The Fiscal Agent is not  
a trustee for the holders of Securities, nor does it have a trustee's           
responsibilities or duties to act for them. So long as no conflict of interest  
arises, the Fiscal Agent may engage or be interested in any financial or other  
transaction with Rentenbank.                                                    

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RANK OF SECURITIES                                                              

The Securities, when issued, will not be secured by any of Rentenbank's 
property or assets and will not be subordinated to any of Rentenbank's other    
general obligations. The Securities therefore will rank equally with each other 
and with all of Rentenbank's other unsecured and unsubordinated indebtedness,   
subject to certain exceptions mandated under German law.                        

ADDITIONAL AMOUNTS                                                              

All payments of, or in respect of, principal of, and interest on, the   
Securities by Rentenbank or any substitute obligor (as defined under "--        
Substitution of Rentenbank" below) permitted by the terms of the Securities     
will be made without deduction or withholding for or on account of any present  
or future taxes, assessments, duties or other governmental charges imposed or   
levied by or on behalf of the Federal Republic or any political subdivision     
thereof or any authority or agency therein or thereof having power to tax       
(including any such amounts deducted or withheld under any law or directive of  
the European Union that has the effect of law in the Federal Republic) ("German 
tax"), unless the withholding or deduction of the German tax is required by     
law. In that event, Rentenbank or the substitute obligor shall pay such         
additional amounts ("Additional Amounts") as may be necessary in order that the 
net amounts receivable by the holder of the Securities after such withholding   
or deduction shall equal the respective amounts which would have been           
receivable by the holder in the absence of the withholding or deduction, except 
that no additional amounts shall be payable with respect to any Securities:     

      *     to, or to a third party on behalf of, a holder or beneficial owner
           of Securities who is liable for such German tax in respect of the
             Securities by reason of his having some connection with the Federal
        Republic other than merely holding the Securities or receiving
            principal, interest or other amounts in respect of the Securities;

    *     where any such German tax is imposed or levied otherwise than by
             deduction or withholding from any payment of principal or interest;

     *     where such withholding or deduction is imposed on a payment to an
        individual and is required to be made pursuant to any European
     Union Directive on the taxation of savings implementing the
             conclusions of the ECOFIN Council meeting of 26-27 November 2000 or
           any law implementing or complying with, or introduced in order to
conform to, such Directive or law; or                 

       *     which are presented (where presentation is required) for payment by
  or on behalf of a holder who would be able to avoid such
           withholding or deduction by presenting the relevant Securities to
       another Paying Agent in a Member State of the European Union.

   If Rentenbank or a substitute obligor becomes subject generally at any time
to any taxing jurisdiction other than or in addition to the jurisdiction of the 
Federal Republic, the requirement to pay Additional Amounts shall also apply    
with reference to such other jurisdiction(s). For the avoidance of ambiguity,   
in such circumstances, the reference to German tax above will be treated as     
including any taxes, assessments, duties or other governmental charges imposed  
or levied by or on behalf of such other taxing jurisdiction or any political    
subdivision thereof or any authority or agency therein or thereof having the    
power to tax.                                                                   

REDEMPTION FOR TAX REASONS                                                      

If Rentenbank or any substitute obligor must pay you additional amounts 
because of tax law changes effective after the date of the prospectus           
supplement for your series of Securities in the case of Rentenbank or after the 
date the substitute obligor became such in the case of a substitute obligor,    
Rentenbank or the substitute obligor may redeem all of the outstanding          
Securities in your series. If Rentenbank or the substitute obligor decides to   
redeem your Securities, it will give you at least 30 days' notice, and will pay 
you the principal amount of your Securities plus any accrued interest.          
Rentenbank or the substitute obligor cannot notify you that it will redeem your 
Securities until 90 days before the earliest date on which it must pay          
additional amounts if it made payment on your Securities on that date.          

REDEMPTION AT HOLDER'S OPTION                                                   

Except as otherwise specified in the prospectus supplement relating to a
particular series of Securities, if as a result of a change in the ownership of 
our capital stock, a change in the laws of the Federal Republic, a change in the
official interpretation of those laws, or any action taken by the Federal       
Republic, its legislative bodies, political subdivisions or courts, our         
obligations under the Securities are no longer fully backed by the credit of the
Federal Republic under the public law principle of institutional liability      
(Anstaltslast) or by any replacement instrument, the Securities may be redeemed 
at the option of the                                                            

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holders. Under the terms of the Securities, these events are referred to as     
"Redemption Events". After a Redemption Event occurs, Rentenbank will give      
notice to the Fiscal Agent, who will send each holder a notice of their right to
redeem. Holders of the Securities will have 60 days from the time they receive  
this notice from the Fiscal Agent to return the notice and the certificates     
representing the Securities to be redeemed. After this 60-day period, holders   
will not have the option to redeem the Securities unless a new Redemption Event 
occurs. The redemption price will equal 100% of the principal amount plus any   
accrued interest.                                                               

EVENTS OF DEFAULT                                                               

The holder of any Security may, by written notice to Rentenbank and the 
Fiscal Agent, to be addressed to the specified office of the Fiscal Agent,      
declare such Security due and payable immediately if:                           

       *     Rentenbank fails to pay any amount of principal of (and premium, if
             any) or interest on the Securities of such series within 30 days of
the due date for payment thereof; or                  

      *     Rentenbank defaults in the performance or observance of any of its
         other obligations under or in respect of the Securities of such
       series (except in any case where such default is incapable of
       remedy when no such continuation or notice, as is hereinafter
          mentioned, will be required) and such default remains unremedied
       for 90 days after written notice requiring such default to be
           remedied has been delivered to Rentenbank, as the case may be, by
          hand or by registered mail at the specified office of the Fiscal
Agent by such holder; or                              

   *     Rentenbank stops or suspends payment of its debts generally, or
       announces its inability to meet its financial obligations; or

    *     A court opens bankruptcy or other insolvency proceedings against
       Rentenbank, such proceedings are instituted and have not been
           discharged or stayed within 60 days, or Rentenbank applies for or
            institutes such proceedings or takes any action for a readjustment
      or deferment of its obligations generally or makes a general
            assignment or composition with or for the benefit of its creditors
     or declares a moratorium in respect of its indebtedness; or

     *     Rentenbank goes into liquidation or is dissolved according to its
         governing law, unless this is done in connection with a merger,
           consolidation or other form of combination with or into any other
          company or entity not involving or arising out of insolvency and
            such other or new company or entity assumes all of the obligations
of Rentenbank under the Securities of such series.    

    Because each series of Securities shall be independent of each other series,
a default with respect to one series of Securities will not, in itself,         
constitute a default with respect to, or permit the acceleration of maturity    
of, Securities of a different series, except in the case of the events of       
default described in the last three bullet points above.                        

AMENDMENTS                                                                      

Rentenbank and the Fiscal Agent may, without the vote or consent of any 
holder of Securities, amend the Fiscal Agency Agreement or the Securities of    
any series in order to:                                                         

     *     add to the covenants of Rentenbank for the benefit of the holders
of Securities;                                        

*     surrender any right or power conferred upon Rentenbank;     

*     secure the Securities;                                      

   *     cure any ambiguity or cure, correct or supplement any defective
        provision of the Fiscal Agency Agreement or the Securities; or

      *     amend the Fiscal Agency Agreement or the Securities of such series
           in any manner which Rentenbank and the Fiscal Agent may determine
         and which is not inconsistent in any material respect with such
        Securities and which does not adversely affect in any material
respect the interest of any holder of such Securities.

    Rentenbank  and the Fiscal Agent may also,  with the written  consent of the
holders of a majority of the principal  amount of the  Securities of any series,
modify any of the other terms or provisions of the Securities of that series or,
insofar as relates to that series,  the Fiscal Agency Agreement.  However,  each
and every holder of the  Securities of a series must consent to any amendment or
provision of the  Securities of that series or the Fiscal Agency  Agreement that
would:                                                                          

*     change the due date for the payment of the principal of (or 
            premium, if any) or any installment of interest on any Security of
that series;                                          

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   *     reduce the principal amount of any Security of that series, the
             portion of such principal amount which is payable upon acceleration
            of the maturity of such Security, the interest rate thereon or the
premium payable upon redemption thereof;              

  *     change the coin or currency in which or the required places at
         which payment with respect to interest, premium or principal in
respect of the Securities of that series is payable;  

  *     shorten the period during which Rentenbank is not permitted to
       redeem the Securities of that series, or permit Rentenbank to
        redeem the Securities of such series if, prior to such action,
Rentenbank is not permitted to do so;                 

      *     reduce the proportion of the principal amount of the Securities of
    that series the vote or consent of the holders of which is
    necessary to modify, amend or supplement the Fiscal Agency
         Agreement or the terms and conditions of those Securities or to
           make, take or give any request, demand, authorization, direction,
        notice, consent, waiver or other action provided thereby to be
made, taken or given; or                              

  *     change the obligation of Rentenbank to pay additional amounts.

SUBSTITUTION OF RENTENBANK                                                      

Rentenbank may at any time substitute for itself any other company as   
principal debtor in respect of the Securities of any series so long as the      
successor obligor, which we refer to as a substitute obligor, is a company 100% 
of which is owned, directly or indirectly, by Rentenbank. Any such substitution 
will not require the consent of holders of the Securities of that series, but   
Rentenbank will be required to guarantee the obligations of the substitute      
obligor under those Securities. No substitution may occur unless the substitute 
obligor is in a position to fulfill all payment obligations under such          
Securities without being required to withhold tax at source.                    

A substitution of another company as principal debtor in respect of the 
Securities of any series is likely to result in the recognition of gain or loss 
for United States federal income tax purposes by the holders of the Securities  
of that series and possibly other adverse tax consequences to those holders.    
Holders should consult their own tax advisors regarding the tax consequences of 
such a substitution.                                                            

FURTHER ISSUES OF SECURITIES OF SAME SERIES                                     

  Rentenbank may from time to time without the consent of the holders of the
Securities issue further Securities having identical terms and conditions so    
that such further Securities shall form a single series with an outstanding     
series of Securities.                                                           

Rentenbank may offer additional Securities which could be deemed to have
original issue discount ("OID") for United States federal income tax purposes   
as part of such further issue. Purchasers of Securities of the applicable       
series after the date of the further issue will not be able to differentiate    
between Securities sold as part of the further issue and previously issued      
Securities of that series. Under such circumstances, purchasers of Securities   
of that series after the further issue may be required to accrue OID (or        
greater amounts of OID than they would otherwise have accrued) with respect to  
their Securities. This may affect the price of the previously outstanding       
Securities of the applicable series. Purchasers are advised to consult their    
own advisors regarding the implications of any future decision by Rentenbank to 
undertake a further issue of Securities with OID.                               

JURISDICTION                                                                    

    Rentenbank will accept the jurisdiction of any state or federal court in the
Borough of Manhattan, The City of New York, in respect of any action arising out
of or based on the Securities that may be maintained by any holder of those     
Securities. Rentenbank will appoint Corporation Service Company in The City of  
New York as its authorized agent upon which process in any such action may be   
served. Rentenbank will irrevocably waive any immunity to which it might        
otherwise be entitled in any action arising out of or based upon the Securities 
brought in any state or federal court in the Borough of Manhattan, the City of  
New York.                                                                       

Rentenbank is also subject to suit in competent courts in the Federal   
Republic to the extent permitted by German law.                                 

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GOVERNING LAW                                                                   

The Fiscal Agency Agreement and the Securities will be governed by, and 
interpreted in accordance with, the internal laws of the State of New York,     
except that all matters governing Rentenbank's authorization of issuance of any 
Securities shall be governed by the laws of the Federal Republic.               

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 RESPONSIBILITY OF THE FEDERAL REPUBLIC FOR RENTENBANK

  Our obligations are effectively backed by the full faith and credit of the
Federal Republic. Under the German administrative law principle of              
Anstaltslast, or institutional liability, the Federal Republic is responsible   
for ensuring that we can meet our obligations, including our publicly issued    
debt securities, or our guarantee of debt securities should a Substitute        
Obligor be substituted for Rentenbank, when they are due. Under the             
Anstaltslast principle, the Federal Republic, as the government body            
establishing an entity with legal capacity such as Rentenbank, has an           
institutional liability to Rentenbank requiring the Federal Republic to         
safeguard Rentenbank's economic basis and to keep it in a position to pursue    
its operations and enable it, in the event of financial difficulties, through   
the allocation of funds or in some other appropriate manner, to perform its     
obligations when due. Anstaltslast is not a formal guarantee of our obligations 
by the Federal Republic, and our creditors do not have a direct claim against   
the Federal Republic under it. However, the Federal Republic is required on its 
own authority to take steps to enable us to perform our obligations when due.   
Moreover, under German law, we would be required to enforce our rights against  
the Federal Republic in the event we needed to do so in order to meet our       
obligations to third parties, including Security holders. The obligation of the 
Federal Republic under Anstaltslast would constitute a charge on public funds   
that, as a legally established obligation, would be payable without the need    
for any appropriation or any other action by the federal parliament.            

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 GERMAN TAXATION

   The following is a general discussion of certain German tax consequences of
the acquisition and ownership of Notes by persons who are not tax residents of  
Germany (i.e., persons whose residence, habitual abode, statutory seat, or      
place of effective management and control is not located in Germany).           

 This discussion does not purport to be a comprehensive description of all
tax considerations which may be relevant to a decision to purchase Notes. In    
particular, this discussion does not consider any specific facts or             
circumstances that may apply to a particular purchaser. This summary is based   
on the laws of Germany currently in force and as applied on the date of this    
prospectus, which are subject to change, possibly with retroactive effect.      

PROSPECTIVE PURCHASERS OF NOTES ARE ADVISED TO CONSULT THEIR OWN TAX    
ADVISORS AS TO THE TAX CONSEQUENCES OF THE PURCHASE, OWNERSHIP AND DISPOSITION  
OF NOTES, INCLUDING THE EFFECT OF ANY STATE OR LOCAL TAXES, UNDER THE TAX LAWS  
IN GERMANY AND EACH COUNTRY OF WHICH THEY ARE RESIDENTS.                        

INCOME TAX                                                                      

  Payments of interest on the Notes, including interest having accrued up to
the sale of a Note and credited separately ("Accrued Interest") as well as      
amounts equal to the difference between the issue price of the Note and the     
redemption amount which upon maturity of a Note the initial subscriber to the   
Note receives, in addition to or, as in the case of a zero coupon Note, instead 
of the current interest ("Original Issue Discount") are not subject to German   
taxation (personal or corporate income tax, solidarity surcharge thereon and    
possibly also trade tax), unless (i) the Notes form part of the business        
property of a permanent establishment, including a permanent representative, or 
a fixed base maintained in Germany by the holder of a Note or (ii) the interest 
income otherwise constitutes income taxable in Germany (such as income from the 
letting and leasing of certain German-situs property). In these latter cases    
and provided that the Note can be classified as a financial innovation          
(Finanzinnovation) under German tax law, including, among other things, zero    
coupon Notes, discounted Notes, and is purchased or disposed of while           
outstanding, or redeemed at maturity, the Original Issue Discount to the extent 
attributable to the period over which the holder of a Note has held such Note   
or, alternatively, the difference between the proceeds from the sale or         
redemption and the purchase price is subject to personal or corporate income    
tax in the year of the sale or maturity of the Note, unless the Note forms part 
of the property of a German trade or business, in which case each year the part 
of the Original Issue Discount attributable to such year as well as interest    
accrued must be taken into account proportionately as interest income and may   
also be subject to trade tax. Where the Note is expressed in a currency other   
than the Euro, the difference referred to in the preceding sentence is computed 
as the difference between the foreign-currency denominated proceeds and the     
foreign-currency denominated price. Capital gains from the disposition of Notes 
other than income from Original Issue Discount exceeding certain thresholds     
are, however, only taxable in the case of (i) above.                            

WITHHOLDING TAX                                                                 

   Nonresidents of Germany are, in general, exempt from German withholding tax
on interest and solidarity surcharge thereon. However, where the interest is    
subject to German taxation as set forth in the preceding paragraph and the      
Notes are held in a custodial account with a German branch of a German or non-  
German financial or financial services institution (the "Disbursing Agent"),    
withholding tax is levied as it is levied in case of German tax residents,      
i.e., a 30% withholding tax on interest payments (Zinsabschlag), plus 5.5%      
solidarity surcharge on such tax, will be levied, resulting in a total tax      
charge of 31.65% of the gross interest payment. Withholding tax is also imposed 
on Accrued Interest. If the Notes qualify as financial innovations, as          
explained above, and are kept in a custodial account which the Noteholder       
maintains with a Disbursing Agent such Agent will generally withhold tax at a   
rate of 30% (plus solidarity surcharge at a rate of 5.5% thereon) from interest 
payments, Accrued Interest as well as from the difference between the issue or  
purchase price of the Notes and the redemption amount or sales proceeds if the  
Noteholder has kept the Note in the custodial account since the time of         
issuance or acquisition, respectively. Otherwise the 30% withholding tax is     
applied to 30% of the amounts paid in partial or final redemption of the Notes  
or the proceeds from the sale of the Notes, respectively.                       

    In computing the tax to be withheld the Disbursing Agent may deduct from the
basis of the withholding  tax any Accrued  Interest paid by the holder of a Note
to the Disbursing Agent during the same calendar year.                          

   Where Notes are not kept in a custodial account with a Disbursing Agent and
interest or proceeds from the disposition or redemption of a Note are paid by a 
Disbursing Agent to a nonresident, the                                          

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withholding tax will apply at a rate of 35% of the gross amount of interest     
paid by a Disbursing Agent upon presentation of a Coupon (whether or not        
presented with the Note to which it appertains) to a holder of such Coupon      
(other than a non-German financial or financial services institution). In this  
case proceeds from the disposal or redemption of a Coupon, and if the Notes     
qualify as financial innovations 30% of the proceeds from the disposal or       
redemption of a Note, will also be subject to withholding tax at a rate of 35%. 
Where the 35% withholding tax applies no Accrued Interest paid can be taken into
account in determining the withholding tax base. Again solidarity surcharge at a
rate of 5.5% of the withholding tax applies so that the total tax burden to be  
withheld is 36.925%.                                                            

    Withholding tax and solidarity surcharge thereon are credited as prepayments
against the German personal or corporate income tax and the solidarity          
surcharge liability of the German resident. Amounts overwithheld will entitle   
the holder of a Note to a refund, based on an assessment to tax.                

INHERITANCE AND GIFT TAX                                                        

  No inheritance or gift taxes with respect to any Note will arise under the
laws of Germany, if, in the case of inheritance tax, neither the decedent nor   
the beneficiary, or, in the case of gift tax, neither the donor nor the donee,  
is a resident of Germany and such Note is not attributable to a German trade or 
business for which a permanent establishment is maintained, or a permanent      
representative has been appointed, in Germany. Exceptions from this rule apply  
to certain German expatriates.                                                  

OTHER TAXES                                                                     

   No stamp, issue, registration or similar taxes or duties will be payable in
Germany in connection with the issuance, delivery or execution of the Notes.    
Currently, net assets tax is not levied in Germany.                             

PROPOSED EU SAVINGS TAX DIRECTIVE                                               

    On 13 December 2001, the Council of the European Union (ECOFIN) approved for
the purpose of negotiations with third countries a new draft directive          
regarding the taxation of savings income. It is proposed that each EU Member    
State under its domestic law requires paying agents (within the meaning of the  
directive) established within its territory to provide to the competent         
authority of its EU Member State of establishment details of the payment of     
interest (within the meaning of the directive) to an individual resident in     
another EU Member State. The competent authority of the EU Member State of the  
paying agent shall then communicate this information to the competent authority 
of the EU Member State of which the recipient is a resident. The proposed       
directive is to be implemented by the EU Member States by 1 January 2004.       
However, for a transitional period of seven years thereafter Austria, Belgium   
and Luxembourg may opt instead to levy a withholding tax at a rate of 15% for   
the first three years and 20% for the remainder of the period. It is envisaged  
that the Council of the European Union (ECOFIN) will decide on a final text of  
the directive no later than 31 December 2002. However, since the adoption of    
the proposal is subject to certain non EU Member States and associated          
territories and dependencies of EU Member States also agreeing to supply        
information or imposing a withholding tax it is currently not possible to       
predict whether, when, or in what form the proposal will ultimately be adopted. 

  Holders who are individuals should note that, if this proposal is adopted,
the Issuer will not pay additional amounts under of the Terms and Conditions of 
the Notes in respect of any withholding tax imposed as a result thereof.        

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UNITED STATES TAXATION

This section describes the material United States federal income tax    
consequences of owning the Securities and is the opinion of Sullivan &          
Cromwell, special tax counsel to Rentenbank. It applies to you only if you hold 
your Securities as capital assets for tax purposes. This section does not apply 
to you if you are a member of a class of holders subject to special rules, such 
as:                                                                             

*     a dealer in securities or currencies,                       

     *     a trader in securities that elects to use a mark-to-market method
of accounting for your securities holdings,           

*     a bank,                                                     

*     a life insurance company,                                   

*     a tax-exempt organization,                                  

     *     a person that owns Securities that are a hedge or that are hedged
against interest rate or currency risks,              

     *     a person that owns Securities as part of a straddle or conversion
transaction for tax purposes, or                      

       *     a person whose functional currency for tax purposes is not the U.S.
dollar.                                               

  This section deals only with Securities that are due to mature 30 years or
less from the date on which they are issued. The United States federal income   
tax consequences of owning Securities that are due to mature more than 30 years 
from their date of issue will be discussed in an applicable prospectus          
supplement. This section is based on the Internal Revenue Code of 1986, as      
amended, its legislative history, existing and proposed regulations under the   
Internal Revenue Code, published rulings and court decisions, all as currently  
in effect. These laws are subject to change, possibly on a retroactive basis.   

 Please consult your own tax advisor concerning the consequences of owning
these Securities in your particular circumstances under the Internal Revenue    
Code and the laws of any other taxing jurisdiction.                             

UNITED STATES HOLDERS                                                           

 This subsection describes the tax consequences to a United States holder.
You are a United States holder if you are a beneficial owner of a Security and  
you are:                                                                        

*     a citizen or resident of the United States,                 

*     a domestic corporation,                                     

     *     an estate whose income is subject to United States federal income
tax regardless of its source, or                      

     *     a trust if a United States court can exercise primary supervision
       over the trust's administration and one or more United States
            persons are authorized to control all substantial decisions of the
trust.                                                

    If you are not a United States holder, this subsection does not apply to you
and you should refer to "-- United States Alien Holders" below.                 

PAYMENTS OF INTEREST                                                            

Except as described below in the case of interest on a discount Security
that is not qualified stated interest, each as defined below under "-- Original 
Issue Discount -- General", you will be taxed on any interest on your Security, 
whether payable in U.S. dollars or a foreign currency, including a composite    
currency or basket of currencies other than U.S. dollars, as ordinary income at 
the time you receive the interest or when it accrues, depending on your method  
of accounting for tax purposes.                                                 

  Interest paid by us on the Securities and original issue discount, if any,
accrued with respect to the Securities (as described below under "Original      
Issue Discount") constitutes income from sources outside the United States,     
but, with certain exceptions, will be "passive" or "financial services" income, 
which is treated separately from other types of income for purposes of          
computing the foreign tax credit allowable to a United States holder.           

     Cash Basis Taxpayers. If you are a taxpayer that uses the cash receipts and
disbursements method of accounting for tax purposes and you receive an interest 
payment that is denominated in, or determined by reference to, a foreign        
currency, you must recognize income equal to the U.S. dollar value of the       
interest payment, based on the exchange rate in effect on the date of receipt,  
regardless of whether you actually convert the payment into U.S. dollars.       

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  Accrual Basis Taxpayers. If you are a taxpayer that uses an accrual method
of accounting for tax purposes, you may determine the amount of income that you 
recognize with respect to an interest payment denominated in, or determined by  
reference to, a foreign currency by using one of two methods. Under the first   
method, you will determine the amount of income accrued based on the average    
exchange rate in effect during the interest accrual period or, with respect to  
an accrual period that spans two taxable years, that part of the period within  
the taxable year.                                                               

If you elect the second method, you will determine the amount of income 
accrued on the basis of the exchange rate in effect on the last day of the      
accrual period, or, in the case of an accrual period that spans two taxable     
years, the exchange rate in effect on the last day of the part of the period    
within the taxable year. Additionally, under this second method, if you receive 
a payment of interest within five business days of the last day of your accrual 
period or taxable year, you may instead translate the interest accrued into     
U.S. dollars at the exchange rate in effect on the day that you actually        
receive the interest payment. If you elect the second method it will apply to   
all debt instruments that you hold at the beginning of the first taxable year   
to which the election applies and to all debt instruments that you subsequently 
acquire. You may not revoke this election without the consent of the Internal   
Revenue Service.                                                                

When you actually receive an interest payment, including a payment      
attributable to accrued but unpaid interest upon the sale or retirement of your 
Security, denominated in, or determined by reference to, a foreign currency for 
which you accrued an amount of income, you will recognize ordinary income or    
loss measured by the difference, if any, between the exchange rate that you     
used to accrue interest income and the exchange rate in effect on the date of   
receipt, regardless of whether you actually convert the payment into U.S.       
dollars.                                                                        

ORIGINAL ISSUE DISCOUNT                                                         

    General. If you own a Security, other than a short-term Security with a term
of one year or less, it will be treated as a discount Security issued at an     
original issue discount or "OID" if the amount by which the Security's stated   
redemption price at maturity exceeds its issue price is more than a de minimis  
amount. Generally, a Security's issue price will be the first price at which a  
substantial amount of Securities included in the issue of which the Security is 
a part is sold to persons other than bond houses, brokers, or similar persons   
or organizations acting in the capacity of underwriters, placement agents, or   
wholesalers. A Security's stated redemption price at maturity is the total of   
all payments provided by the Security that are not payments of qualified stated 
interest. Generally, an interest payment on a Security is qualified stated      
interest if it is one of a series of stated interest payments on a Security     
that are unconditionally payable at least annually at a single fixed rate, with 
certain exceptions for lower rates paid during some periods, applied to the     
outstanding principal amount of the Security. There are special rules for       
variable rate Securities that are discussed under "--Variable Rate Securities". 

   In general, your Security is not a discount Security if the amount by which
its stated redemption price at maturity exceeds its issue price is less than    
the de minimis amount of 1/4 of 1 percent of its stated redemption price at     
maturity multiplied by the number of complete years to its maturity. Your       
Security will have de minimis original issue discount if the amount of the      
excess is less than the de minimis amount. If your Security has de minimis      
original issue discount, you must include the de minimis amount in income as    
stated principal payments are made on the Security, unless you make the         
election described below under "--Election to Treat All Interest as Original    
Issue Discount". You can determine the includible amount with respect to each   
such payment by multiplying the total amount of your Security's de minimis      
original issue discount by a fraction equal to:                                 

*     the amount of the principal payment made                    

divided by:                                                       

*     the stated principal amount of the Security.                

Generally, if your discount Security matures more than one year from its
date of issue, you must include OID in income before you receive cash           
attributable to that income. The amount of OID that you must include in income  
is calculated using a constant-yield method, and generally you will include     
increasingly greater amounts of OID in income over the life of your Security.   
More specifically, you can calculate the amount of OID that you must include in 
income by adding the daily portions of OID with respect to your discount        
Security for each day during the taxable year or portion of the taxable year    
that you hold your discount Security. You can determine the daily portion by    
allocating to each day in any accrual period a pro rata portion of the OID      
allocable to that accrual period. You may select an accrual period of any length
with respect to your discount Security and you may vary the length of each      
accrual period over the term of your discount Security. However, no accrual     
period may be longer than one year                                              

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and each scheduled payment of interest or principal on the discount Security    
must occur on either the first or final day of an accrual period.               

You can determine the amount of OID allocable to an accrual period by:  

    *     multiplying your discount Security's adjusted issue price at the
     beginning of the accrual period by your Security's yield to
maturity, and then                                    

     *     subtracting from this figure the sum of the payments of qualified
           stated interest on your Security allocable to the accrual period.

    You must determine the discount Security's yield to maturity on the basis of
compounding at the close of each accrual period and adjusting for the length of 
each accrual period. Further, you determine your discount Security's adjusted   
issue price at the beginning of any accrual period by:                          

       *     adding your discount Security's issue price and any accrued OID for
each prior accrual period, and then                   

      *     subtracting any payments previously made on your discount Security
that were not qualified stated interest payments.     

If an interval between payments of qualified stated interest on your    
discount Security contains more than one accrual period, then, when you         
determine the amount of OID allocable to an accrual period, you must allocate   
the amount of qualified stated interest payable at the end of the interval,     
including any qualified stated interest that is payable on the first day of the 
accrual period immediately following the interval, pro rata to each accrual     
period in the interval based on their relative lengths. In addition, you must   
increase the adjusted issue price at the beginning of each accrual period in    
the interval by the amount of any qualified stated interest that has accrued    
prior to the first day of the accrual period but that is not payable until the  
end of the interval. You may compute the amount of OID allocable to an initial  
short accrual period by using any reasonable method if all other accrual        
periods, other than a final short accrual period, are of equal length.          

The amount of OID allocable to the final accrual period is equal to the 
difference between:                                                             

       *     the amount payable at the maturity of your Security, other than any
payment of qualified stated interest, and             

   *     your Security's adjusted issue price as of the beginning of the
final accrual period.                                 

Acquisition Premium. If you purchase your Security for an amount that is
less than or equal to the sum of all amounts, other than qualified stated       
interest, payable on your Security after the purchase date but is greater than  
the amount of your Security's adjusted issue price, as determined above under   
"-- General", the excess is acquisition premium. If you do not make the election
described below under "-- Election to Treat All Interest as Original Issue      
Discount", then you must reduce the daily portions of OID by a fraction equal   
to:                                                                             

       *     the excess of your adjusted basis in the Security immediately after
purchase over the adjusted issue price of the Security

divided by:                                                       

      *     the excess of the sum of all amounts payable, other than qualified
           stated interest, on the Security after the purchase date over the
Security's adjusted issue price.                      

Market Discount. You will be treated as if you purchased your Security, 
other than a short-term Security, at a market discount, and your Security will  
be a market discount Security if:                                               

       *     in the case of an initial purchaser, you purchase your Security for
          less than its issue price as determined above under "-- General"
and                                                   

*     in the case of all purchasers, the difference between the   
             Security's stated redemption price at maturity or, in the case of a
        discount Security, the Security's revised issue price, and the
             price you paid for your Security is equal to or greater than 1/4 of
             1 percent of your Security's stated redemption price at maturity or
        revised issue price, respectively, multiplied by the number of
             complete years to the Security's maturity. To determine the revised
            issue price of your Security for these purposes, you generally add
     any OID that has accrued and that has not been paid on your
Security to its issue price.                          

   If your Security's stated redemption price at maturity or, in the case of a
discount Security, its revised issue price, exceeds the price you paid for the  
Security by less than 1/4 of 1 percent multiplied by the                        

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number of complete years to the Security's maturity, the excess constitutes     
de minimis market discount, and the rules discussed below are not applicable to 
you.                                                                            

    You must treat any gain you recognize on the maturity or disposition of your
market discount Security as ordinary income to the extent of the accrued market 
discount on your Security. Alternatively, you may elect to include market       
discount in income currently over the life of your Security. If you make this   
election, it will apply to all debt instruments with market discount that you   
acquire on or after the first day of the first taxable year to which the        
election applies. You may not revoke this election without the consent of the   
Internal Revenue Service. If you own a market discount Security and do not make 
this election, you will generally be required to defer deductions for interest  
on borrowings allocable to your Security in an amount not exceeding the accrued 
market discount on your Security until the maturity or disposition of your      
Security.                                                                       

You will accrue market discount on your market discount Security on a   
straight-line basis unless you elect to accrue market discount using a          
constant-yield method. If you make this election, it will apply only to the     
Security with respect to which it is made and you may not revoke it.            

    Pre-Issuance Accrued Interest. An election may be made to decrease the issue
price of your Security by the amount of pre-issuance accrued interest if:       

*     a portion of the initial purchase price of your Security is 
attributable to pre-issuance accrued interest,        

    *     the first stated interest payment on your Security is to be made
within one year of your Security's issue date, and    

       *     the payment will equal or exceed the amount of pre-issuance accrued
interest.                                             

If this election is made, a portion of the first stated interest payment
will be treated as a return of the excluded pre-issuance accrued interest and   
not as an amount payable on your Security.                                      

Securities Subject to Contingencies Including Optional Redemption. Your 
Security is subject to a contingency if it provides for an alternative payment  
schedule or schedules applicable upon the occurrence of a contingency or        
contingencies, other than a remote or incidental contingency, whether such      
contingency relates to payments of interest or of principal. In such a case,    
you must determine the yield and maturity of your Security by assuming that the 
payments will be made according to the payment schedule most likely to occur    
if:                                                                             

     *     the timing and amounts of the payments that comprise each payment
schedule are known as of the issue date and           

  *     one of such schedules is significantly more likely than not to
occur.                                                

If there is no single payment schedule that is significantly more likely
than not to occur, other than because of a mandatory sinking fund, you must     
include income on your Security in accordance with the general rules that       
govern contingent payment obligations. These rules will be discussed in the     
applicable prospectus Supplement.                                               

Notwithstanding the general rules for determining yield and maturity, if
your Security is subject to contingencies, and either you or we have an         
unconditional option or options that, if exercised, would require payments to   
be made on the Security under an alternative payment schedule or schedules,     
then:                                                                           

     *     in the case of an option or options that we may exercise, we will
           be deemed to exercise or not to exercise an option or combination
            of options in the manner that minimizes the yield on your Security
and                                                   

       *     in the case of an option or options that you may exercise, you will
           be deemed to exercise or not to exercise an option or combination
             of options in the manner that maximizes the yield on your Security.

  If both you and we hold options described in the preceding sentence, those
rules will apply to each option in the order in which they may be exercised.    
You may determine the yield on your Security for the purposes of those          
calculations by using any date on which your Security may be redeemed or        
repurchased as the maturity date and the amount payable on the date that you    
chose in accordance with the terms of your Security as the principal amount     
payable at maturity.                                                            

 If a contingency, including the exercise of an option, actually occurs or
does not occur contrary to an assumption made according to the above rules      
then, except to the extent that a portion of your Security is repaid as a       
result of this change in circumstances and solely to determine the amount and   
accrual of OID, you must redetermine the yield and maturity of your Security by 
treating your Security as having been                                           

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retired and reissued on the date of the change in circumstances for an          
amount equal to your Security's adjusted issue price on that date.              

   Election to Treat All Interest as Original Issue Discount. You may elect to
include in gross income all interest that accrues on your Security using the    
constant-yield method described above under "-- General", with the              
modifications described below. For purposes of this election, interest will     
include stated interest, OID, de minimis original issue discount, market        
discount, de minimis market discount and unstated interest, as adjusted by any  
amortizable bond premium, described below under "-- Securities Purchased at a   
Premium", or acquisition premium.                                               

If you make this election for your Security, then, when you apply the   
constant-yield method:                                                          

*     the issue price of your Security will equal your cost,      

     *     the issue date of your Security will be the date you acquired it,
and                                                   

*     no payments on your Security will be treated as payments of 
qualified stated interest.                            

   Generally, this election will apply only to the Security for which you make
it; however, if the Security has amortizable bond premium, you will be deemed   
to have made an election to apply amortizable bond premium against interest for 
all debt instruments with amortizable bond premium, other than debt instruments 
the interest on which is excludible from gross income, that you hold as of the  
beginning of the taxable year to which the election applies or any taxable year 
thereafter. Additionally, if you make this election for a market discount       
Security, you will be treated as having made the election discussed above under 
"-- Market Discount" to include market discount in income currently over the    
life of all debt instruments that you currently own or later acquire. You may   
not revoke any election to apply the constant-yield method to all interest on a 
Security or the deemed elections with respect to amortizable bond premium or    
market discount Securities without the consent of the Internal Revenue Service. 

    Variable Rate Securities. Your Security will be a variable rate Security if:

       *     your Security's issue price does not exceed the total noncontingent
principal payments by more than the lesser of:        

       *   .015 multiplied by the product of the total noncontingent
                 principal payments and the number of complete years to maturity
from the issue date, or                       

           *   15 percent of the total noncontingent principal payments; and

     *     your Security provides for stated interest, compounded or paid at
least annually, only at:                              

*   one or more qualified floating rates,             

           *   a single fixed rate and one or more qualified floating rates,

*   a single objective rate, or                       

       *   a single fixed rate and a single objective rate that is a
qualified inverse floating rate.              

 Your Security will have a variable rate that is a qualified floating rate
if:                                                                             

     *     variations in the value of the rate can reasonably be expected to
          measure contemporaneous variations in the cost of newly borrowed
         funds in the currency in which your Security is denominated; or

*     the rate is equal to such a rate multiplied by either:      

          *   a fixed multiple that is greater than 0.65 but not more than
1.35 or                                       

        *   a fixed multiple greater than 0.65 but not more than 1.35,
increased or decreased by a fixed rate; and   

      *     the value of the rate on any date during the term of your Security
             is set no earlier than three months prior to the first day on which
           that value is in effect and no later than one year following that
first day.                                            

   If your Security provides for two or more qualified floating rates that are
within 0.25 percentage points of each other on the issue date or can reasonably 
be expected to have approximately the same values throughout the term of the    
Security, the qualified floating rates together constitute a single qualified   
floating rate.                                                                  

   Your Security will not have a qualified floating rate, however, if the rate
is subject to certain restrictions (including caps, floors, governors, or other 
similar restrictions) unless such restrictions are fixed throughout the term of 
the Security or are not reasonably expected to significantly affect the yield   
on the Security.                                                                

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   Your Security will have a variable rate that is a single objective rate if:

*     the rate is not a qualified floating rate,                  

      *     the rate is determined using a single, fixed formula that is based
           on objective financial or economic information that is not within
          the control of or unique to the circumstances of the issuer or a
related party, and                                    

      *     the value of the rate on any date during the term of your Security
             is set no earlier than three months prior to the first day on which
           that value is in effect and no later than one year following that
first day.                                            

Your Security will not have a variable rate that is an objective rate,  
however, if it is reasonably expected that the average value of the rate during 
the first half of your Security's term will be either significantly less than   
or significantly greater than the average value of the rate during the final    
half of your Security's term.                                                   

 An objective rate as described above is a qualified inverse floating rate
if:                                                                             

     *     the rate is equal to a fixed rate minus a qualified floating rate
and                                                   

      *     the variations in the rate can reasonably be expected to inversely
          reflect contemporaneous variations in the cost of newly borrowed
funds.                                                

Your Security will also have a single qualified floating rate or an     
objective rate if interest on your Security is stated at a fixed rate for an    
initial period of one year or less followed by either a qualified floating rate 
or an objective rate for a subsequent period, and either:                       

    *     the fixed rate and the qualified floating rate or objective rate
             have values on the issue date of the Security that do not differ by
more than 0.25 percentage points or                   

 *     the value of the qualified floating rate or objective rate is
intended to approximate the fixed rate.               

    In general, if your variable rate Security provides for stated interest at a
single qualified floating rate or objective rate, or one of those rates after a 
single fixed rate for an initial period, all stated interest on your Security   
is qualified stated interest. In this case, the amount of OID, if any, is       
determined by using, in the case of a qualified floating rate or qualified      
inverse floating rate, the value as of the issue date of the qualified floating 
rate or qualified inverse floating rate, or, for any other objective rate, a    
fixed rate that reflects the yield reasonably expected for your Security.       

If your variable rate Security does not provide for stated interest at a
single qualified floating rate or a single objective rate, and also does not    
provide for interest payable at a fixed rate other than a single fixed rate for 
an initial period, you generally must determine the interest and OID accruals   
on your Security by:                                                            

       *     determining a fixed rate substitute for each variable rate provided
under your variable rate Security,                    

     *     constructing the equivalent fixed rate debt instrument, using the
fixed rate substitute described above,                

    *     determining the amount of qualified stated interest and OID with
   respect to the equivalent fixed rate debt instrument, and

     *     adjusting for actual variable rates during the applicable accrual
period.                                               

When you determine the fixed rate substitute for each variable rate   
provided under the variable rate Security, you generally will use the value of  
each variable rate as of the issue date or, for an objective rate that is not a 
qualified inverse floating rate, a rate that reflects the reasonably expected   
yield on your Security.                                                         

    If your variable rate Security provides for stated interest either at one or
more qualified floating rates or at a qualified inverse floating rate, and also 
provides for stated interest at a single fixed rate other than at a single      
fixed rate for an initial period, you generally must determine interest and OID 
accruals by using the method described in the previous paragraph. However, your 
variable rate Security will be treated, for purposes of the first three steps   
of the determination, as if your Security had provided for a qualified floating 
rate, or a qualified inverse floating rate, rather than the fixed rate. The     
qualified floating rate, or qualified inverse floating rate, that replaces the  
fixed rate must be such that the fair market value of your variable rate        
Security as of the issue date approximates the fair market value of an          
otherwise identical debt instrument that provides for the qualified floating    
rate, or qualified inverse floating rate, rather than the fixed rate.           

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 Short-Term Securities. In general, if you are an individual or other cash
basis United States holder of a short-term Security, you are not required to    
accrue OID, as specially defined below for the purposes of this paragraph, for  
United States federal income tax purposes unless you elect to do so (although   
it is possible that you may be required to include any stated interest in       
income as you receive it). If you are an accrual basis taxpayer, a taxpayer in  
a special class, including, but not limited to, a regulated investment company, 
common trust fund, or a certain type of pass-through entity, or a cash basis    
taxpayer who so elects, you will be required to accrue OID on short-term        
Securities on either a straight-line basis or under the constant-yield method,  
based on daily compounding. If you are not required and do not elect to include 
OID in income currently, any gain you realize on the sale or retirement of your 
short-term Security will be ordinary income to the extent of the accrued OID,   
which will be determined on a straight-line basis unless you make an election   
to accrue the OID under the constant-yield method, through the date of sale or  
retirement. However, if you are not required and do not elect to accrue OID on  
your short-term Securities, you will be required to defer deductions for        
interest on borrowings allocable to your short-term Securities in an amount not 
exceeding the deferred income until the deferred income is realized.            

When you determine the amount of OID subject to these rules, you must   
include all interest payments on your short-term Security, including stated     
interest, in your short-term Security's stated redemption price at maturity.    

Foreign Currency Discount Securities. If your discount Security is      
denominated in, or determined by reference to, a foreign currency, you must     
determine OID for any accrual period on your discount Security in the foreign   
currency and then translate the amount of OID into U.S. dollars in the same     
manner as stated interest accrued by an accrual basis United States holder, as  
described under "-- United States Holders -- Payments of Interest". You may     
recognize ordinary income or loss when you receive an amount attributable to    
OID in connection with a payment of interest or the sale or retirement of your  
Security.                                                                       

SECURITIES PURCHASED AT A PREMIUM                                               

If you purchase your Security for an amount in excess of its principal  
amount, you may elect to treat the excess as amortizable bond premium. If you   
make this election, you will reduce the amount required to be included in your  
income each year with respect to interest on your Security by the amount of     
amortizable bond premium allocable to that year, based on your Security's yield 
to maturity. If your Security is denominated in, or determined by reference to, 
a foreign currency, you will compute your amortizable bond premium in units of  
the foreign currency and your amortizable bond premium will reduce your         
interest income in units of the foreign currency. Gain or loss recognized that  
is attributable to changes in exchange rates between the time your amortized    
bond premium offsets interest income and the time of the acquisition of your    
Security is generally taxable as ordinary income or loss. If you make an        
election to amortize bond premium, it will apply to all debt instruments, other 
than debt instruments the interest on which is excludible from gross income,    
that you hold at the beginning of the first taxable year to which the election  
applies or that you thereafter acquire, and you may not revoke it without the   
consent of the Internal Revenue Service. See also "Original Issue Discount --   
Election to Treat All Interest as Original Issue Discount".                     

PURCHASE, SALE AND RETIREMENT OF THE SECURITIES                                 

  Your tax basis in your Security will generally be the U.S. dollar cost, as
defined below, of your Security, adjusted by:                                   

*     adding any OID or market discount, de minimis original issue
        discount and de minimis market discount previously included in
income with respect to your Security, and then        

    *     subtracting any payments on your Security that are not qualified
           stated interest payments and any amortizable bond premium applied
to reduce interest on your Security.                  

    If you purchase your Security with foreign currency, the U.S. dollar cost of
your Security will generally be the U.S. dollar value of the purchase price on  
the date of purchase. However, if you are a cash basis taxpayer, or an accrual  
basis taxpayer if you so elect, and your Security is traded on an established   
securities market, as defined in the applicable Treasury regulations, the U.S.  
dollar cost of your Security will be the U.S. dollar value of the purchase      
price on the settlement date of your purchase.                                  

   You will generally recognize gain or loss on the sale or retirement of your
Security equal to the difference between the amount you realize on the sale or  
retirement and your tax basis in your Security. If your Security is sold or     
retired for an amount in foreign currency, the amount you realize will be the   
U.S. dollar value of such amount on:                                            

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      *     the date payment is received, if you are a cash basis taxpayer and
            the Securities are not traded on an established securities market,
as defined in the applicable Treasury regulations,    

     *     the date of disposition, if you are an accrual basis taxpayer, or

       *     the settlement date for the sale, if you are a cash basis taxpayer,
             or an accrual basis taxpayer that so elects, and the Securities are
       traded on an established securities market, as defined in the
applicable Treasury regulations.                      

You will recognize capital gain or loss when you sell or retire your    
Security, except to the extent:                                                 

   *     described above under "-- Original Issue Discount -- Short-Term
Securities" or "-- Market Discount",                  

       *     attributable to accrued but unpaid interest that has not previously
been included in your taxable income,                 

*     the rules governing contingent payment obligations apply, or

 *     attributable to changes in exchange rates as described below.

    Capital gain of a non-corporate United States holder is generally taxed at a
maximum rate of 20% where the property is held more than one year, and 18%      
where the property is held for more than five years.                            

You must treat any portion of the gain or loss that you recognize on the
sale or retirement of a Security as ordinary income or loss to the extent       
attributable to changes in exchange rates. However, you take exchange gain or   
loss into account only to the extent of the total gain or loss you realize on   
the transaction.                                                                

EXCHANGE OF AMOUNTS IN OTHER THAN U.S. DOLLARS                                  

   If you receive foreign currency as interest on your Security or on the sale
or retirement of your Security, your tax basis in the foreign currency will     
equal its U.S. dollar value when the interest is received or at the time of the 
sale or retirement. If you purchase foreign currency, you generally will have a 
tax basis equal to the U.S. dollar value of the foreign currency on the date of 
your purchase. If you sell or dispose of a foreign currency, including if you   
use it to purchase Securities or exchange it for U.S. dollars, any gain or loss 
recognized generally will be ordinary income or loss.                           

INDEXED SECURITIES                                                              

   The applicable prospectus Supplement will discuss any special United States
federal income tax rules with respect to Securities the payments on which are   
determined by reference to any index and other Securities that are subject to   
the rules governing contingent payment obligations which are not subject to the 
rules governing variable rate Securities.                                       

UNITED STATES ALIEN HOLDERS                                                     

This subsection describes the tax consequences to a United States alien 
holder. You are a United States alien holder if you are the beneficial owner of 
a Security and are, for United States federal income tax purposes:              

*     a nonresident alien individual,                             

*     a foreign corporation,                                      

*     a foreign partnership, or                                   

   *     an estate or trust that in either case is not subject to United
           States federal income tax on a net income basis on income or gain
from a Security.                                      

 If you are a United States holder, this subsection does not apply to you.

  Subject to the discussion of backup withholding below, if you are a United
States alien holder of a Security, interest on a Security paid to you is exempt 
from United States federal income tax, including withholding tax, whether or    
not you are engaged in a trade or business in the United States, unless:        

      *     you are an insurance company carrying on a United States insurance
            business to which the interest is attributable, within the meaning
of the Internal Revenue Code, or                      

*     you both                                                    

 *     have an office or other fixed place of business in the United
States to which the interest is attributable and      

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     *     derive the interest in the active conduct of a banking, financing
or similar business within the United States.         

  Purchase, Sale, Retirement and Other Disposition of the Securities. If you
are a United States alien holder of a Security, you generally will not be       
subject to United States federal income tax on gain realized on the sale,       
exchange or retirement of a Security unless:                                    

     *     the gain is effectively connected with your conduct of a trade or
business in the United States or                      

       *     you are an individual, you are present in the United States for 183
            or more days during the taxable year in which the gain is realized
and certain other conditions exist.                   

    For purposes of the United States federal estate tax, the Securities will be
treated as situated outside the United States and will not be includible in the 
gross estate of a holder who is neither a citizen nor a resident of the United  
States at the time of death.                                                    

BACKUP WITHHOLDING AND INFORMATION REPORTING                                    

If you are a no corporate United States holder, information reporting   
requirements, on Internal Revenue Service Form 1099, generally will apply to:   

     *     payments of principal, any premium or interest (including OID) on
            your Security within the United States, including payments made by
        wire transfer from outside the United States to an account you
maintain in the United States, and                    

       *     the payment of the proceeds from the sale of a Security effected at
a United States office of a broker.                   

    Additionally, backup withholding will apply to such payments if you are a no
corporate United States holder that:                                            

*     fails to provide an accurate taxpayer identification number,

       *     is notified by the Internal Revenue Service that you have failed to
        report all interest and dividends required to be shown on your
federal income tax returns, or                        

*     in certain circumstances, fails to comply with applicable   
certification requirements.                           

If you are a United States alien holder, you are generally exempt from  
backup withholding and information reporting requirements with respect to:      

       *     payments of principal, any premium or interest (including OID) made
             to you outside the United States by us or another non-United States
payor and                                             

   *     other payments of principal, any premium or interest (including
          OID) and the payment of the proceeds from the sale of a Security
        effected at a United States office of a broker, as long as the
       income associated with such payments is otherwise exempt from
United States federal income tax, and:                

             *   the payor or broker does not have actual knowledge or reason to
                 know that you are a United States person and you have furnished
to the payor or broker:                       

              *   an Internal Revenue Service Form W-8BEN or an acceptable
                    substitute form upon which you certify, under penalties of
              perjury, that you are not a United States person, or

             *   other documentation upon which it may rely to treat the
           payments as made to a non-United States person in
       accordance with U.S. Treasury regulations, or

*   you otherwise establish an exemption.             

 Payment of the proceeds from the sale of a Security effected at a foreign
office of a broker generally will not be subject to information reporting or    
backup withholding. However, a sale of a Security that is effected at a foreign 
office of a broker will be subject to information reporting and backup          
withholding if:                                                                 

       *     the proceeds are transferred to an account maintained by you in the
United States,                                        

     *     the payment of proceeds or the confirmation of the sale is mailed
to you at a United States address, or                 

       *     the sale has some other specified connection with the United States
as provided in U.S. Treasury regulations,             

unless the broker does not have actual knowledge or reason to know that you are 
a United States person and the documentation requirements described above are   
met or you otherwise establish an exemption.                                    

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  In addition, a sale of a Security effected at a foreign office of a broker
will be subject to information reporting if the broker is:                      

*     a United States person,                                     

    *     a controlled foreign corporation for United States tax purposes,

     *     a foreign person 50% or more of whose gross income is effectively
             connected with the conduct of a United States trade or business for
a specified three-year period, or                     

*     a foreign partnership, if at any time during its tax year:  

           *   one or more of its partners are "U.S. persons", as defined in
                U.S. Treasury regulations, who in the aggregate hold more than
              50% of the income or capital interest in the partnership, or

            *   such foreign partnership is engaged in the conduct of a United
States trade or business,                     

unless the broker does not have actual knowledge or reason to know that you are 
a United States person and the documentation requirements described above are   
met or you otherwise establish an exemption. Backup withholding will apply if   
the sale is subject to information reporting and the broker has actual          
knowledge that you are a United States person.                                  

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PLAN OF DISTRIBUTION

    Rentenbank may sell Securities to or through underwriters, and also may sell
Securities directly to other purchasers or through agents. Only agents or       
underwriters named in the prospectus supplement are deemed to be agents or      
underwriters, as the case may be, in connection with the Securities offered     
thereby. Each prospectus supplement with respect to Securities will set forth   
the terms of the offering of such Securities, including the name or names of    
any underwriters or agents, the price of such Securities or the basis on which  
the price will be determined and the net proceeds to Rentenbank from such sale, 
any underwriting discounts or other items constituting underwriters'            
compensation, any discounts or concessions allowed or reallowed or paid to      
dealers and any securities exchanges on which such Securities may be listed.    

   The distribution of the Securities may be effected from time to time in one
or more transactions at a fixed price or prices, which may be changed, or at    
market prices prevailing at the time of sale, at prices related to such         
prevailing market prices or at negotiated prices.                               

In connection with the sale of Securities, underwriters may receive     
compensation from Rentenbank or from purchasers of Securities for whom they may 
act as agents in the form of discounts, concessions or commissions.             
Underwriters may sell Securities to or through dealers, and such dealers may    
receive compensation in the form of discounts, concessions or commissions from  
the underwriters and/or commissions for the purchasers for whom they may act as 
agents. Underwriters, dealers and agents that participate in the distribution   
of Securities may be deemed to be underwriters, and any discount or commission  
received by them from Rentenbank and any profit on the resale of Securities by  
them may be deemed to be underwriting discounts and commissions under the       
Securities Act of 1933, as amended (the "Act"). Any such underwriter or agent   
will be identified, and any such compensation received from Rentenbank will be  
described, in the prospectus supplement.                                        

If underwriters are used in the sale, Securities will be acquired by the
underwriters for their own account and may be resold from time to time in one   
or more transactions, including negotiated transactions, at a fixed public      
offering price or at varying prices determined at the time of sale. Securities  
may be offered to the public either through underwriting syndicates represented 
by managing underwriters or others, as designated. Unless otherwise set forth   
in the applicable prospectus supplement, the obligations of the underwriters to 
purchase Securities will be subject to certain conditions precedent and the     
underwriters will be obligated to purchase all Securities offered thereby if    
any are purchased. Any initial public offering price and any discounts or       
concessions allowed or reallowed or paid to dealers may be changed from time to 
time.                                                                           

   Securities may be sold directly by Rentenbank to one or more purchasers, or
through agents designated by Rentenbank from time to time. Any agent involved   
in the offer or sale of Securities will be named, and any commissions payable   
by Rentenbank to such agents will be set forth, in the applicable prospectus    
supplement. Unless otherwise indicated in such prospectus supplement, any such  
agent will be acting on a best efforts basis for the period of its appointment. 

Under agreements which may be entered into by Rentenbank, underwriters, 
dealers and agents who participate in the distribution of Securities may be     
entitled to indemnification by Rentenbank against certain liabilities,          
including liabilities under the Act, or to contribution with respect to         
payments which the agents or underwriters may be required to make in respect    
thereof. Agents and underwriters may engage in transactions with or perform     
services for Rentenbank in the ordinary course of business.                     

If so indicated in the prospectus supplement, Rentenbank will authorize 
underwriters or other persons acting as Rentenbank's agents to solicit offers   
by certain institutions to purchase Securities from Rentenbank pursuant to      
contracts providing for payment and delivery on a future date. Institutions     
with which such contracts may be made include commercial and savings banks,     
insurance companies, pension funds, investment companies, educational and       
charitable institutions and others, but in all cases such institutions must be  
approved by Rentenbank. The obligations of any purchaser under any such         
contract will be subject to the condition that the purchase of the Securities   
shall not at the time of delivery be prohibited under the laws of the           
jurisdiction to which such purchase is subject. The underwriters and such other 
agents will not have any responsibility in respect to the validity or           
performance of such contracts.                                                  

  Limitations on sales to United States persons of Securities sold in bearer
form, if any, will be described in the prospectus supplement relating thereto.  

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VALIDITY OF THE SECURITIES

  The validity of each series of Securities will be passed upon on behalf of
Rentenbank by the in-house legal advisors of Rentenbank. The validity of each   
series of Securities will also be passed upon by Davis Polk & Wardwell. Davis   
Polk & Wardwell may rely as to all matters of German law on the opinion of the  
in-house legal advisors of Rentenbank. The in-house legal advisors of           
Rentenbank may rely as to all matters of United States Federal and New York law 
on the opinion of Davis Polk & Wardwell. All statements in this prospectus with 
respect to the institutional liability of the Federal Republic have been passed 
upon by the in-house legal advisors of Rentenbank, and are included upon their  
authority.                                                                      

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 LIMITATIONS ON ACTIONS AGAINST THE FEDERAL REPUBLIC

The Federal Republic will not waive any immunity from jurisdiction or   
appoint an agent in the United States for service of process for any purposes;  
the Federal Republic is, however, subject to suit in competent courts in        
Germany. The United States Foreign Sovereign Immunities Act may provide an      
effective means of service and preclude granting sovereign immunity in actions  
in the United States arising out of or based on the United States federal       
securities laws. Under that Act, execution upon the property of the Federal     
Republic in the United States to enforce a judgment is limited to an execution  
upon property of the Federal Republic used for the commercial activity on which 
the claim was based. A judgment of a United States state or federal court may   
not be enforceable in a German court if based on jurisdiction based on the      
United States Foreign Sovereign Immunities Act or if based on the United States 
federal securities laws or if such enforcement would otherwise violate German   
public policy or be inconsistent with German procedural law. Under the laws of  
the Federal Republic, the property of the State is not subject to attachment or 
to seizure. See also "Responsibility of the Federal Republic for Rentenbank".   

 ENFORCEMENT OF CIVIL LIABILITIES AGAINST RENTENBANK

 We are located in Germany and the members of the Management Board and the
Advisory Board, as well as the experts and governmental officials referred to   
in this prospectus, are nonresidents of the United States, and all or a         
substantial portion of the assets of Rentenbank and of certain of such other    
persons are located outside the United States. As a result, it may be difficult 
or impossible for investors to effect service within the United States upon     
such persons, or to realize in the United States upon judgment of United States 
courts against such persons, including judgments predicated upon civil          
liabilities under the United States securities laws. There may be doubt as to   
the enforceability in the German courts in original actions of liabilities      
predicated upon such securities laws and as to the enforceability in such       
courts of judgments of United States courts including judgments imposing        
liabilities predicated upon such securities laws.                               

AUTHORIZED REPRESENTATIVE IN THE UNITED STATES

   The name and address of the authorized representative of Rentenbank and the
Federal Republic in the United States for purposes of the Securities Act is     
German American Chamber of Commerce Inc., 40 West 57th Street, 31st Floor, New  
York, NY 10019-4092.                                                            

 OFFICIAL STATEMENTS AND DOCUMENTS

   The information set forth herein relating to the Federal Republic is stated
by Dietrich Jahn in his official capacity as Ministerialdirigent in the Federal 
Ministry of Finance. The documents referred to in the information incorporated  
herein by reference relating to the Federal Republic as being the sources of    
financial or statistical data set forth therein are in all cases official       
public documents of the Federal Republic or its agencies.                       

 FURTHER INFORMATION

  A Registration Statement with respect to Rentenbank and the Securities has
been filed with the Securities and Exchange Commission, 450 5th Street, N.W.    
Washington, D.C. 20549, under the Act. Additional information concerning        
Rentenbank and the Securities is to be found in such Registration Statement and 
any pre- or post-effective amendment thereto, including the various exhibits    
thereto, which may be inspected at the office of the Securities and Exchange    
Commission.                                                                     

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 INDEX TO FINANCIAL STATEMENTS

                                                                [Download Table]
                                                                       
Preparation of Financial Statements..............................   F-2
Summary of Material Differences Between German GAAP and U.S. GAAP   F-3
Auditor's Report.................................................   F-5
Financial Statements.............................................   F-6
Notes to Financial Statements....................................  F-17
Supplementary Information........................................  F-23


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 PREPARATION OF FINANCIAL STATEMENTS

   The accounts of Rentenbank are prepared in accordance with German GAAP. See
"Notes to Financial Statements". German GAAP emphasizes the concepts of "a true 
and fair view" in the presentation of the statements to protect the interests   
of creditors. As a consequence, German GAAP permits credit institutions like    
Rentenbank to create general reserves which, in accordance with German law, are 
not disclosed. Under German GAAP applicable to Rentenbank, the presentation of  
borrowed funds in the Notes to the Financial Statements, were, up until 1997,   
based on initial maturities and divided borrowed funds into three maturity      
segments. In 1998, our balance sheet and profit and loss accounts were prepared 
for the first time in accordance with new regulations under the Bank and        
Financial Services Companies Accounting Regulations (Verordnung uber die        
Rechnungslegung der Kreditinstitute und Finanzdienstleistungsinstitute). Under  
these new regulations, borrowed funds are broken down according to remaining    
terms and in four maturity segments.                                            

Pursuant to section 7 of Rentenbank's Statutes, the annual financial    
statements of Rentenbank are to be examined by a Wirtschaftsprufer (certified   
public accountant) who is appointed by the advisory board with the consent of   
the Federal Ministry for Consumer Protection, Food and Agriculture and the      
Federal Ministry of Finance. The public accountant's long-form audit report     
(Prufungsbericht) serves as the basis for the audit of the General Accounting   
Office (Bundesrechnungshof).                                                    

 Rentenbank's external auditors are WOLLERT-ELMENDORFF DEUTSCHE INDUSTRIE-
TREUHAND GMBH Wirtschaftsprufungsgesellschaft, Dusseldorf, a member of Deloitte 
& Touche.                                                                       

    The annual audit is conducted in accordance with German GAAP. In the case of
a government-owned entity such as Rentenbank, the scope of the audit is         
extended to meet the requirements of the Budgeting and Accounting Act           
(Haushaltsgrundsatzegesetz). Such Act requires that the audit and the resulting 
report be designed in such a way that enables the advisory board, the           
supervisory authority, and the General Accounting Office to form their own      
opinion and take action as and when required. One of the specific aspects to be 
covered by the extended audit and the audit report is the proper conduct of     
Rentenbank's business by its management.                                        

   In accordance  with section  340(h) of the German  Commercial  Code (HGB)
foreign  currency  amounts were  converted and valued on the balance sheet date.
Where foreign  currency was set up to hedge interest and interest  currency swap
transactions, they are valued as a single unit.                                 

In 2001, Landwirtschaftliche Rentenbank once again drew up consolidated 
accounts with LR Beteiligungsgesellschaft mbH, Frankfurt am Main, and DSV Silo- 
und Verwaltungsgesellschaft mbH, Frankfurt am Main. In view of the fact that all
other companies affiliated to the Bank or Group are immaterial in terms of the  
Bank's net worth, financial and earnings position and in the absence of any     
sustained investment intentions, their inclusion in the consolidated financial  
statements has been waived in accordance with section 296 of the German         
Commercial Code (HGB).                                                          

The consolidated accounts were drawn up uniformly in accordance with the
accounting and valuation methods authorized for the Bank. The method used for   
capital consolidation was the book value in accordance with section 301(1)1 of  
the German Commercial Code (HGB).                                               

The date of the first inclusion of the subsidiary LR                    
Beteiligungsgesellschaft mbH ("LRB") in the consolidated accounts in 1993 was   
used for the transfer of asset values. As of December 31, 2001, LRB had total   
assets of euro 218.5 million.                                                   

The date of the first inclusion of the subsidiary DSV Silo- und         
Verwaltungsgesellschaft mbH, Frankfurt am Main ("DSV"), in the consolidated     
accounts in 1998 was also used for the transfer of asset values. As of December 
31, 2001, DSV had total assets of euro 16.0 million.                            

The consolidation of LRB and DSV has produced a total difference on the 
liability side of euro 23.8 million, which has the character of a reserve. In   
the consolidated accounts the net earnings brought forward of LRB are shown     
under "other reserves".                                                         
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 SUMMARY OF MATERIAL DIFFERENCES BETWEEN
 GERMAN GAAP AND U.S. GAAP

  The audited consolidated financial statements for the years ended December
31, 2001 and 2000 of Rentenbank have been prepared in accordance with German    
GAAP (see "Regulation and Supervision -- Audits and Financial Statements"),     
which emphasize the concept of "prudence" in the presentation of the financial  
statements in order to protect the interest of creditors in general.            
Rentenbank's consolidated financial statements included in this Offering        
Memorandum differ in certain respects from financial statements prepared in     
accordance with the accounting and financial reporting practices followed in    
the United States and have not been prepared in accordance with the accounting  
rules and regulations adopted by the Securities and Exchange Commission under   
the Securities Act of 1933.                                                     

The following is a summary of the principal features of German GAAP at  
December 31, 2001 and the date of this Offering Memorandum:                     

1. Receivables (loans) and liabilities are classified under German GAAP 
according to their original maturity or the period after which the obligor      
thereof may, or may be required to, repay in full such receivables or           
liabilities at the earliest after inception, rather than according to their     
remaining maturity as of the balance sheet date as under generally accepted     
accounting principles in the United States ("U.S. GAAP"). In contrast to U.S.   
GAAP, which divide receivables and liabilities into current assets and debt     
with a remaining maturity of up to one year and long-term assets and debt with  
a remaining maturity of one year or longer, German GAAP for credit institutions 
require that a bank divide receivables and liabilities on its balance sheet     
into short-term assets and debt that are either payable on demand, have an      
original maturity of less than four years or may be, or may be required to be,  
repaid in full in less than four years after inception and long-term assets and 
debt that have an original maturity of four years or longer and may be, or may  
be required to be, repaid in full at the earliest at or after four years after  
inception.                                                                      

2. Under German GAAP, assets are categorized as fixed assets            
(Anlagevermogen) or current assets (Umlaufvermogen). Fixed assets are assets    
deemed to be held for permanent use or investment and current assets are deemed 
not to be held for permanent use or investment. Fixed assets and current assets 
are valued differently. Current assets are valued individually based on a       
strict minimum value principle at the lower of historic cost (the original      
purchase price), book value or market value. Fixed assets are valued based upon 
a modified minimum value principle according to which the historic cost (the    
original purchase price) is only subject to an exceptional depreciation where a 
permanent impairment in value is anticipated. Once the value of an asset has    
been written down, its book value is permitted, but is not required, to be      
readjusted to the historic cost when the reasons for the write-down are no      
longer applicable. The book value of an asset, therefore, may be lower than     
both market value on the balance sheet date and historic cost.                  

    Non-investment securities (current assets) are valued individually under the
strict "minimum value principle", that is, at the lower of historic cost (the   
original purchase price), book value or market value. Once the value of a       
security has been written down, its book value is permitted, but is not         
required, to be readjusted to the historic cost when the reason for the write-  
down is no longer applicable. The book value of a security, therefore, may be   
lower than both market value on the balance sheet date and historic cost.       

Securities are defined in Section 7 of the Regulation on Accounting by  
Credit Institutions (Verordnung uber die Rechnungslegung der Kreditinstitute);  
in the balance sheet they are disclosed under "Bonds and other interest-        
bearing securities" and "Shares and other non interest-bearing securities". In  
disclosing income and expense, a distinction is made between securities held in 
trading portfolios (Handelsbestand) and those held as liquidity reserves in the 
liquidity portfolio (Liquiditatsreserve) (securities which are neither treated  
as fixed assets nor held for trading purposes). In both cases the securities    
are carried as current assets and are valued, for each type of security         
separately, at the lower of moving average values and market value at the       
balance sheet date. Expenses and income from securities held as liquidity       
reserves can be stated net of the general banking risk reserves allowed by      
Section 340(f) of the German Commercial Code (Handelsgesetzbuch).               

Equity investments (Beteiligungen) in non-affiliated and affiliated     
companies are valued at cost.                                                   

    3. German GAAP, unlike U.S. GAAP, permit credit institutions like Rentenbank
to create loss risk provisions that, in accordance with German law, are not     
disclosed. Provisions for risks are dealt with as follows under German GAAP:    

      (a)   The credit risk of the loan and securities portfolio is continuously
            assessed  with  respect  to  each  individual   exposure.   Specific
            provisions are  established in the loan portfolio and in the current
            asset securities portfolio held as liquidity reserve by writing down
the book value of each such                             

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            item  according to its assessed  risk  (Einzelwertberichtigung).  In
            addition,  a general  provision is established  for risk that is not
            individually  identifiable  but is  inherent  in the loan  portfolio
            (Pauschalwertberichtigung).   Like  specific   provisions,   general
            provisions  are deducted  from the assets  reserved  against and are
therefore not shown separately on the balance sheet.    

      (b)   Under  German  law  (Section  340(f) of the German  Commercial  Code
            (Handelsgesetzbuch)),  in order to  create a general  provision  for
            risks inherent in a bank's  business,  banks are permitted to record
            in  the  balance  sheet  certain   receivables  and   non-investment
            securities  at a lower  value than would  otherwise  be  required by
            specific valuation procedures (Vorsorge fur allgemeine Bankrisiken).
            Moreover,  with  respect  to  presentation  in the  profit  and loss
            account,  banks are permitted to offset (without disclosure) profits
            from the sale of certain  securities  (in the so-  called  liquidity
            portfolio,  see  paragraph  No.  2  above)  and the  revaluation  of
            receivables (i.e., payments received on loans previously written-off
            or  write-backs  of  risk  provisions)  against  write-downs  of the
            respective receivables and securities.  Based on the foregoing,  the
            Bank discloses the net result from movements in risk  provisions and
management of the liquidity portfolio.                  

    In addition to the aforementioned German GAAP, further details of the manner
in which Rentenbank has applied German GAAP are set out in the Notes to the     
Financial Statements.                                                           

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AUDITOR'S REPORT

The following opinion, financial statements and Notes thereto were      
originally prepared in German and have been translated by Rentenbank.           
Additionally, the figures in the financial statements have been rounded from    
the exact amounts into millions of euro.                                        

    We have audited the (original German) annual statement of accounts including
the bookkeeping of Landwirtschaftliche Rentenbank, Frankfurt am Main, as well   
as the consolidated statement of accounts prepared by the Bank, the management  
report and the consolidated management report provided for the business year    
1st January 2001 to 31st December 2001. The provision of these documents        
according to the regulations of German commercial law lies within the           
responsibility of the Board of Managing Directors of the Bank. Our task is to   
give an opinion, on the basis of the audit carried out by us, of the statement  
of accounts including the bookkeeping together with the consolidated statement  
of accounts, the management report and the consolidated management report       
provided.                                                                       

     We have  carried out our audit of the annual  statement of accounts and the
consolidated  statement of accounts according to section 317 German Commercial  
Code (HGB) in compliance  with the  principles  established  by the Institute of
Accountants  (Institut der  Wirtschaftsprufer,  IDW) for the proper  auditing of
statements of account. Accordingly, the audit must be planned and carried out so
that errors and infringements which have a material effect on the picture of the
Bank's  net worth,  financial  and  earnings  position  reflected  in the annual
statement of accounts and the  consolidated  statement of accounts,  prepared in
accordance with accepted accounting principles, and by the management report and
the consolidated management report, can be identified with sufficient certainty.
On establishing the auditing process knowledge about the business activity,  the
economic and legal area of the Bank and Group together with the  anticipation of
possible errors is taken into  consideration.  Within the framework of our audit
the effectiveness of the internal control system as well as proofs of statements
in the  accounting  procedures,  in the annual  and  consolidated  statement  of
accounts  and  in  the  management  and  consolidated  management  reports,  are
predominantly assessed on the basis of spot checks.                             

    Our audit includes an opinion of the applied balance sheet and consolidation
principles, the essential considerations of the Board of Managing Directors as  
well as an evaluation of the overall representation of the annual statement of  
accounts, the consolidated statement of accounts together with the management   
report and the consolidated management report. In our view our audit forms a    
sufficiently sound basis for our opinion.                                       

Our audit led to no objections.                                         

We are of the conviction that the annual statement of accounts and the  
consolidated annual statement of accounts in compliance with generally accepted 
accounting principles convey a true and fair view of the net worth, financial   
and earnings position of the Landwirtschaftliche Rentenbank, Frankfurt am Main, 
and the Group. The management report and the consolidated management report     
give an altogether accurate picture of the situation of the Bank and the Group  
and accurately represent the risks of future development.                       

Dusseldorf, 15 March 2002                                                       

Wollert-Elmendorff                                                              
Deutsche Industrie-Treuhand GmbH                                                
Wirtschaftsprufungsgesellschaft                                                 

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Dr. Gottgens       Dr. Braun        
Wirtschaftsprufer  Wirtschaftsprufer


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Several modifications have been made in the following translation of the
financial statements in comparison to the German originals. The figures in the  
following financial statements have been rounded from the exact amounts into    
millions of euro. In the balance sheet and also in the consolidated balance     
sheet in item 4 under Assets and item 11 under Liabilities additional subtotals 
and further break downs have been included which are not to be found in the     
German originals. The list of the members of the Advisory Board (pages 28-30)   
referred to in the following translation of the notes is different from the     
composition of the Advisory Board at the time of our initial audit.             

FINANCIAL STATEMENTS

UNCONSOLIDATED BALANCE SHEET

                                                        [Enlarge/Download Table]


                                                                                               AS OF         AS OF     
                                                                                            DECEMBER 31,  DECEMBER 31, 
                                                                                                2001          2000     
                                                                                            ------------  ------------ 

                                                                                            EURO MILLION   EURO MILLION
                                                                                            ------------  ------------ 

                                                                                                                       
Assets                                                                                                                 
1.     Cash reserve                                                                                                    
       a)    Cash in hand.................................................................           0.1           0.4 
       b)    Balances at central banks....................................................           0.0           0.0 
                                                                                            ------------  ------------ 
                                                                                                     0.1           0.4 
             including:                                                                                                
             At the Deutsche Bundesbank...................................................                             
                 euro --.-- m (2000: euro --.-- m)                                                                     
2.     Due from banks                                                                                                  
       a)    On demand....................................................................         361.5         286.8 
       b)    Other claims.................................................................      41,181.8      35,485.9 
                                                                                            ------------  ------------ 
                                                                                                41,543.3      35,772.7 
3.     Due from customers.................................................................                             
             including:                                                                                                
             Secured by mortgages on real estate                                                                       
                 euro --.-- m (2000: euro --.-- m)                                                                     
             Local government loans                                                                                    
                 euro 83.7 m (2000: euro 93.2 m)..........................................       2,537.7       2,316.4 
4.     Bonds and other fixed-interest securities                                                                       
       a)    Money market instruments                                                                                  
       aa)   From public issuers..........................................................           0.0           0.0 
       ab)   From other issuers...........................................................           0.0       1,217.0 
                                                                                            ------------  ------------ 
             including:                                                                              0.0       1,217.0 
             Eligible as collateral with the Deutsche Bundesbank                                                       
                 euro --.-- m (2000: euro 1,217 m)                                                                     
       b)    Debentures and bonds                                                                                      
       ba)   From public issuers..........................................................         658.7         715.7 
       bb)   From other issuers...........................................................      14,073.3      11,003.2 
                                                                                            ------------  ------------ 
             including:                                                                         14,732.0      11,718.9 
             Eligible as collateral with the Deutsche Bundesbank..........................                             
                 euro 10,893.5 m (2000: euro 7,594.6 m)                                                                
       c)    Own bonds....................................................................          30.5          50.7 
                                                                                            ------------  ------------ 
             Nominal value euro 30.4 m (2000: euro 50.6 m)................................      14,762.5      12,986.6 
                                                                                            ------------  ------------ 
5.     Shares and other variable-yield securities.........................................           0.2           0.2 

6.     Investment holdings                                                                                             
             Including:                                                                                                
             In banks                                                                                                  
                 euro --.-- m (2000: euro --.-- m)                                                                     
             In financial services companies                                                                           
                 euro --.-- m (2000: euro --.-- m)........................................          19.0          18.7 

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                    UNCONSOLIDATED BALANCE SHEET (CONTINUED)                                                           

                                                                                               AS OF         AS OF     
                                                                                            DECEMBER 31,  DECEMBER 31, 
                                                                                                2001          2000     
                                                                                            ------------  ------------ 

                                                                                            EURO MILLION   EURO MILLION
                                                                                            ------------  ------------ 

7.     Shares in affiliated companies                                                                                  
             including:                                                                                                
             In banks                                                                                                  
                 euro --.-- m (2000: euro --.-- m)                                                                     
             In financial service companies                                                                            
                 euro --.-- m (2000: euro --.-- m)........................................          26.6          26.6 
8.     Trust asset:                                                                                                    
             including:                                                                                                
             Loans on a trust basis                                                                                    
                 euro 192.6 m (2000: euro 198.6 m)........................................         192.6         198.6 
9.     Compensation claims on the government including bonds arising from their conversion           8.2          72.5 
10.    Tangible assets....................................................................           8.0           7.9 
11.    Other assets.......................................................................           2.1           1.5 
12.    Deferred items                                                                                                  
       a)    Relating to issuing and loan business........................................          34.5          43.2 
       b)    Others.......................................................................           1.5           1.6 
                                                                                            ------------  ------------ 
                                                                                                    36.0          44.8 
                                                                                            ------------  ------------ 
Total assets .............................................................................      59,136.3      51,446.9 
                                                                                            ============  ============ 


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                    UNCONSOLIDATED BALANCE SHEET (CONTINUED)                                                          

                                                                                              AS OF         AS OF     
                                                                                           DECEMBER 31,  DECEMBER 31, 
                                                                                               2001          2000     
                                                                                           ------------  ------------ 

                                                                                           EURO MILLION   EURO MILLION
                                                                                           ------------  ------------ 

                                                                                                                      
Liabilities                                                                                                           
1.     Liabilities to banks                                                                                           
       a)    On demand....................................................................      3,547.6         113.2 
       b)    With agreed term or period of notice.........................................     13,227.5      15,228.7 
                                                                                           ------------  ------------ 
                                                                                               16,775.1      15,341.9 
2.     Liabilities to customers                                                                                       
       Other liabilities                                                                                              
       a)    On demand....................................................................         43.2          40.8 
       b)    With agreed term or period of notice.........................................      4,571.1       4,848.2 
                                                                                           ------------  ------------ 
                                                                                                4,614.3       4,889.0 
3.     Liabilities in certificate form                                                                                
       Bonds issued ......................................................................     35,207.5      28,685.1 
4.     Trust liabilities                                                                                              
             including:                                                                                               
             Loans on a trust basis                                                                                   
                 euro 192.6 m (2000: euro 198.6 m)........................................        192.6         198.6 
5.     Other liabilities .................................................................         23.4         105.4 
6.     Edmund Rehwinkel-Foundation .......................................................          1.0           0.8 
7.     Deferred items                                                                                                 
       a)    Relating to issuing and loan business........................................          7.4           8.2 
       b)    Others.......................................................................         31.0          39.0 
                                                                                           ------------  ------------ 
                                                                                                   38.4          47.2 
8.     Provisions                                                                                                     
       a)    Provisions for pensions and similar obligations..............................         62.7          60.4 
       b)    Taxation provisions..........................................................          0.0           0.0 
       c)    Other provisions.............................................................        129.2         116.5 
                                                                                           ------------  ------------ 
                                                                                                  191.9         176.9 
9.     Subordinated liabilities ..........................................................        880.6         886.4 
10.    Fund covering general banking risks ...............................................        555.0         485.0 
11.    Capital and reserves                                                                                           
       a)    Subscribed capital...........................................................        135.0         135.0 
       b)    Capital reserve..............................................................          0.0           0.0 
       c)    Revenue reserves                                                                                         
             ca) Principal reserve as per section 2(2) of the Landwirtschaftliche                                     
                 Rentenbank Law                                                                   169.3         161.1 
                 Allocation from the surplus for the year.................................          8.5           8.2 
                                                                                           ------------  ------------ 
                                                                                                  177.8         169.3 
             cb) Guarantee reserve as per section 2(3) of the Landwirtschaftliche                                     
                 Rentenbank Law                                                                   318.2         301.8 
                 Allocation from the surplus for the year.................................         17.0          16.3 
                                                                                           ------------  ------------ 
                                                                                                  335.2         318.1 
             cc) Other reserves...........................................................          0.0           0.0 
                                                                                           ------------  ------------ 
       d)    Net profit for the year......................................................          8.5           8.2 
                                                                                           ------------  ------------ 
                                                                                                  656.5         630.6 
                                                                                           ------------  ------------ 
Total liabilities ........................................................................     59,136.3      51,446.9 
                                                                                           ============  ============ 


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              UNCONSOLIDATED BALANCE SHEET (CONTINUED)                                              

                                                                            AS OF         AS OF     
                                                                         DECEMBER 31,  DECEMBER 31, 
                                                                             2001          2000     
                                                                         ------------  ------------ 

                                                                         EURO MILLION   EURO MILLION
                                                                         ------------  ------------ 

                                                                                                    
1. Contingent liabilities                                                                           
         Liabilities resulting from guarantees and indemnity agreements          92.5          17.8 
                                                                         ------------  ------------ 
2. Other obligations                                                                                
         Irrevocable loan commitments..................................         409.7       1,346.0 


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UNCONSOLIDATED PROFIT AND LOSS ACCOUNT

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                                                 FOR THE YEAR  FOR THE YEAR 
                                                    ENDED         ENDED     
                                                 DECEMBER 31,  DECEMBER 31, 
                                                     2001          2000     
                                                 ------------  ------------ 

                                                 EURO MILLION   EURO MILLION
                                                 ------------  ------------ 
                                                                            
EXPENSES                                                                    
1.     Interest expenses.......................       2,781.8       2,503.0 
2.     Commission expenses.....................           1.3           1.4 
3.     Net expenses from financial operations..           0.0           0.0 
4.     General administrative expenses                                      
       a)    Personnel expenses                                             
             aa) Wages and salaries............          13.4          12.1 
             ab) Social security contributions                              
                 and expenses on pensions and                               
                 welfare benefits..............           8.1           6.5 
                                                 ------------  ------------ 
                                                         21.5          18.6 
                 Including:                                                 
                 Pensions                                                   
                 euro 6.3 m (2000: euro 4.8 m)                              
       b)    Other administrative expenses.....          10.6           9.0 
                                                 ------------  ------------ 
                                                         32.1          27.6 
5.     Depreciation and value adjustments on                                
       intangible and tangible assets..........           2.5           2.3 
6.     Other operating expenses................           1.6           1.3 
7.     Expenses related to particular                                       
       securities and loans                                                 
       a)    Depreciation and value adjustments                             
             on loans and particular securities                             
             as well as allocations to reserves                             
             for lending operations............          30.0          18.1 
       b)    Allocation to the fund covering                                
             general banking risks.............          70.0          63.2 
                                                 ------------  ------------ 
                                                        100.0          81.3 
8.     Depreciation and value adjustments                                   
       relating to investment holdings, shares                              
       in affiliated companies and securities                               
       treated as fixed assets.................           0.0           0.0 
9.     Extraordinary expenses..................           0.0           5.1 
10.    Tax on income and earnings..............           0.1           0.0 
11.    Other taxes unless reported under item 6           0.1           0.1 
12.    Net income for the year.................          34.0          32.7 
                                                 ------------  ------------ 
Total expenses ................................       2,953.5       2,654.8 
                                                 ------------  ------------ 
1.     Net income for the year.................          34.0          32.7 
2.     Allocation to revenue reserves                                       
       a)    to the principle reserve as per                                
             section 2(2) of the                                            
             Landwirtschaftliche Rentenbank Law.          8.5           8.2 
       b)    to the guarantee reserve as per                                
             section 2(3) of the                                            
             Landwirtschaftliche Rentenbank Law.         17.0          16.3 
       c)    to other reserves                            0.0           0.0 
                                                 ------------  ------------ 
                                                         25.5          24.5 
3.     Net profit for the year.................           8.5           8.2 


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UNCONSOLIDATED PROFIT AND LOSS ACCOUNT (CONTINUED)

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                                                     FOR THE YEAR       FOR THE YEAR   
                                                         ENDED              ENDED      
                                                   DECEMBER 31, 2001  DECEMBER 31, 2000
                                                   -----------------  -----------------

                                                      EURO MILLION        EURO MILLION 
                                                   -----------------  -----------------

                                                                                       
Income                                                                                 
1.     Interest income from                                                            
       a)    Lending and money market                                                  
             operations..........................            2,210.3            1,925.1
       b)    Fixed interest securities                                                 
             and debt register claims............              739.2              725.0
                                                   -----------------  -----------------
                                                             2,949.5            2,650.1
2.     Current income from                                                             
       a)    Shares and variable-yield securities                0.0                0.0
       b)    Investment holdings.................                1.2                1.1
       c)    Shares in affiliated companies......                0.0                0.0
                                                   -----------------  -----------------
                                                                 1.2                1.1
3.     Commission income ........................                1.1                1.2
4.     Net revenue from financial operations ....                0.0                0.0
5.     Income from write-ups on loans and                                              
       certain securities and from write-backs                                         
       of provisions for lending operations .....                0.0                0.0
6.     Income from write-ups on investment                                             
       holdings, shares in affiliated companies                                        
       and securities treated as fixed assets  ..                0.0                0.0
7.     Other operating income ...................                1.7                2.4
8.     Extraordinary income .....................                0.0                0.0
                                                   -----------------  -----------------
Total income ....................................            2,953.5            2,654.8
                                                   =================  =================


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CONSOLIDATED BALANCE SHEET

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                                                                         AS OF         AS OF     
                                                                      DECEMBER 31,  DECEMBER 31, 
                                                                          2001          2000     
                                                                      ------------  ------------ 
                                                                      EURO MILLION   EURO MILLION
                                                                      ------------  ------------ 

                                                                                                 
ASSETS                                                                                           
1.     Cash reserve ................................................                             
       a)    Cash in hand...........................................           0.1           0.4 
       b)    Balances at central banks..............................           0.0           0.0 
                                                                      ------------  ------------ 
                                                                               0.1           0.4 
             including:                                                                          
             At the Deutsche Bundesbank                                                          
             euro --.-- m (2000: euro --.-- m)                                                   
2.     Due from banks                                                                            
       a)    On demand..............................................         361.5         286.8 
       b)    Other claims...........................................      41,239.3      35,543.9 
                                                                      ------------  ------------ 
                                                                          41,600.8      35,830.7 
3.     Due from customers                                                                        
             including:                                                                          
             Secured by mortgages on real estate                                                 
             euro --.-- m (2000: euro --.-- m)                                                   
             Local government loans                                                              
             euro 83.7 m (2000: euro 93.2 m)........................       2,370.9       2,141.4 
4.     Bonds and other fixed-interest securities                                                 
       a)    Money market instruments                                                            
             aa) From public issuers................................           0.0           0.0 
             ab) From other issuers.................................           0.0       1,217.0 
                                                                      ------------  ------------ 
                 including:                                                    0.0       1,217.0 
                 Eligible as collateral with the Deutsche Bundesbank                             
                 euro --.-- m (2000: euro 1,217.0 m)                                             
       b)    Debentures and bonds                                                                
             ba) From public issuers................................         658.7         715.7 
             bb) From other issuers.................................      14,073.3      11,003.2 
                                                                      ------------  ------------ 
                                                                          14,732.0      11,718.9 
             including:                                                                          
             Eligible as collateral with the Deutsche Bundesbank                                 
             euro 10,893.5 m (2000: euro 7,594.6 m)                                              
       c)    Own bonds..............................................          30.5          50.7 
                                                                      ------------  ------------ 

             Nominal value                                                                       
             euro 30.4 m (2000: euro 50.6 m)........................      14,762.5      12,986.6 
                                                                      ------------  ------------ 

5.     Shares and other variable-yield securities ..................           2.8           7.9 
6.     Investment holdings                                                                       
             Including:                                                                          
             In banks                                                                            
             euro 148.1 m (2000: euro 148.1 m                                                    
       In financial services companies                                                           
             euro --.-- m (2000: euro --.-- m.......................         170.1         169.7 
7.     Shares in affiliated companies                                                            
             Including:                                                                          
             In banks                                                                            
             euro --.-- m (2000: euro --.-- m)                                                   
       In financial services companies                                                           
             euro --.-- m (2000: euro --.-- m)......................           2.9           2.9 

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  CONSOLIDATED BALANCE SHEET (CONTINUED)

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                                                                        AS OF         AS OF     
                                                                     DECEMBER 31,  DECEMBER 31, 
                                                                         2001          2000     
                                                                     ------------  ------------ 
                                                                     EURO MILLION   EURO MILLION
                                                                     ------------  ------------ 
                                                                                                

8.     Trust assets                                                                             
             Including:                                                                         
             Loans on a trust basis                                                             
             euro 192.6 m (2000: euro 198.6 m)......................        192.6         198.6 
9.     Compensation claims on the government                                                    
       including bonds arising from their conversion ...............          8.2          72.5 
10.    Tangible assets .............................................          8.0           7.9 
11.    Other assets ................................................          6.5          10.8 
12.    Deferred items                                                                           
       a)    Relating to issuing and loan business..................         34.5          43.2 
       b)    Others.................................................          1.6           1.6 
                                                                     ------------  ------------ 
                                                                             36.1          44.8 
                                                                     ------------  ------------ 
Total assets .......................................................     59,161.5      51,474.2 
                                                                     ============  ============ 


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CONSOLIDATED BALANCE SHEET (CONTINUED)            

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                                                                 AS OF         AS OF     
                                                              DECEMBER 31,  DECEMBER 31, 
                                                                  2001          2000     
                                                              ------------  ------------ 
                                                              EURO MILLION   EURO MILLION
                                                              ------------  ------------ 

                                                                                         
LIABILITIES                                                                              
1.     Liabilities to banks                                                              
       a)    On demand......................................       3,547.6         113.2 
       b)    With agreed term or period of notice...........      13,227.5      15,228.7 
                                                              ------------  ------------ 
                                                                  16,775.1      15,341.9 
2.     Liabilities to customers                                                          
       Other liabilities                                                                 
       a)    On demand......................................          34.4          35.7 
       b)    With agreed term or period of notice...........       4,571.1       4,848.2 
                                                              ------------  ------------ 
                                                                   4,605.5       4,883.9 
3.     Liabilities in certificate form                                                   
       Bonds issued ........................................      35,207.5      28,685.1 
4.     Trust liabilities                                                                 
       including:                                                                        
       Loans on a trust basis                                                            
             euro 192.6 m (2000: euro 198.6 m)..............         192.6         198.6 
5.     Other liabilities ...................................          23.6         105.6 
6.     Edmund Rehwinkel Foundation .........................           1.0           0.8 
7.     Deferred items                                                                    
       a)    Relating to issuing and loan business..........           7.4           8.2 
       b)    Others.........................................          31.0          39.0 
                                                              ------------  ------------ 
                                                                      38.4          47.2 
8.     Provisions                                                                        
       a)    Provisions for pensions and similar obligations          69.2          67.1 
       b)    Taxation provisions............................           0.0           0.0 
       c)    Other provisions...............................         130.4         116.0 
                                                              ------------  ------------ 
                                                                     199.6         183.1 
9.     Subordinated liabilities                                      880.6         886.4 
10.    Fund covering general banking risks .................         555.0         485.0 
11.    Capital and reserves                                                              
       a)    Subscribed capital.............................         135.0         135.0 
       b)    Capital reserve................................           0.0           0.0 
       c)    Revenue reserves                                                            
             ca) Principal reserve as per section 2(2) of                                
                 the Landwirtschaftliche Rentenbank Law ....         169.3         161.1 
                 Allocation from the surplus for the year ..           8.5           8.2 
                                                              ------------  ------------ 
                                                                     177.8         169.3 
             cb) Guarantee reserve as per section 2(3) of                                
                 the Landwirtschaftliche Rentenbank Law ....         318.2         301.8 
                 Allocation from the surplus for the year ..          17.0          16.3 
                                                              ------------  ------------ 
                                                                     335.2         318.1 
             cc) Other reserves ............................           2.3           2.2 
       d)    Differences from capital consolidation.........          23.8          23.8 
       e)    Net profit for the year........................           8.5           8.2 
                                                              ------------  ------------ 
                                                                     682.6         656.6 
                                                              ------------  ------------ 
Total liabilities ..........................................      59,161.5      51,474.2 
                                                              ============  ============ 
1.     Contingent liabilities                                                            
       Liabilities resulting from guarantees and                                         
       indemnity agreements ................................          92.5          17.8 
2.     Other obligations                                                                 
       Irrevocable loan commitments ........................         402.4       1,343.4 


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                                                         FOR THE YEAR  FOR THE YEAR 
                                                            ENDED         ENDED     
                                                         DECEMBER 31,  DECEMBER 31, 
                                                             2001          2000     
                                                         ------------  ------------ 
                                                         EURO MILLION   EURO MILLION
                                                         ------------  ------------ 

                                                                                    
EXPENSES                                                                            
1.     Interest expenses................................      2,781.5       2,502.9 
2.     Commission expenses..............................          1.4           1.4 
3.     Net expenses from financial operations...........          0.0           0.0 
4.     General administrative expenses                                              
       a)    Personnel expenses                                                     
             aa) Wages and salaries.....................         13.4          12.1 
             ab) Social security contributions and                                  
                 expenses on pensions and welfare                                   
                 benefits...............................          9.9           8.4 
                                                         ------------  ------------ 
                                                                 23.3          20.5 
             including:                                                             
             Pensions                                                               
             euro 7.2 m (2000: euro 5.9 m)                                          
       b)    Other administrative expenses..............         10.9           9.6 
                                                         ------------  ------------ 
                                                                 34.2          30.1 
5.     Depreciation and value adjustments on                                        
       intangible and tangible assets...................          2.4           2.3 
6.     Other operating expenses.........................          3.0           1.0 
7.     Expenses related to particular securities                                    
       and loans                                                                    
       a)    Depreciation and value adjustments                                     
             on loans and particular securities                                     
             as well as allocations to reserves                                     
             for lending operations.....................         27.0          18.4 
       b)    Allocation to the fund covering                                        
             general banking risks......................         70.0          63.2 
                                                         ------------  ------------ 
                                                                 97.0          81.6 
8.     Depreciation and value adjustments relating                                  
       to investment holdings, shares in affiliated                                 
       companies and securities treated as fixed assets           0.0           1.7 
9.     Extraordinary expenses...........................          0.0           5.1 
10.    Tax on income and earnings.......................          0.1           0.0 
11.    Other taxes unless reported under item 6.........          0.1           0.1 
12.    Net income for the year..........................         34.0          32.7 
                                                         ------------  ------------ 
Total expenses .........................................      2,953.7       2,658.9 
                                                         ============  ============ 


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                                                      FOR THE YEAR  FOR THE YEAR 
                                                         ENDED         ENDED     
                                                      DECEMBER 31,  DECEMBER 31, 
                                                          2001          2000     
                                                      ------------  ------------ 
                                                      EURO MILLION   EURO MILLION
                                                      ------------  ------------ 

                                                                                 
INCOME                                                                           
1.     Interest income from                                                      
       a)    Lending and money market operations....       2,202.8       1,917.5 
       b)    Fixed-interest securities and debt                                  
             register claims........................         739.2         725.0 
                                                      ------------  ------------ 
                                                           2,942.0       2,642.5 
2.     Current income from                                                       
       a)    Shares and variable-yield securities...           1.0           1.4 
       b)    Investment holdings....................           7.3           9.4 
       c)    Shares in affiliated companies.........           0.0           0.0 
                                                      ------------  ------------ 
                                                               8.3          10.8 
3.     Commission income............................           1.1           1.2 
4.     Net revenue from financial operations........           0.0           0.0 
5.     Income from write-ups on loans and certain                                
       securities and from write-backs of provisions                             
       for lending business.........................           0.0           0.0 
6.     Income from write-ups on investment holdings,                             
       shares in affiliated companies and securities                             
       treated as fixed assets......................           0.0           0.0 
7.     Other operating income.......................           2.3           4.4 
8.     Extraordinary income.........................           0.0           0.0 
                                                      ------------  ------------ 
Total income .......................................       2,953.7       2,658.9 
                                                      ============  ============ 


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 NOTES TO FINANCIAL STATEMENTS

ACCOUNTING AND VALUATION METHODS                                                

 Both the annual accounts and consolidated accounts of Landwirtschaftliche
Rentenbank have been prepared in accordance with the legal guidelines for bank  
balance sheets and the bank and financial services companies accounting         
regulations (RechKredV) from 11 December 1998.                                  

The balance sheet and profit and loss account have been adapted to the  
RechKredV and to the forms.                                                     

     The  valuation  of assets and debit items  follows the rules  contained  in
sections 252ff and 340(e) of the German Commercial Code (HGB).                  

    Securities were valued in strict accordance with the lower of cost or market
value principle.                                                                

  Off-balance sheet financial instruments, used as hedging for balance sheet
items, are treated like secured transactions (with the necessary documentation) 
for the purposes of valuation.                                                  

   Zero bonds were valued at their issue price plus pro rata interest based on
the issue yield.                                                                

Investments in subsidiaries and affiliated companies are stated at their
acquisition price less write-downs.                                             

  Fixed assets were depreciated according to their expected useful life on a
straight-line basis in accordance with commercial law.                          

   Liabilities were valued with the repayment sum or the nominal amount of the
debt. Agio and disagio were marked down pro rata temporis.                      

  Pension provisions have been valued as previously, using an assumed annual
rate of interest of 3.5%. The valuation of pension provisions has been based on 
the new legal tables drawn up in 1998 by Dr. K. Heubeck. Additional provisions  
have been included for anniversary bonuses and for early retirement in          
accordance with collective agreements.                                          

Provisions for the Bank's own special loan programmes cover the interest
subsidy for the whole contracted term in its entirety.                          

  Adequate provisions were taken for all discernible credit risks. A general
credit risk provision was also deducted from the assets concerned.              

   In accordance  with section  340(h) of the German  Commercial  Code (HGB)
foreign  currency  amounts were  converted and valued on the balance sheet date.
Where hedge  transactions  were used for foreign  currency amounts the items are
valued as single valuation units.                                               

     In 2001,  Landwirtschaftliche Rentenbank drew up consolidated accounts with
LR  Beteiligungsgesellschaft  mbH,  Frankfurt  am Main (LRB),  and DSV Silo- und
Verwaltungsgesellschaft  mbH,  Frankfurt am Main (DSV). In view of the fact that
all other  companies  affiliated to the Bank or Group are immaterial in terms of
the Bank's net worth, financial position and profitability,  their inclusion has
been waived in  accordance  with  section  296 of the German  Commercial  Code  
(HGB).                                                                          

     The  consolidated  accounts were drawn up uniformly in accordance  with the
accounting  and valuation  methods  authorised for the Bank. The method used for
capital  consolidation  was as  hitherto  the  book  value  in  accordance  with
section 301(1)1 of the German Commercial Code (HGB).                            

    The capital consolidation of LRB is based on the asset value at the time the
subsidiary has been first included in the consolidated accounts in 1993. On     
December 31, 2001 LRB reached total assets of euro 218.5 m.                     

The capital consolidation of the DSV was in principle based on the asset
value at the time this subsidiary has been first included in the consolidated   
accounts in 1998. The capital consolidation of the remaining shares of the DSV  
was based on the asset value at December 31, 2000, the ultimo of the month of   
purchase. On December 31, 2001 DSV reached total assets of euro 16 m.           

 The consolidation of LRB and DSV (without the purchase of shares in 2000)
has produced a total difference on the liability side of euro 23.8 m, which has 
the character of a reserve. The purchase of the residual shares of DSV in 2000  
has produced a total difference on the asset side of euro 42.8 thou which was   
set off against the other reserves. In the consolidated accounts the profit     
carried forward of LR Beteiligungsgesellschaft mbH and of DSV Silo- und         
Verwaltungsgesellschaft mbH is shown under other reserves.                      

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NOTES ON THE BALANCE SHEET AND CONSOLIDATED BALANCE SHEET                       

 The notes and explanations on individual items were drawn up in the order
they appear in the balance sheet. Balance sheet items show no pro rata          
interest.                                                                       

                                                        [Enlarge/Download Table]

                                                                                   BANK         BANK         GROUP        GROUP   
ASSET ITEMS IN THE BALANCE SHEET                                                   2001         2000         2001         2000    
-----------------------------------------------------------------------------   -----------  -----------  -----------  -----------
                                                                               EURO MILLION EURO MILLION EURO MILLION EURO MILLION
                                                                                -----------  -----------  -----------  -----------

                                                                                                                                  
Item 2:      Due from banks                                                                                                       
       This item includes:                                                                                                        
       Due from companies in which the Bank has investment holdings...........          ---          ---         1202          235
       Subheading b) -- other claims -- includes subordinated loans...........            3            3            3            3
       Subheading b) -- other claims -- is divided                                                                                
       according to the remaining time to maturity:                                                                               
       -- Up to three months..................................................        7,144        5,372        7,144        5,372
       -- Longer than three months up to one year.............................        9,244        7,209        9,244        7,209
       -- Longer than one year up to five years...............................       12,676       10,969       12,705       10,998
       -- Longer than five years..............................................       11,128       11,046       11,156       11,082
Item 3:      Due from customers                                                                                                   
       This item includes:                                                                                                        
       Due from affiliated companies..........................................          164          172          ---          ---
       Due from companies in which the Bank has investment holdings...........           15           16           62           16
       This item is divided according to the remaining time to                                                                    
       maturity:                                                                                                                  
       -- Up to three months..................................................        2,070        1,865        2,067        1,863
       -- Longer than three months up to one year.............................           39           21           39           21
       -- Longer than one year up to five years...............................           88          121           88          121
       -- Longer than five years..............................................          176          184           12           21
Item 4:      Bonds and other fixed-interest securities........................                                                    
       This item includes:....................................................                                                    
       The securities in this item eligible for stock exchange listing are:                                                       
       -- Listed securities...................................................       14,210       12,311       14,210       12,311
       -- Unlisted securities.................................................          430          386          430          386
       Additionally this item includes amounts which                                                                              
       will be due in the year following the balance sheet date                                                                   
       a) Money market instruments                                                                                                
       From other issuers.....................................................          ---        1,199          ---        1,199
       b) Bonds and other fixed-interest securities                                                                               
       From public issuers....................................................           31           13           31           13
       From other issuers.....................................................        1,799        1,102        1,799        1,102
       In accordance with section 10 (2b) 7 in conjunction with (4a) and (4c)                                                     
       of the German Banking Law (KWG), the Bank has proved not realised                                                          
       reserves in the amount of euro                                                                                             
       11 m (2000: euro 6 m) and for the Group euro 101 m (2000:                                                                  
       euro 96 m) as liable capital.                                                                                              
Item 5:      Shares and other variable-yield securities:                                                                          
       Securities qualifying for a stock exchange listing:....................                                                    
       -- Unlisted............................................................          ---          ---          ---            5
Item 6:      Holdings                                                                                                             
       Holdings in certificate form qualifying for a stock                                                                        
       exchange listing:                                                                                                          
       -- Listed..............................................................           18           18           18           18
Item 8:      Trust assets                                                                                                         
       This item includes:                                                                                                        
       -- Special-purpose fund................................................          102           97          102           97
       -- Due from banks......................................................           91          102           91          102
Item 10:     Tangible fixed assets                                                                                                
       The land and buildings used by the Bank were written down to a residual                                                    
       value of euro 5 m (2000: euro 2 m). The amounts shown under this heading                                                   
       (euro 3 m in 2001 and euro 3 m in 2000) are to be allocated to equipment,                                                  
       furniture and fittings                                                                                                     
Item 11:     Other assets                                                                                                         
       This item includes:                                                                                                        
       -- Due interest coupons................................................            2            1            2            1
       -- Purchase money claim................................................          ---          ---          ---            4
       -- Tax refunds.........................................................          ---          ---            3            4
       -- Divided claims......................................................          ---          ---            1            1
       Assets denominated in foreign currencies...............................        3,478        3,611        3,478        3,611


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FIXED ASSET SUMMARY -- BANK                                                     

                                                        [Enlarge/Download Table]

                                                                                    BALANCE SHEET   BALANCE SHEET              
FIXED ASSETS                      ACQUISITION                         CUMULATIVE   VALUE DECEMBER  VALUE DECEMBER  DEPRECIATION
EURO MILLION                         COSTS     ADDITIONS  DISPOSALS  DEPRECIATION     31, 2001        31, 2000         2001    
--------------------------------  -----------  ---------  ---------  ------------  --------------  --------------  ------------
                                                                                                                               
Tangible assets.................           19          2        ---            13               8               8             2
Investment holdings.............           19        ---        ---           ---              19              19           ---
Holdings in affiliated companies           27        ---        ---           ---              27              27           ---
Total...........................           65          2        ---            13              54              54             2


FIXED ASSET SUMMARY -- GROUP                                                    

                                                        [Enlarge/Download Table]

                                                                                                      BALANCE                
                                                                                    BALANCE SHEET   SHEET VALUE              
FIXED ASSETS                      ACQUISITION                         CUMULATIVE   VALUE DECEMBER  DECEMBER 31,  DEPRECIATION
EURO MILLION                         COSTS     ADDITIONS  DISPOSALS  DEPRECIATION     31, 2001         2000          2001    
--------------------------------  -----------  ---------  ---------  ------------  --------------  ------------  ------------
                                                                                                                             
Tangible assets.................           19          2        ---            13               8             8             2
Investment holdings.............          183        ---        ---            13             170           170           ---
Holdings in affiliated companies            4        ---        ---             1               3             3           ---
Total...........................          206          2        ---            27             181           181             2


We made use of the transitional ruling in accordance with Section 31 (6)
EGHGB.                                                                          

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                                                        [Enlarge/Download Table]

                                                                           BANK         BANK         GROUP        GROUP   
LIABILITY ITEMS IN THE BALANCE SHEET                                       2001         2000         2001         2000    
---------------------------------------------------------------------   -----------  -----------  -----------  -----------
                                                                       EURO MILLION EURO MILLION EURO MILLION EURO MILLION
                                                                        -----------  -----------  -----------  -----------

                                                                                                                          
Item 1:      Liabilities to banks                                                                                         
       This item includes:............................................                                                    
       Liabilities to companies in which the Bank has                                                                     
       investment holdings............................................          ---          ---          886           85
       Subheading b) -- with agreed term or period of                                                                     
       notice -- is divided according to the remaining                                                                    
       time to maturity:..............................................                                                    
       -- Up to three months..........................................        5,393        6,738        5,393        6,738
       -- Longer than three months up to one year.....................        2,128        1,965        2,128        1,965
       -- Longer than one year up to five years.......................        2,728        3,291        2,728        3,291
       -- Longer than five years......................................        2,474        2,716        2,474        2,716
       Securities worth a total value of nominal euro 10,275 m                                                            
       (2000: euro 8,748 m) have been deposited at the State                                                              
       Central Bank (LZB) for refinancing purposes. On December                                                           
       31, 2001 loans of a volume of euro 63 m (2000: euro 6 thou)                                                        
       were drawn from the European Central Bank (ECB). Within the                                                        
       framework of open-market transactions of the ECB securities                                                        
       at a volume of euro 4,385 m were credited from the LZB at the                                                      
       end of 2001 (2000: euro 5,000 m only Bank). Relating to the                                                        
       introduction of the euro as cash a total volume of euro 308                                                        
       thou was made available from the Bundesbank for transfer                                                           
       (Subfrontloading and Starter-Kits) prior to maturity. The early                                                    
       hand-out of euro-coins for household use led to liabilities to                                                     
       the Bundesbank at a volume of euro 1.6 thou at year end.........                                                   
Item 2:      Liabilities to customers                                                                                     
       This item includes:............................................                                                    
       -- Liabilities to companies in which the Bank has                                                                  
          investment holdings.........................................          ---          ---          166          153
       -- Liabilities to affiliated companies.........................           16           10          ---          ---
       Subheading b) -- with agreed term or period of notice                                                              
       -- is divided according to the remaining time to                                                                   
       maturity:......................................................                                                    
       -- Up to three months..........................................           75           52           75           52
       -- Longer than three months up to one year.....................          232          262          232          262
       -- Longer than one year up to five years.......................        2,466        2,166        2,466        2,166
       -- Longer than five years......................................        1,624        2,199        1,624        2,199
Item 3:      Liabilities in certificate form                                                                              
       This item includes:                                                                                                
       -- Liabilities in certificate form to affiliated                                                                   
       companies......................................................            1            3          ---          ---
       Additionally in this item the following amount is                                                                  
       included which will be due in the year following the                                                               
       balance sheet date.............................................        9,610        9,463        9,610        9,463
Item 4:      Trust Liabilities........................................                                                    
       This item includes:............................................                                                    
       -- Special-purpose fund........................................          102           97          102           97
       -- Liabilities to customers....................................           91          102           91          102
Item 5:      Other Liabilities........................................                                                    
       This item includes:............................................                                                    
       -- Called in participation-rights capital......................          ---           77          ---           77
       -- Payment for participation-rights capital....................          ---            6          ---            6
       -- Pro rata interest (before hedging) for subordinated                                                             
          liabilities.................................................           21           21           21           21

Item 9:      Subordinated Liabilities                                                                                     
       The net outlay after hedging for subordinated liabilities of                                                       
       euro 881 m (2000: euro 886 m) was euro 14 m (2000: euro 11 m). Four                                                
       tranches (euro 82 m) of the subordinated liabilities were issued                                                   
       as note loans and the remaining as bearer bonds with global                                                        
       certificates. The liabilities were mainly issued in foreign                                                        
       currencies, predominantly in Yen, with a small amount in Dutch                                                     
       guilders and Portuguese escudos. The rate of interest of these                                                     
       securities (before hedging) ranges between 2.02% and 8.13% p.a.                                                    
       The conditions of finance fulfill the requirements of section 10 (5a)                                              
       of the German Banking Law (KWG). Premature repayment is not                                                        
       possible. The first maturity of the individual sections is                                                         
       scheduled for 17.01.2005 and the last for 30.09.2022. A tranche                                                    
       for the amount of JPY 15bn, that is euro 99 m after hedging,                                                       
       due on the 09.06.2010 with an expenditure rate of around                                                           
       2.4% (before hedging) makes up a part of 11% of the                                                                
       total sum of subordinated liabilities. Premature repayment                                                         
       is not possible The conditions of this subordinated liability                                                      
       fulfill all the requirements of section 10 (5a) of the KWG. A                                                      
       possible conversion is excluded.                                                                                   
       Debts denominated in foreign currency..........................       17,936       15,578       17,936       15,578


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                                                        [Enlarge/Download Table]

                                                                             BANK         BANK         GROUP        GROUP   
LIABILITIES BELOW THE LINE                                                   2001         2000         2001         2000    
-----------------------------------------------------------------------   -----------  -----------  -----------  -----------
                                                                         EURO MILLION EURO MILLION EURO MILLION EURO MILLION
                                                                          -----------  -----------  -----------  -----------

                                                                                                                            
Item 1:      Contingent liabilities.....................................                                                    
       --    Deficiency guarantees......................................           12           16           12           16
       --    Bailment of security furnishments..........................           80            2           80            2
Item 2:      Other liabilities                                                                                              
       The decrease of irrevocable loan commitments predominantly is due                                                    
       to commitments in money market business with banks...............                                                    
       Computation of cover.............................................                                                    
       Liabilities for which mandatory cover must be provided are:......                                                    
       --    Bearer securities..........................................        4,724        4,219        4,724        4,219
       --    Registered securities......................................        7,499        7,427        7,499        7,427
       The following assets are allocated to cover bonds issued:........                                                    
       --    Due from banks.............................................       15,337       13,791       15,337       13,791
       --    Due from customers.........................................           44           56           44           56
       --    Of which secured by mortgages on real estate...............        2,558        1,047        2,558        1,047
       On the balance sheet date in the trustee blocked security deposit                                                    
       there were around euro 390 m of cover securities, which under                                                        
       section 18(1)2 of the Landwirtschaftliche Rentenbank Law should be                                                   
       assigned to the cover register.                                                                                      


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EXPLANATORY NOTES ON THE PROFIT AND LOSS ACCOUNT                                

INCOME                                                                          

                                                        [Enlarge/Download Table]

BREAKDOWN BY GEOGRAPHICAL MARKETS                                          BANK                        GROUP           
--------------------------------------------------------        -------------------------  ----------------------------
                                                                FEDERAL REPUBLIC  EUROPE/  FEDERAL REPUBLIC OF  EUROPE/
                                                                   OF GERMANY       OECD         GERMANY          OECD 
                                                                ----------------  -------  -------------------  -------
                                                                      (EURO MILLION)                (EURO MILLION)     
                                                                -------------------------  ----------------------------
                                                                                                                       
Interest Income.........................................  2001             1,917    1,033                1,909    1,033
                                                          2000             1,870      780                1,863      780
Current income from investment holdings.................  2001                 1      ---                    7      ---
                                                          2000                 1      ---                    9      ---
Current income from shares and variable-yield securities  2001               ---      ---                    1      ---
                                                          2000               ---      ---                    2      ---
Commission income.......................................  2001                 1      ---                    1      ---
                                                          2000                 1      ---                    1      ---
Other operating income..................................  2001                 2      ---                    2      ---
                                                          2000                 2      ---                    4      ---


                                                        [Enlarge/Download Table]

                                                                 BANK         BANK        GROUP        GROUP
                                                                 2000         1999         2000         1999
                                                          -----------  -----------  -----------  -----------
                                                         EURO MILLION EURO MILLION EURO MILLION EURO MILLION
                                                          -----------  -----------  -----------  -----------

                                                                                                            
Item 7:      Other operating income.....................                                                    
       The main components included in this item are:                                                       
       --    Rental income from the Bank's own buildings            1            1            1            1
       --    Reversal of various provisions.............          ---            1          ---            1
       --    One-off special payments...................          ---          ---          ---            1


EXPENSES                                                                        

    The items for interest expenses, commission expenses, general administration
expenses and other operating expenses include no material amounts relating to   
prior years.                                                                    

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 SUPPLEMENTARY INFORMATION

INFORMATION ON TRANSACTIONS INVOLVING A MARKET RISK                             

Forward transactions, particularly those in foreign currencies, not yet 
completed by the balance sheet date, were concluded to cover market price       
fluctuations.                                                                   

DERIVATIVE TRANSACTIONS -- VOLUMES                                              

                                                                [Download Table]

                                                          LOAN EQUIVALENT
                                           NOMINAL VALUE       AMOUNT    
                                           DECEMBER 31,     DECEMBER 31, 
                                          --------------  ---------------
                                           2001    2000         2001     
                                          ------  ------  ---------------

                                                   (EURO MILLION)        
                                          -------------------------------
                                                                         
INTEREST RATE RISKS                                                      
Interest rate swaps.....................  84,101  71,847            1,601
Forward rate agreements.................     250     ---                1
Interest rate options                                                    
--     Purchases........................     480     845              ---
--     Sales............................     563     986              ---
Caps, Floors............................     102     102                1
Other interest rate forward transactions      21      24                4
                                          ------  ------  ---------------
Interest rate risk total................  85,517  73,804            1,607
                                          ------  ------  ---------------
CURRENCY RISKS                                                           
Cross-currency swaps....................  16,559  10,740            2,812
Currency options                                                         
--     Purchases........................   1,160   1,095              ---
--     Sales............................   1,160   1,095              ---
FX-forwards.............................   2,193   4,173               44
                                          ------  ------  ---------------
Currency risk total.....................  21,072  17,103            2,856
                                          ------  ------  ---------------
STOCK AND OTHER PRICE RISKS                                              
Stock-index swaps.......................     303     343               26
Stock options:                                                           
--     Purchases........................     927   2,514               76
--     Sales............................     927   2,514              ---
                                          ------  ------  ---------------
Stock and other price risks total.......   2,157   5,371              102
                                          ======  ======  ===============


DERIVATIVE TRANSACTIONS -- BREAKDOWN BY MATURITIES                              

                                                                [Download Table]

                                                                EQUITY AND 
                               INTEREST RATE                   OTHER PRICE 
                               RISK DECEMBER   CURRENCY RISK      RISKS    
NOMINAL VALUE                       31,         DECEMBER 31,   DECEMBER 31,
----------------------------   --------------  --------------  ------------
REMAINING TIME TO MATURITY      2001    2000    2001    2000   2001   2000 
----------------------------   ------  ------  ------  ------  -----  -----
                                              (EURO MILLION)               
                               --------------------------------------------
                                                                           
--     Up to one year........  56,640  49,236   5,341   6,012    ---  3,213
--     Up to five years......  15,610  12,612  11,467   8,150  2,103  2,128
--     Longer than five years  13,267  11,956   4,265   2,942     54     30
                               ------  ------  ------  ------  -----  -----
Total .......................  85,517  73,804  21,073  17,104  2,157  5,371
                               ======  ======  ======  ======  =====  =====


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DERIVATIVE TRANSACTIONS -- BREAKDOWN OF COUNTERPARTIES(*)                       

                                                                [Download Table]

                                       LOAN EQUIVALENT
                       NOMINAL VALUE        AMOUNT    
                        DECEMBER 31,     DECEMBER 31, 
                      ---------------  ---------------
                        2001    2000         2001     
                      -------  ------  ---------------

                                (EURO MILLION)        
                      --------------------------------
                                                      
OECD banks..........   91,537  80,284            3,531
Other counterparties   12,083   8,067            1,029
                      -------  ------  ---------------

Total...............  103,620  88,351            4,560
                      =======  ======  ===============


(*) exclusively Principle I (Grundsatz I) relevant transactions                 

Commitments for pending transactions comprise currency futures, interest
rate and currency swaps, interest rate forward contracts, option transactions   
as well as interest caps.                                                       

MISCELLANEOUS                                                                   

During the 2001 financial year, the total remuneration of the Board of  
Managing Directors amounted to euro 1,544 thou (2000: euro 1,446 thou), the     
remuneration of the Advisory Board to euro 280 thou (2000: euro 259 thou) and   
the remuneration of the general managers of the consolidated companies euro 25  
thou (2000: euro 25 thou).                                                      

As at 31 December 2001, there were provisions totaling euro 3,834 thou  
(2000: euro 3,875 thou) to meet pension commitments to former members of the    
Board of Managing Directors and their surviving dependants. Current benefit     
payments amount to euro 400 thou (2000: euro 387 thou).                         

 The members of the Board borrowed loans of euro 3 thou during 2001 (2000:
euro 3 thou)                                                                    

Average number of employees for the year without members the Board of   
Managing Directors (identical for both Bank and Group):                         

                                                                [Download Table]

                             2001                 2000       
                     -------------------  -------------------
                     MALE  FEMALE  TOTAL  MALE  FEMALE  TOTAL
                     ----  ------  -----  ----  ------  -----

                                                             
Full-time employees   104      78    182    99      79    178
Part-time employees   ---      13     13   ---      11     11
                     ----  ------  -----  ----  ------  -----

Total..............   104      91    195    99      90    189
                     ====  ======  =====  ====  ======  =====


   Substantial  Shareholdings  as defined by section  285 (11) of the German
Commercial Code (HGB):                                                          

                                                        [Enlarge/Download Table]

                                                                  CAPITAL    PERCENTAGE                
                                                                 RESOURCES      SHARE      RESULTS     
                                                                EURO MILLION  OF CAPITAL  EURO MILLION 
                                                                    2000          %          2000      
                                                                -----------  ----------  -----------   

                                                                                                       
Deutsche Bauernsiedlung -- Deutsche Gesellschaft fur                                                   
  Landentwicklung (DGL) GmbH, Dusseldorf (in liquidation).....          9.7        25.1          0.0   
DSV Silo -- und Verwaltungsgesellschaft mbH, Frankfurt am Main          8.4(1)    100.0          0.1(1)
LR Beteiligungsgesellschaft mbH, Frankfurt am Main............         50.4(1)    100.0          0.1(1)
VK Muhlen AG, Hamburg.........................................         68.1        22.4          3.6   


----------                                                                      
(1) 2001                                                                        

   The listing of further  companies  according to  section  285 (11) of the
German  Commercial Code (HGB),  has been waived according to section 286 (3) 1  
of the German  Commercial Code (HGB) as they are of minor  significance  for the
net worth, financial and earnings position of the Bank.                         

    For the same reason, an equity consolidation of investment holdings has been
waived according to section 311 (2) of the German Commercial Code (HGB).        

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In addition, the Group has investments holdings participations in the 
following large incorporated enterprises, which exceed five percent of the      
voting rights, (Statement under section 304a (4) 2 of the German Commercial     
Code (HGB)):                                                                    

NFZ Norddeutsche Fleischzentrale GmbH, Hamburg.                         

     The  following  table  shows  mandates  for the legal  constitution  of the
supervisory  committees of large  incorporated  enterprises  (section  267 (3)  
German Commercial Code (HGB)) held by legal  representatives or other members of
staff, under section 340a (4) 1 German Commercial Code (HGB):                   

Karl-Ingo Bruns                                                   
VK Muhlen AG, Hamburg (Chairman of the Supervisory Board)         
       NFZ Norddeutsche Fleischzentrale GmbH, Hamburg (Member of the Supervisory
Board)                                                            
Wustenrot Bank AG, Ludwigsburg (Member of the Supervisory Board)  

Hans Jurgen Ploog                                                 
VR-Leasing AG, Eschborn (Member of the Supervisory Board)         

Uwe Zimpelmann                                                    
DZ Bank AG Deutsche Zentral-Genossenschaftsbank, Frankfurt am Main
(Member of the Supervisory Board)                                 
Lohmann & Co. AG, Rechterfeld (Chairman of the Supervisory Board) 

 The members of the Board of Managing Directors, of the Advisory Board, of
the General Meeting and the Commissioner and the Trustee for the 2001 financial 
year are to be found on pages 28-30.                                            

 General Managers of the LR Beteiligungsgesellschaft mbH and DSV Silo- und
Verwaltungsgesellschaft mbH:                                                    

Christian von Stralendorff                                        
Hans Erich Wassmuth                                               

Frankfurt am Main, March     LANDWIRTSCHAFTLICHE RENTENBANK             
2002                         The Board of Managing Directors            

                  Bruns      Ploog      Zimpelmann

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 THE FEDERAL REPUBLIC OF GERMANY

 GENERAL

AREA, LOCATION AND POPULATION                                                   

   The Federal Republic is situated in western Europe and comprises an area of
about 138,000 square miles. Its total population was in the range of 82.2       
million in 1999. Approximately 15% of the total population is concentrated in   
metropolitan areas with more than 500,000 inhabitants; the largest of these     
areas are Berlin, Hamburg, Munich, Cologne, Frankfurt am Main, Essen, Dortmund, 
Stuttgart, Dusseldorf and Bremen.                                               

(Source: Statistisches Bundesamt, Statistisches Jahrbuch 2001, Tables 3.1, 3.4  
and 3.6)                                                                        

GOVERNMENT                                                                      

   The Federal Republic is a federated republic whose constitution is codified
in the Grundgesetz of 1949. It consists of 16 Federal States (Lander). The      
capital of the Federal Republic is Berlin. The Lander have legislative          
sovereignty over matters not expressly reserved to the legislative, executive   
and judicial bodies of the Federal Republic.                                    

The Grundgesetz provides for a Federal President (Bundesprasident), two 
Houses of Parliament (the Bundestag, which currently has 666 members -- three   
of the 669 members elected in 1998 died or left the Bundestag without having    
been replaced --, and the Bundesrat, which consists of representatives of the   
16 Lander governments), a Chancellor (Bundeskanzler) and a Federal              
Constitutional Court (Bundesverfassungsgericht). The Chancellor heads the       
Federal Government, consisting of the Chancellor and the Federal Ministers. The 
Bundesprasident acts as head of state.                                          

General elections for the Bundestag are held every four years. The last 
general election was held in 1998, and the next general election will be held   
on September 22, 2002. A political party is not entitled to representation in   
the Bundestag unless it receives at least 5% of the votes cast or three direct  
mandates in a general election. The Chancellor is elected by and is responsible 
to the Bundestag and cannot be removed from office during his or her four-year  
term unless the Bundestag has agreed on a successor.                            

POLITICAL PARTIES                                                               

   The political parties currently represented in the Bundestag are the Social
Democrats (SPD), the Christian Democrats (CDU) and its Bavarian sister party,   
the Christian Social Union (CSU), the Bundnis 90/Grune, the Free Democrats      
(FDP) and the Party of Democratic Socialism (PDS).                              

    Since 1949, the Federal Republic has been governed by seven Chancellors over
14 electoral periods. From October 1982 to September 1998 a coalition of the    
CDU, CSU and the FDP governed under Chancellor Helmut Kohl. The last general    
elections in 1998 resulted in a victory for a coalition between the SPD and the 
Bundnis 90/Grune. The new Federal Government was formed in October 1998 and is  
led by Chancellor Gerhard Schroder of the SPD.                                  

The following table shows the results of the five most recent general   
elections to the Bundestag.                                                     

                                                        [Enlarge/Download Table]

                         1998          1994          1990          1987          1983    
                       ELECTIONS     ELECTIONS   ELECTIONS(1)  ELECTIONS(2)  ELECTIONS(2)
                     ------------  ------------  ------------  ------------  ------------
                      % OF          % OF          % OF          % OF          % OF       
                     VOTES  SEATS  VOTES  SEATS  VOTES  SEATS  VOTES  SEATS  VOTES  SEATS
                     -----  -----  -----  -----  -----  -----  -----  -----  -----  -----

                                                                                         
SPD................   40.9    298   36.4    252   33.5    239   37.0    186   38.2    193
CDU/CSU............   35.1    245   41.4    294   43.8    319   44.3    223   48.8    244
Bundnis 90/Grune(3)    6.7     47    7.3     49    5.0      8    8.3     42    5.6     27
FDP................    6.2     43    6.9     47   11.0     79    9.1     46    7.0     34
PDS................    5.1     36    4.4     30    2.4     17    ---    ---    ---    ---
Others.............    5.9    ---    3.6    ---    4.2    ---    1.4    ---    0.5    ---
                     -----  -----  -----  -----  -----  -----  -----  -----  -----  -----

Total..............           669           672           662           497           498
                     =====  =====  =====  =====  =====  =====  =====  =====  =====  =====

----------                                                                      
(1) In  1990, Bundnis  90 (east German  Grune) and  PDS were represented  in the
 Bundestag pursuant to special provisions in the Treaty on Unity, relating
to the political parties of the eastern Lander.                         

(2) Does  not include  22 members  of the Bundestag  from Berlin  (West) without
voting rights.                                                          

(3) For 1983  and 1987 includes only the results of the west German Grune party;
   for 1990 includes the results of the west German Grune party and of Bundnis
90 (east German Grune); for 1994 and all subsequent periods includes the
results of the combined Bundnis 90/Grune.                               

(Source: Statistisches Bundesamt, Statistisches Jahrbuch 2001, Tables 4.3 and   
4.5)                                                                            
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INTERNATIONAL ORGANIZATIONS                                                     

 The Federal Republic was a founding member of the European Coal and Steel
Community in 1951, which later developed into the European Union ("EU"). Today, 
the Federal Republic is one of 15 member states of the EU, together with        
Austria, Belgium, Denmark, Finland, France, Greece, Ireland, Italy, Luxembourg, 
the Netherlands, Portugal, Spain, Sweden and the United Kingdom (the "Member    
States"). The aggregate population of the Member States is approximately 376    
million.                                                                        

(Source: Statistisches Bundesamt, Statistisches Jahrbuch 2001 fur das Ausland,  
Table 1.3)                                                                      

In addition to the 15 Member States, several other countries, located   
principally in Eastern Europe, have applied for membership in the EU. Following 
a European Council decision of December 1997, negotiations with Cyprus, the     
Czech Republic, Estonia, Hungary, Poland and Slovenia ("Luxembourg Group")      
commenced in the spring of 1998. It is expected that the negotiations with the  
Luxembourg Group will be finalized by the end of 2002 and that the first        
countries of that group will become members of the EU in 2004. At the Helsinki  
Summit in December 1999, the European Council recommended that the Member       
States open negotiations with Romania, the Slovak Republic, Latvia, Lithuania,  
Bulgaria and Malta ("Helsinki Group") and recognize Turkey as an applicant      
country. For further information on the European integration, see "The Federal  
Republic of Germany -- The Economy -- European Integration ".                   

(Source: www.europa.eu.int/comm/enlargement/negotiations/index.htm;             
www.europa.eu.int/abc/history/index_en.htm)                                     

The Federal Republic is also a member of various major multilateral     
institutions, including the United Nations, the International Monetary Fund,    
the International Bank for Reconstruction and Development ("World Bank"), the   
Council of Europe, the Organization for Economic Cooperation and Development    
("OECD"), the West European Union ("WEU"), and the North Atlantic Treaty        
Organization ("NATO"). In addition, it is a signatory to the General Agreement  
on Tariffs and Trade ("GATT") and a member of the World Trade Organization      
("WTO"). The Federal Republic is also a shareholder of the European Investment  
Bank, the European Bank for Reconstruction and Development, and the European    
Atomic Energy Community. Further, the Federal Republic forms part of the        
European Economic and Monetary Union ("EMU"). On January 1, 1999, with the      
start of Stage Three of the EMU, the ECB assumed responsibility for the         
monetary policy in the euro area, which now consists of twelve Member States.   
These twelve Member States adopted the euro as a single currency to replace     
their national currencies. See "The Federal Republic of Germany -- Monetary and 
Financial System" for additional information on the Eurosystem and the EMU.     

STATISTICAL DISCLOSURE STANDARDS OF THE INTERNATIONAL MONETARY FUND             

    The Federal Republic currently meets the Special Data Dissemination Standard
("SDDS") of the International Monetary Fund ("IMF") relating to coverage,       
periodicity and timeliness of economic data. Although subscription by member    
countries to the SDDS is voluntary, it carries a commitment by subscribing      
members to observe the standard and to provide certain information to the IMF   
about its practices in disseminating economic and financial data.               

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 THE ECONOMY

OVERVIEW                                                                        

The Federal Republic's economic system has developed since 1945 into a  
social market economy, combining the free initiative of the individual with     
progressive social principles. The Grundgesetz guarantees freedom of private    
enterprise and private property, provided that these basic rights must not be   
exercised against the public good. The state mainly has a regulatory function   
in the market economy, setting the general framework of conditions within which 
market processes take place. State intervention in price setting is limited to  
a very small number of industries.                                              

KEY ECONOMIC FIGURES                                                            

The German economy is one of the world's largest economies. In 2001, its
gross domestic product ("GDP") expressed at current prices was EUR 2,063        
billion. At constant prices (1991 = 100), real GDP for western Germany rose     
from DM 1,000 billion in 1960 to DM 2,520 billion in 1990 (the year of the      
German reunification). At 1995 prices, GDP for all of Germany, i.e. including   
the eastern Lander, rose from DM 3,346 billion in 1991 to DM 3,872 billion (EUR 
1,980 billion) in 2001. This growth in GDP is primarily a result of substantial 
gains in productivity. At 1995 prices, real GDP per person employed was         
approximately EUR 50,976 (DM 99,700) in 2000, at which point 38.8 million       
persons were either employed or self-employed.                                  

(Source: Deutsche Bundesbank, Monthly Report April 2002, Table IX.1;            
Statistisches Bundesamt, Statistisches Jahrbuch 2001, Tables 24.1 and 24.3)     

  As in many advanced economies, the services sector of the Federal Republic
has become a more important contributor to GDP than any other sector. In 2001,  
22.9% of GDP, measured at 1995 prices, was generated by the producing sector    
(excluding construction), while construction contributed 4.8%. Distribution,    
catering trade and transportation services accounted for 18.0%, financing,      
rents and corporate services accounted for 29.8%, and other public and private  
services accounted for 19.4% of GDP. Private consumption totaled 56.6% of GDP,  
investment amounted to 20.6%, and state consumption equaled 19.5%. Exports and  
imports of goods and services accounted for 34.9% and 31.5% of GDP in 2001 at   
1995 prices, respectively. Thus, the foreign balance of trade showed a surplus  
equal to 3.4% of GDP in 2001.                                                   

(Source: Deutsche Bundesbank, Monthly Report April 2002, Table IX.1)            

In 2001, the general economic conditions deteriorated significantly. The
economic downturn that emanated from the United States slowed down the economic 
growth in virtually all industrialized countries, including the Federal         
Republic. The principal reasons for this development were the continuing impact 
of high oil prices and the European Central Bank's tighter monetary policy in   
2000, and the worldwide slump in the information and communications technology  
industry in 2001. These developments were aggravated by the terrorist attacks   
on the United States on September 11, 2001. In addition, the economy of the     
Federal Republic suffered from an increase of food prices induced by mad cow    
disease and foot and mouth disease in the EU. Moreover, an accelerated          
contraction of the German construction industry, especially in eastern Germany, 
hampered economic growth. The effects of these developments were partially      
offset by the stimulating effect of a tax reform that increased the disposable  
income of German households. As a result of the aforesaid developments, overall 
economic growth in the Federal Republic decreased considerably in 2001, as      
demonstrated by an annual average real GDP growth of 0.6%, compared to 3.0% in  
2000, each expressed at 1995 prices.                                            

(Source: Deutsche Bundesbank, Monthly Report April 2002, Table IX.1;            
Jahresbericht der Bundesregierung zur Wirtschafts- und Finanzpolitik --         
Jahreswirtschaftsbericht 2000; Statistisches Bundesamt, press release dated     
January 17, 2002                                                                

 Exports of the Federal Republic totaled EUR 689.9 billion in 2001 at 1995
prices, corresponding to an increase of 4.7% compared to 2000 (in 2000, German  
exports increased by 13.2% compared to 1999). The unemployment rate fell        
slightly from 9.6% of the civil workforce in 2000 to 9.4% in 2001 (as computed  
under the "national definition" used by the German authorities). Based on the   
method of calculation promulgated by the International Labour Organization      
(ILO) (the "ILO definition"), the unemployment rate decreased from 7.5% to      
7.4%. For an explanation of the differences between the national definition and 
the ILO definition, see "-- Employment and Labor". The rate of consumer price   
inflation increased from 1.9% in 2000 to 2.5% in 2001. This increase was mainly 
caused by an increase in world market prices for energy, which had a            
particularly adverse effect on Germany because of unfavorable exchange rates,   
and the                                                                         
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increase in food prices caused by the BSE and foot and mouth disease  crises    
in the EU. Public debt totaled EUR 1,223.3 billion at year-end 2001. The figures
provided in this paragraph are partially estimated.                             

(Source: Deutsche Bundesbank, Monthly Report April 2001, Tables VIII.7, IX.1,   
IX.6 and IX.7; Statistisches Bundesamt, Fachserie 18, Reihe 3, 4th Quarter      
2001, page 15)                                                                  

The following table shows certain key economic figures for the Federal  
Republic for the past five years.                                               

KEY ECONOMIC FIGURES

                                                        [Enlarge/Download Table]

                                                                        2001       2000     1999     1999     1998     1997  
                                                                      -------    -------  -------  -------  -------  ------- 
                                                                           (EUR IN                                           
                                                                          BILLIONS)              (DM IN BILLIONS)            
                                                                                                                             

GDP -- at current prices(1).........................................  2,063.0    2,025.5  1,974.3  3,861.4  3,773.6  3,660.5 
(change in %).......................................................      1.9        2.6      2.3      2.3      3.1      2.2 
GDP -- at 1995 prices(1)............................................  1,979.6    1,968.5  1,911.1  3,737.8  3,669.9  3,599.5 
(change in %).......................................................      0.6        3.0      1.8      1.8      2.0      1.4 
Unemployment Rate (national definition)                                                                                      
  (in %)............................................................      9.4        9.6     10.5     10.5     11.1     11.4 
Rate of Inflation (year-to-year change in consumer price index in %)      2.5        1.9      0.6      0.6      1.0      1.9 
Balance of Payments -- current account..............................      2.7      (22.6)   (17.9)   (35.0)   (10.9)    (4.7)
Debt of the Federal Republic, Lander, and municipalities............  1,223.3(2) 1,211.4  1,200.0   2347.0  2,280.2  2,215.9 


----------                                                                      
(1) Figures computed in February 2002.                                          

(2) Partly estimated.                                                           

(Source: Deutsche Bundesbank, Monthly Report April 2002, Tables VIII.7, IX.1,   
IX.6, IX.7 and X.2)                                                             

EUROPEAN INTEGRATION                                                            

    The German economy is becoming increasingly integrated with the economies of
the other Member States of the EU. Under the relevant EU legislation, an        
internal market that provides for the free movement of goods and services,      
persons and capital between the Member States was established as of January 1,  
1993.                                                                           

Economic and Monetary Integration                                               

The Federal Republic is a signatory to, and has ratified, the Treaty on 
European Union of February 1992 (also known as the "Maastricht Treaty"). The    
Maastricht Treaty was the basis for the establishment of the European Economic  
and Monetary Union ("EMU"), which led to the introduction of the euro as the    
single European currency under the monetary control of the independent European 
Central Bank ("ECB").                                                           

  The Maastricht Treaty established specific convergence criteria regarding,
among others, levels of inflation and interest rates, budget deficits and       
accumulated public debt, that Member States have to satisfy in order to         
participate in Stage Three of EMU. For example, the budget deficits of Member   
States must not exceed 3% of their respective GDPs, unless the ratio is         
declining and is close to the reference limit of 3% or the excess is            
exceptional and temporary. In addition, the Member States' overall public debt  
must not exceed 60% of their respective GDPs, unless the ratio is decreasing    
towards that reference value at a satisfactory rate.                            

To ensure continuous budgetary discipline among the Member States       
participating in Stage Three of EMU, the Member States agreed on the main       
elements of a Stability and Growth Pact (the "Pact") in 1996. The Pact was      
formally adopted by the European Council in June 1997. According to the Pact,   
the Member States must pursue the medium-term objective of achieving a balanced 
budget or even a budget surplus so as to create a margin that enables them to   
deal with cyclical fluctuations, while the general government deficit must be   
kept within the reference limit of 3% of GDP, established by the Maastricht     
Treaty. As part of the Pact, the European Council adopted regulations in July   
1997 regarding the surveillance of the Member States' budgetary positions. These
regulations, among other things, accelerated and clarified the implementation of
the procedure regarding "excessive" government deficits set forth in the        
Maastricht Treaty. Under the Pact, a Member State whose total public debt       
exceeds the reference limit of 3% of GDP                                        

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becomes subject to quasi-automatic sanctions. Only in the event of a            
severe economic downturn or an unusual event outside that Member State's        
control (e.g., a natural disaster) may the 3% limit be exceeded without         
triggering the sanction.                                                        

  The following table shows historical information on the Federal Republic's
general government deficit and debt as a percentage of GDP. Although the        
general government deficit increased in 2001 due to the economic slowdown       
affecting the German economy, which was only partially compensated by the       
effects of the tax reform initiated in 2000, it remained within the limit of    
the relevant Maastricht criterion.                                              

 MAASTRICHT CRITERIA

                                                                [Download Table]

                                        2001(1)  2000(2)  1999  1998
                                        -------  -------  ----  ----

                                                                    
General Government Deficit as % of GDP      2.7      1.3   1.6   2.2
General Government Debt as % of GDP...     59.8     60.3  61.3  60.9


----------                                                                      
(1) Provisional figures.                                                        

(2) Adjusted  for proceeds from the  UMTS auction (EUR 50.85  billion). See "The
Federal Republic of Germany -- The Economy -- Economic Policy -- 2001   
general government budget results" for more information on the UMTS     
 auction. In the accounts of the Federal Statistical Office, UMTS proceeds
are recorded under "net increase in non-produced assets". As a result,  
according to the Federal Statistical Office, government spending in 2000
  was lower and a surplus in the amount of EUR 24.0 billion, or 1.2% of GDP,
rather than a deficit, was achieved.                                    

(Source: Deutsche Bundesbank, Monthly Report April 2002, Table VIII.3)          

   At a special summit of the heads of state of the Member States in May 1998,
the European Council confirmed that eleven Member States (Austria, Belgium,     
Finland, France, Germany, Ireland, Italy, Luxembourg, the Netherlands, Portugal 
and Spain) satisfied the conditions for adopting the euro as a single currency. 
With the commencement of the Stage Three of EMU on January 1, 1999, the euro    
became the legal currency of these Member States. Effective January 1, 2001,    
the European Council adopted a decision, resulting in Greece becoming the       
twelfth member of the euro area.                                                

(Source: European Commission, press release dated May 3, 2000; document number  
IP/00/422, "The History of the European Union: 2001", www.europa.eu.int/abc/    
history/2001/2001_en.htm)                                                       

 On December 31, 1998, the European Council adopted irrevocable conversion
rates between the euro and the national currencies of the participating Member  
States. The conversion rate between the euro and the Greek Drachma was fixed on 
June 19, 2000. The official exchange rate for the Deutsche Mark was fixed at DM 
1.95583 = EUR 1. On January 1, 2002, banknotes and coins denominated in euro    
were introduced as legal currency in the 12 Member States of the European Union 
participating in Stage Three of EMU to replace the national currencies.         

  The ECB was established on June 1, 1998, as part of the European System of
Central Banks ("ESCB"). On January 1, 1999, the Governing Council of the ECB,   
consisting of 17 (now 18) members, assumed sole responsibility for monetary     
policy in the euro area. According to the Maastricht Treaty, the primary        
objective of the ECSB is to maintain price stability. The ECSB supports the     
general economic policies of the EU. See "Federal Republic of Germany --        
Monetary and Financial System" for more information on the ESCB.                

(Source: www.europa.eu.int/abc/history/1998/1998_en.htm; www.europa.eu.int/abc/ 
history/1999/1999_en.htm)                                                       

Political Integration                                                           

   In addition to forming the EMU, the Member States of the EU agreed upon the
formation of a European Political Union. For the time being, however, the       
Member States retain sovereignty in most important areas of policy. The Treaty  
of Amsterdam, signed by all 15 Member States in October 1997, extends the scope 
of the Maastricht Treaty to various aspects of foreign policy, as well as       
internal and social affairs, without affecting the provisions relating to the   
EMU.                                                                            

(Source: www.europa.eu.int/abc/history/1997/1997_en.htm)                        

Enlargement                                                                     

On March 26, 1999, the Member States agreed upon the Agenda 2000, a   
framework designed to prepare the EU for the accession of new Member States and 
to reform the EU's institutions and policies, especially the common agricultural
policy. On March 31, 1999, the Member States entered into negotiations with     
Hungary, Poland, Estonia, Slovenia, the Czech Republic and Cyprus, the          
Luxembourg Group, to set the terms of their accession to the EU. The majority of
the issues had been resolved by early 2002. Negotiations with respect to a      
limited number of issues, including agricultural policy, however, are           

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still ongoing. It is expected that these negotiations will be finalized by      
the end of 2002 so that the first countries belonging to the Luxembourg Group   
will become members of the EU in 2004. On October 13, 1999, the European        
Commission recommended that the Member States open negotiations with Romania,   
the Slovak Republic, Latvia, Lithuania, Bulgaria, and Malta. The Member States  
endorsed this recommendation at the Helsinki summit on December 10/11, 1999.    
These negotiations commenced in February 2000. In addition, they recognized     
Turkey as an applicant country. In November 2000, the European Commission       
presented an "Accession Partnership" proposal identifying certain key issues    
that Turkey must address before starting accession negotiations. One month      
later, the European Council in Nice, France, welcomed the progress that Turkey  
had made in implementing the pre-accession strategy.                            

(Source: www.europa.eu.int/comm/enlargement/negotiations/index.htm;             
www.europa.eu.int/comm/enlargement/intro/ag2000_opinions.htm;                   
www.europa.eu.int/scadplus/leg/en/lvb/e50005.htm; www.europa.eu.int/abc/        
history/1999/1999_en.htm; www.europa.eu.int/abc/history/2000/2000_en.htm)       

ECONOMIC POLICY                                                                 

   The Federal Government's foremost economic policy objectives are to promote
new employment and to continue reducing the number of people out of work. In    
addition, in light of the challenges resulting from European integration,       
globalization and the emergence of a knowledge-based economy, the Federal       
Government aims to modernize German economy and German society on every level.  
The Federal Government considers the aforesaid measures necessary also to       
improve the Federal Republic's position as a business location in the worldwide 
competition for ideas and capital, innovation and investment. To achieve its    
goals, the Federal Government has adopted several major economic policy         
initiatives, including a consolidation of the budget, a reform of the social    
security system, a further opening up of product markets and a comprehensive    
tax reform. The recent tax reform is designed to reduce the tax burden of       
businesses, families and employees, to promote economic growth and employment,  
and to strengthen the competitiveness of the German economy. See "The Federal   
Republic of Germany -- Public Finance -- Tax Structure" for further information 
on the tax reform. In addition, the Federal Government has formulated a range   
of ecologically motivated policy measures geared towards the conservation of    
energy and the protection of the environment. It also took steps to facilitate  
raising venture capital and to improve the efficiency of the German capital     
markets.                                                                        

2001 general government budget results                                          

    In 2001, the general government budget deficit amounted to EUR 56.3 billion.
According to provisional figures, the general government deficit increased from 
1.3% of GDP in 2000, adjusted for the proceeds from the UMTS license auction,   
to 2.7% of GDP in 2001. The Maastricht deficit criterion, which restricts       
general government deficits to a reference limit of 3% of GDP, was met for the  
fifth consecutive year. In August 2000, the Federal Government organized an     
auction in which it awarded six licenses for the operation of networks on the   
basis of Universal Mobile Telecommunications System ("UMTS") technology. UMTS   
is a global standard for the third generation of mobile telecommunications      
systems. The auction raised revenues of EUR 50.9 billion. Public debt decreased 
from 60.3% of GDP in 2000 to 59.8% of GDP in 2001, reflecting the application   
of the UMTS auction proceeds towards direct debt redemption. Thus, public debt  
has fallen slightly below the maximum level of 60% permitted by the Maastricht  
Treaty.                                                                         

(Source: Deutsche Bundesbank, Monthly Report April 2002, Table VIII.3.)         

2002 budget                                                                     

    In connection with the Federal budget for the 2002 fiscal year, the main aim
of the Federal Government continues to be the consolidation of the budget. Its  
goal is to regain flexibility so as to be able to deal with future challenges,  
including challenges that may arise as a result of demographic developments.    
The plan is to achieve a balanced federal budget by 2006. At the Ecofin Council 
meeting of February 12, 2002, the Federal Government confirmed its commitment   
to reaching a close to balance budget of the Federal Republic, Lander, and      
social security system in 2004. This intention was confirmed by an agreement    
between the Federal Republic and the Lander on a National Stability Pact in a   
session of the Financial Planning Council (Finanzplanungsrat) on March 21,      
2002.                                                                           

  The projected deficit for 2002 is EUR 23.7 billion, which would constitute
an increase of EUR 0.8 billion compared to the budget deficit of 2001. Budgeted 
expenditures amount to EUR 247.5 billion, an increase of 1.8% compared to 2001. 
Revenue projections amount to EUR 223.8 billion, an increase of 1.6%            

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compared to 2001. Net borrowings are budgeted at EUR 21.1 billion, whereas      
expenditures for investments are budgeted at EUR 25.0 billions.                 

(Source: Bundesministerium der Finanzen, Monatsbericht April 2002, page 125)    

Tax revenues and other federal income                                           

The Federal budget is based on projected 2002 tax revenues of EUR 199.2 
billion, which would represent an increase of EUR 5.5 billion, or 2.8%,         
compared to 2001. Other federal income included in the budget is estimated to   
amount to EUR 27.2 billion in 2002, an increase of EUR 0.6 billion compared to  
2001. This other income includes EUR 3.5 billion in profits generated by the    
Deutsche Bundesbank and EUR 11.3 billion of anticipated proceeds from           
privatizations and the repayment of loans.                                      

(Source: www.bundesfinanzministerium.de/Anlage10772/Sollbericht-2002.pdf, pages 
80, 95 and 98)                                                                  

Social security expenditures                                                    

    Projected social security expenditures are budgeted at EUR 106.0 billion, or
42.8% of total expenditures, in 2002, compared to EUR 102.0 billion in 2001.    
This figure includes EUR 72.2 billion in Federal contributions to the           
compulsory pension insurance system (gesetzliche Rentenversicherung), an        
increase of approximately EUR 3.1 billion compared to 2001.                     

(Source: www.bundesfinanzministerium.de/Anlage10772/Sollbericht-2002.pdf, pages 
81-83)                                                                          

Promotion of the economy                                                        

   The 2002 budget provides for an amount of EUR 9.0 billion, or 3.6% of total
budgeted expenditures, to promote the German economy. This amount includes EUR  
1.2 billion in regional subsidies, which mainly consist of expenditures for the 
"improvement of the regional economic structure" ("Verbesserung der regionalen  
Wirtschaftsstruktur"). An amount of EUR 3.0 billion has been budgeted for the   
promotion of the coal-mining industry. Furthermore, the Federal Government      
provides subsidies in the amount of EUR 0.8 billion to small and medium-sized   
enterprises to improve their productive performance and their ability to        
innovate. EUR 0.6 billion of this amount is earmarked for the promotion of      
research, education and science.                                                

(Source: www.bundesfinanzministerium.de/Anlage10772/Sollbericht-2002.pdf, pages 
89-90)                                                                          

Interest payments                                                               

  The Federal budget projects EUR 38.9 billion in interest payments in 2002,
an increase of 3.3% compared to the previous year.                              

(Source: www.bundesfinanzministerium.de/Anlage10772/Sollbericht-2002.pdf, page  
93)                                                                             

Privatizations                                                                  

  In 2001, the Federal Government continued its policy of privatizing state-
owned businesses. Recently privatized enterprises include Gesellschaft fur      
kommunale Altkredite und Sonderaufgaben der Wahrungsumstellung mbH, juris GmbH, 
Deutsche Investitions- und Entwicklungsgesellschaft mbH, Fraport AG and         
Frankfurter Siedlungsgesellschaft mbH. In June 2001, in connection with its     
acquisition of Voicestream/Powertel, Deutsche Telekom AG increased its share    
capital without issuing new shares to the Federal Republic. As a result of this 
transaction, the interest of the Federal Republic in Deutsche Telekom AG        
decreased to 30.9%. The Federal Republic expects to further reduce its stake in 
Deutsche Telekom AG and Deutsche Post AG as soon as market conditions permit.   
In addition, it is in the process of preparing Deutsche Bahn AG for a future    
privatization. The Federal Government expects that in 2002, proceeds from       
privatizations will amount to EUR 2.75 billion. By privatizing formerly state-  
owned businesses, the Federal Government intends to improve the competitiveness 
of the German economy, thereby fostering employment and economic growth.        

(Source: Bundesregierung, Beteiligungsbericht 2001, pages 1-5;                  
www.bundesfinanzministerium.de/Anlage10772/ Sollbericht-2002.pdf, page 98)      

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GROSS DOMESTIC PRODUCT                                                          

  The following tables show the structure of the Federal Republic's real GDP
at 1995 prices by expenditure and origin for each of the years indicated along  
with changes over the respective preceding period.                              

STRUCTURE OF GDP -- EXPENDITURE(1)

                                                        [Enlarge/Download Table]

                           2001     2000     1999   1999(2)    1998     1997   2001  2000  1999  1998 
                         -------  -------  -------  -------  -------  -------  ----  ----  ----  ---- 

                              (EUR IN                                                                 
                             BILLIONS)              (DM IN BILLIONS)                (CHANGE IN %)     

                                                                                                      
Private consumption....  1,120.9  1,108.2  1,092.4  2,136.5  2,072.2  2,036.4   1.1   1.4   3.1   1.8 
Government consumption.    385.6    379.3    374.7    732.8    721.3    712.9   1.7   1.2   1.6   1.2 
Machinery and equipment    165.5    174.3    160.4    313.7    292.5    268.0  (5.0)  8.7   7.2   9.2 
Construction...........    228.5    242.6    248.8    486.6    479.5    484.3  (5.8) (2.5)  1.5  (1.0)
Other investment.......     26.8     25.3     23.2     45.4     40.0     36.1   6.0   8.9  13.7  10.7 
Changes in stocks(3)...    (14.1)     3.1     (4.1)    (8.0)     8.0     (9.0)                        
Domestic demand........  1,913.2  1,932.7  1,895.5  3,707.3  3,613.6  3,528.7  (1.0)  2.0   2.6   2.4 
Net exports(3).........     66.4     35.8     15.6     30.5     56.4     70.8                         
Exports................    689.9    658.8    581.8  1,137.9  1,077.3  1,008.4   4.7  13.2   5.6   6.8 
Imports................    623.5    623.0    566.2  1,107.4  1,020.9    937.6   0.1  10.0   8.5   8.9 
Gross domestic product.  1,979.6  1,968.5  1,911.1  3,737.8  3,669.9  3,599.5   0.6   3.0   1.8   2.0 


----------                                                                      
(1) Figures computed in February 2002, assuming 1995 prices.                    

(2) Calculated  based  on official  figures  provided in  euro  using the  fixed
conversion rate of DM 1.95583 = EUR 1.                                  

(3) Percentage changes are not presented.                                       

(Source: Deutsche Bundesbank, Monthly Report April 2002, Table IX.1)            

STRUCTURE OF REAL GDP -- ORIGIN(1)

                                                        [Enlarge/Download Table]

                                                    2001     2000     1999   1999(5)    1998     1997   2001   2000  1999  1998 
                                                  -------  -------  -------  -------  -------  -------  ----  -----  ----  ---- 

                                                       (EUR IN                                                                  
                                                      BILLIONS)              (DM IN BILLIONS)                (CHANGE IN %)      

                                                                                                                                
Agriculture, forestry and fishing(2)............     24.5     24.1     24,3     47.6     46.0     44.8   1,7  (0.8)   3,5   2.7 
Producing sector (excluding construction).......    452.4    453.1    429.7    840.4    851.5    838.3  (0.1)   5.4  (1.3)  1.6 
Construction....................................     95.8    102.6    105.4    206.1    206.8    210.9  (6.6)  (2.7) (0.3) (2.0)
Distribution, catering trade, transportation and                                                                                
  telecommunications services...................    355.8    347.7    332.5    650.3    613.0    598.5   2.3    4.5   6.1   2.4 
Financing, rents and corporate services.........    590.7    574.2    548.6  1,073.0  1,032.5    983.7   2,9    4,7   3,9   5,0 
Public and private services(3)..................    384.7    383.2    378.3    739.9    736.6    731.0   0.4    1.3   0.4   0.8 
All economic sectors............................  1,903.9  1,884.9  1,818.8  3,557.3  3,486.4  3,407.2   1.0    3.6   2.0   2.3 
Economic sectors, adjusted(4)...................  1,799.2  1,785.7  1,726.3  3,376.3  3,319.7  3,253.9   0.8    3.4   1.7   2.0 
Gross domestic product..........................  1,979.6  1,968.5  1,911.1  3,737.8  3,669.9  3,599.5   0.6    3.0   1.8   2.0 


----------                                                                      
(1) Figures computed in February 2002, assuming 1995 prices.                    

(2) The  gross value added of the sector "Agriculture,  forestry and fishing" is
   computed by subtracting the gross value added of all other economic sectors
   from the total, using the official figures provided in Deutsche Bundesbank,
Monthly Report, April 2002, Table IX.1.                                 

(3) Includes care-at-home services.                                             

(4) Gross  value added  after deduction of  assumed bank charges,  but excluding
taxes on products (offset against subsidies on products).               

(5) Calculated  based  on official  figures  provided in  euro  using the  fixed
conversion rate of DM 1.95583 = EUR 1.                                  

(Source: Deutsche Bundesbank, Monthly Report April 2002, Table IX.1)            

SECTORS OF THE ECONOMY                                                          

Producing sector                                                                

   The producing sector of the Federal Republic grew rapidly after 1945. The
main cause for this development was the Federal Government's transition from a  
state-controlled economy to a social market economy, in which state intervention
is limited to furthering social welfare and creating favorable economic         
conditions. Following German re-unification in 1990, the industry in the eastern
Lander has undergone a                                                          

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restructuring process. Today, the German producing sector is characterized      
by a balanced mix of small, medium and large enterprises and is almost entirely 
privately owned. It is geographically concentrated in the western Lander of     
North Rhine Westphalia, Bavaria, Baden Wurttemberg, Hesse, Lower Saxony, Hamburg
and Schleswig- Holstein, and in the eastern Lander of Saxony, Thuringia and     
Saxony-Anhalt. The main segments of the producing sector are motor vehicle      
manufacturing, electrical engineering, chemicals and mechanical engineering. In 
2001, the sector's aggregate contribution to real GDP was 22.9%.                

(Source: Deutsche Bundesbank, Monthly Report April 2002, Table IX.1)            

  The following table shows the output of the producing sector in index form
using 1995 as the base year (1995 = 100) for each of the years indicated.       

 OUTPUT IN THE PRODUCING SECTOR(1)

                                                                [Download Table]

                         2001(2)   2000   1999   1998   1997
                         -------  -----  -----  -----  -----

                                                            
Producing sector, total    113.2  113.4  107.7  106.2  102.8
Industry(3)............    119.9  119.1  111.5  109.7  104.7
of which                                                    
 Intermediate goods(4)     116.1  116.9  110.7  108.7  105.5
 Capital goods(5) .....    134.3  130.9  118.0  116.2  106.8
 Consumer goods(6) ....    105.2  105.6  103.4  101.7  100.5
Energy(7)..............     98.1   99.7  100.0  100.4  101.7
Construction...........     78.9   84.9   87.9   87.1   90.1


----------                                                                      
(1) Adjusted for working-day variations.                                        

(2) Provisional figures.                                                        

(3) Manufacturing  sector, unless  assigned to  the  main grouping  energy, plus
mining and quarrying.                                                   

(4) Including mining and quarrying except energy-producing goods.               

(5) Including manufacture of motor vehicles and components.                     

(6) Including printing and service activities related to printing.              

(7) Electricity,  gas,  steam and  hot  water supply,  mining  and quarrying  of
   energy-producing materials, and especially manufacture of refined petroleum
products.                                                               

(Source: Deutsche Bundesbank, Monthly Report April 2002, Table IX.2; Monthly    
Report January 2002, Table IX.2)                                                

Services sector                                                                 

As in most other industrialized countries, the services sector, which   
comprises distribution, catering trade and transportation services, financing,  
rents and corporate services, as well as other public and private services, has 
expanded rapidly in recent years and is currently the largest contributor to    
real GDP. In 2001, the sector's aggregate contribution to real GDP was 67.2%.   
Within the services sector, financing, rents and corporate services is the      
largest segment in terms of contribution to GDP, contributing 29.8% of real GDP 
in 2001.                                                                        

(Source: Deutsche Bundesbank, Monthly Report April 2002, Table IX.1)            

EMPLOYMENT AND LABOR                                                            

From the late 1950s to the early 1970s, the Federal Republic experienced
almost full employment. Thereafter, the unemployment rate increased to 9.0% in  
1986 before declining until 1991. After 1991, following German reunification,   
the unemployment rate of the combined workforce of the western and eastern      
Lander, calculated in accordance with the national definition used by the       
German authorities, rose from 5.7%, reaching a peak of 11.4% in 1997. Under the 
ILO definition, the unemployment rate rose from 5.4% in 1991 to 9.5% in 1997.   
Since then, the rate decreased to 9.4% under the national definition or 7.4%    
under the ILO definition in 2001. A person is considered unemployed under the   
national definition used by the German authorities if he or she is registered   
as such and seeking work. The employed workforce also includes part-time        
employees working up to 15 hours a week. The ILO definition considers           
unemployed only those persons who are available and seeking work. The number of 
people who were either employed or self-employed in that year was approximately 
38.8 million.                                                                   

(Source: Deutsche Bundesbank, Monthly Report April 2002, Table IX.6;            
Statistisches Bundesamt, Fachserie 18, Reihe 3, 4th Quarter 2001, page 15)      

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  The following table shows data with respect to employment and unemployment
for each of the years indicated. In the unemployment rates shown below, persons 
are counted as employed who are involved in programs such as vocational         
training, job creation plans or early retirement, which are designed to reduce  
unemployment, particularly in the eastern Lander.                               

EMPLOYMENT AND UNEMPLOYMENT                                                     

                                                        [Enlarge/Download Table]

                                                  2001(1)   2000    1999    1998    1997 
                                                  -------  ------  ------  ------  ------
                                                                                         
Employed (in thousands).........................   38,771  38,704  38,083  37,611  37,208
Unemployed (in thousands) national definition(2)    3,852   3,889   4,099   4,279   4,384
Unemployment rate (in %) national definition(3).      9.4     9.6    10.5    11.1    11.4
Unemployed (in thousands) ILO definition(4).....    3,112   3,133   3,416   3,684   3,882
Unemployment rate (in %) ILO definition(3)......      7.4     7.5     8.2     8.9     9.5


----------                                                                      
(1) Provisional figures.                                                        

(2) Registered  unemployed persons,  available and  seeking work  (but including
persons working up to 15 hours per week).                               

(3) As a percentage of the total work force (excluding armed forces).           

(4) Unemployed persons, available and seeking work.                             

(Source: Deutsche Bundesbank, Monthly Report April 2002, Table IX.6; Monthly    
Report February 2000, Table IX.6; Statistisches Bundesamt, Fachserie 18, Reihe  
3, 4th Quarter 2001, pages 15-16)                                               

  Beginning in 1989, increasing numbers of immigrants of German descent from
eastern Europe and of Germans from the former GDR resulted in an accelerated    
growth of the workforce and contributed in part to the subsequent increase in   
the number of registered unemployed persons. As a result of the fundamental     
restructuring of the eastern German economy following reunification, a          
significant number of employees in the eastern Lander lost their jobs. In 2001, 
the unemployment rate in the eastern Lander was 17.5%, which is more than twice 
the unemployment rate of the western Lander (7.4%). Despite high unemployment,  
the Federal Republic still faces a shortage of high-skilled labor, especially   
in the IT sector. The Federal Government has tried to address this shortage     
through its Green Card initiative, which took effect on August 1, 2000, and     
which seeks to attract foreign specialists into the country by providing them   
with work permits limited to a duration of five years. In addition, a special   
law designed to attract employees with special skills is currently being        
discussed.                                                                      

(Source: Deutsche Bundesbank, Monthly Report April 2002, Table IX.6)            

  In the past, wage increases in Germany typically experienced only moderate
increases over time, partly as a consequence of high unemployment rates. The    
following table shows changes in the wage level for each of the years indicated 
by reference to 1995 figures as reflected in various economic indices.          

WAGE TRENDS 
(1995 = 100)

                                                                [Download Table]

                                    2001(1)  2000(1)  1999(1)  1998(1)  1997(1)
                                    -------  -------  -------  -------  -------
                                                                               
Wages and salaries per employee(2)    107.8    105.8    104.2    102.7    101.7
Change from previous year in %....      1.8      1.6      1.4      1.0      0.3


----------                                                                      
(1) Figures computed in February 2002                                           

(2) Work place concept.                                                         

(Source: Deutsche Bundesbank, Monthly Report April 2002, Table IX.9)            

  Approximately one-third of the German work force is organized in unions.
The German Trade Union Federation (Deutscher Gewerkschaftsbund) serves as an    
umbrella organization for eleven such unions. Each member union typically covers
employees of an entire industry sector, regardless of the precise type of work  
done by these employees (so-called "one union, one industry" principle). As a   
result, employers usually deal with only one negotiating partner on the labor   
side in each industry sector. The German trade union environment has changed    
considerably in 2001 when the five largest unions of the service sector merged  
to form ver.di (Vereinte Dienstleistungsgewerkschaft). Its approximately 3      
million members in more than 1000 professions make ver.di the largest union     
worldwide.                                                                      

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    The unions and employers of each industry sector enter into collective labor
agreements (Tarifvertrage), typically without government intervention. As a     
practical matter, the Tarifvertrage apply to all employees of a given industry  
sector, regardless of whether or not a particular employee is unionized, so     
long as that employee's employer is a member of the relevant association of     
employers, which is typically the case. In the eastern Lander, unions and       
employers have agreed on Tarifvertrage that provide for a gradual increase in   
wages and salaries with a view to adjusting them over time to the levels paid   
in the western Lander. Tarifvertrage are binding on both sides. Individual      
employment contracts may deviate from the terms of any applicable Tarifvertrag  
only if such deviations are expressly allowed by the Tarifvertrag or if they    
benefit solely the employee.                                                    

  Several German laws contain provisions that regulate labor disputes. These
laws provide for, e.g., that any strike to be approved by a vote of three       
quarters of the members of the competent trade union. As a result, there are    
relatively few strikes in the Federal Republic compared to other countries.     

SOCIAL SECURITY LEGISLATION                                                     

The comprehensive system of social security legislation and services in 
effect in the Federal Republic includes health insurance, retirement and        
disability pensions, workmen's compensation, unemployment benefits, child       
welfare programs, care for physically and mentally handicapped persons,         
allowances to orphans and to single persons with dependents, and the provision  
of general public assistance to needy persons. The majority of the German       
population is covered by mandatory retirement and public health insurance. Most 
of the hospitals and institutions caring for children and handicapped persons   
are operated by municipalities, the church and charitable institutions. In      
1995, compulsory nursing care insurance was introduced.                         

Two-thirds of the financing of the various social security programs     
mentioned above is funded through social security contributions from employers  
and employees, and one-third is funded through direct contributions by the      
Federal Republic, the Lander, municipalities and other public institutions. The 
most important part of the social security insurance system -- retirement       
pensions, health insurance and unemployment insurance -- is funded primarily    
through equal contributions by employers and employees.                         

 In 2000, the social security funds received contributions in an aggregate
amount of EUR 433.6 billion, thereby falling short of the funds' expenditures   
by EUR 0.3 billion. In 2001, social security contributions amounted to EUR      
443.5 billion, and expenditures were EUR 447.6 billion. The social security     
budget thus incurred a deficit of EUR 4.1 billion in 2001.                      

(Source: Deutsche Bundesbank, Monthly Report April 2002, Table VIII.1)          

To ensure the long-term viability of the public pension scheme, the     
Bundestag adopted the Retirement Funds Act (Altersvermogensgesetz) in May 2001. 
The goal of the act, which will take effect in four stages until 2008, is to    
encourage people to invest in private pension schemes and to promote pension    
schemes run by employers. Under the act, employees receive certain bonuses and  
tax benefits in connection with investments in private pension schemes,         
depending on, among other things, the invested amounts, the employees' income   
and the number of children they have. The goal is that ultimately the expected  
decline of public pension scheme payments will be set off by payments by        
private pension schemes.                                                        

INTERNATIONAL ECONOMIC RELATIONS                                                

  External economic relations are of major importance to the German economy.
In 2001, exports and imports of goods and services were 34.9% and 31.5% of GDP  
at 1995 prices, respectively. The Federal Republic pursues a liberal foreign    
trade policy aimed at dismantling tariffs and other barriers to trade.          

(Source: Deutsche Bundesbank, Monthly Report April 2002, Table IX.1)            

    Because the Federal Republic's economy depends on exports it is particularly
vulnerable to trade barriers, such as protective tariffs. In March 2002, the    
U.S. introduced protective tariffs on steel imports of up to 30%. This measure  
is expected to decrease German steel exports to the United States and tighten   
competition in the world steel market. The EU is trying to resolve this trade   
dispute through negotiations within the WTO.                                    

(Source: Bundesministerium fur Wirtschaft und Technologie, press release dated  
March 6, 2002; press release dated April 24, 2002)                              

BALANCE OF PAYMENTS                                                             

    The Federal Republic typically achieves a surplus as far as the trading of
goods is concerned. Traditionally, however, this surplus has been offset by     
deficits in other fields, such as in services, as well as                       

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by remissions by foreign employees to their home countries, the Federal         
Republic's net payments to the EU and various other payments. Throughout most of
the 1980s, the trade surplus more than offset these other deficits, resulting in
positive current account balances. Since 1991, increases in expenditures for    
services and in transfer payments have resulted in persistent current account   
deficits. In 1997, the current account deficit was DM 4.7 billion (EUR 2.4      
billion), the lowest level since German reunification. During the following     
years, the current account deficit has increased again reaching a peak of EUR   
22.6 billion in 2000 due to, among other things, a rise of oil prices,          
structural readjustments of the capital markets in connection with the          
introduction of the euro and increases in the services deficit owing to         
expenditures of German tourists abroad. In 2001, however, the Federal Republic  
had a current account surplus of EUR 2.7 billion, reflecting lower oil prices   
than in 2000 and a decrease in the demand for IT products.                      

(Source: Deutsche Bundesbank, Monthly Report March 2002, page 41; Balance of    
payments statistics April 2002, Table I.1)                                      

The following table shows the Federal Republic's balance of payments for
each of the years indicated.                                                    

BALANCE OF PAYMENTS (BALANCES)

                                                        [Enlarge/Download Table]

                                               2001(1)   2000(1)   1999(1)   1999(1)(6)  1998(1)   1997(1)  
                                               --------  --------  --------  ----------  --------  -------- 

                                               (EUR IN MILLIONS)               (DM IN MILLIONS)             

                                                                                                            
Current account(2)                                                                                          
Foreign trade(3) ............................    94,195    59,138    65,211     127,542   126,970   116,467 
Supplementary trade items(4) ................    (4,887)   (6,846)   (6,976)    (13,644)   (5,934)   (7,360)
Services(5) .................................   (47,382)  (44,425)  (41,460)    (81,089)  (65,301)  (58,715)
Factor Income ...............................   (12,609)   (3,325)   (8,966)    (17,536)  (13,337)   (2,376)
Current transfers ...........................   (26,665)  (27,144)  (25,701)    (50,267)  (53,304)  (52,742)
                                               --------  --------  --------  ----------  --------  -------- 

Total current account .......................     2,651   (22,602)  (17,819)    (34,992)  (10,905)   (4,727)
Capital transfers and purchases/ sales                                                                      
  of intangible non-produced assets..........      (967)    6,826      (154)       (301)    1,289        52 
Capital account                                                                                             
Total net capital (capital exports) .........   (46,084)   34,347   (26,084)    (51,016)   17,042       (76)
of which:                                                                                                   
Total net German investment abroad                                                                          
  (increase/capital exports: negative figure)  (265,061) (353,152) (347,069)   (678,808) (593,077) (387,266)
Total net foreign investment in Germany                                                                     
  (increase/capital imports: positive figure)   218,976   387,499   320,985     627,792   610,119   387,190 
Balance of unclassifiable transactions ......    38,369   (24,414)   31,593      61,791      (298)   (1,889)
Change in the Deutsche Bundesbank's net                                                                     
  external assets at transaction values                                                                     
  (increase: negative figure)................    32,677    48,230   (36,999)    (72,364)   (8,231)    8,468 


----------                                                                      
(1) Figures  are  subject to  significant uncertainty  owing to  changes in  the
method of data collection in foreign trade.                             

(2) Foreign  trade  and services  are recorded  on the  basis exports  (f.o.b.)/
imports (c.i.f.), i.e. including the freight and insurance costs of     
imports.                                                                

(3) Special  trade according to  the official foreign trade  statistics. Special
Trade consists principally of goods that are imported into the Federal  
 Republic for use, consumption, adaptation or processing, as well as goods
that are produced, manufactured, adapted or processed in the Federal    
   Republic and are exported. The reported figures are based on imports c.i.f.
   and exports f.o.b. (Source: Statistisches Bundesamt, Statistisches Jahrbuch
2001, page 278)                                                         

(4) Includes  mainly warehouse  transactions for  the  account of  residents and
deduction of goods returned.                                            

(5) Excluding  the freight  and insurance  costs included  in the  c.i.f. import
value.                                                                  

(6) Calculated  based  on official  figures  provided in  euro  using the  fixed
conversion rate of DM 1.95583 = EUR 1.                                  

(Source: Deutsche Bundesbank, Balance of payments statistics, April 2002,       
Tables I.1, and I.9)                                                            

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BALANCE OF TRADE

The following tables shows information relating to foreign trade of the 
Federal Republic for each of the years indicated:                               

FOREIGN TRADE OF GOODS

                                                                [Download Table]

                             2001     2000     1999   1999(1)    1998     1997 
                           -------  -------  -------  -------  -------  -------

                                (EUR IN                                        
                               MILLIONS)              (DM IN MILLIONS)         

                                                                               
Exports of goods (f.o.b.)  637,333  597,481  510,008  997,489  955,170  888,616
Imports of goods (c.i.f.)  543,138  538,343  444,797  869,947  828,200  772,149
Trade surplus............   94,195   59,138   65,211  127,541  126,970  116,467


----------                                                                      
(1) Calculated  based  on official  figures  provided in  euro  using the  fixed
conversion rate of DM 1.95583 = EUR 1.                                  

(Source: Deutsche Bundesbank, Balance of payments statistics, April 2002, Table 
I.1)                                                                            

   The Federal Republic's principal export goods are motor vehicles, machinery
of all kinds, and electrical engineering and chemical products.                 

The principal import goods are motor vehicles, machinery and metals. The
Federal Republic has relatively few resources of industrial raw materials. It   
therefore largely depends on imports to satisfy its demand of raw materials.    
This dependence on foreign supplies is particularly significant in the case of  
metals such as copper, bauxite, manganese, titanium, rock phosphate, tungsten   
and tin. The Federal Republic currently imports nearly two thirds of its energy 
requirements, including virtually all of its oil and a significant portion of   
its natural gas requirements as well as all enriched uranium needed for nuclear 
energy.                                                                         

COMPOSITION OF EXPORTED AND IMPORTED GOODS

                                                                [Download Table]

                                                                  2000      
                                                            ----------------
                                                            EXPORTS  IMPORTS
                                                            -------  -------

                                                            (DM IN BILLIONS)

                                                                            
Total ....................................................  1,167.3  1,064.2
 of which:                                                                  
   Coal and turf..........................................      0.4      1.9
   Petroleum and gas......................................      4.0     64.9
   Nutrition..............................................     36.3     46.3
   Textiles...............................................     22.6     25.7
   Clothing...............................................     12.8     33.4
   Paper..................................................     26.2     23.4
   Chemical products......................................    145.2     97.0
   Iron and steel, non-ferrous metals.....................     57.3     54.9
   Machinery..............................................    165.3     70.9
   Office machines and automatic data processing equipment     34.4     58.9
   Electrical machinery...................................     58.2     45.2
   Special mechanical and optical goods...................     44.3     29.8
   Motor vehicles and components..........................    204.6     92.6


(Source: Statistisches Bundesamt, Statistisches Jahrbuch 2001, Tables 12.6 and  
12.7)                                                                           

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FOREIGN TRADE (SPECIAL TRADE) BY GROUP OF COUNTRIES AND COUNTRY(1)              

                                                                [Download Table]

                               2001     2000     1999 
                             -------  -------  -------

                                 (EUR IN BILLIONS)    
                                                      
Exports to:                                           
Total......................  637,333  597,481  510,008
 France....................   70,672   67,418   58,578
 Central and Eastern Europe   69,934   59,908   49,020
 United States.............   67,307   61,765   51,425
 United Kingdom............   53,271   49,377   43,124
 Italy.....................   47,516   45,012   38,335
 The Netherlands...........   39,297   38,994   34,355
 Belgium/Luxembourg........   34,173   32,730   28,821
 Austria...................   32,644   32,437   28,295
 Switzerland...............   27,611   25,596   22,808
 Spain.....................   28,388   26,733   22,684
 Southeast Asia(2).........   24,527   24,031   18,775
 Sweden....................   12,932   13,525   11,657
 OPEC Countries............   13,687   10,758    9,135
 Japan.....................   13,073   13,196   10,367
 China(3)..................   12,064    9,459    6,949

Imports from:                                         
Total......................  543,138  538,343  444,797
 France....................   51,671   50,863   45,559
 Central and Eastern Europe   68,420   62,784   47,723
 United States.............   45,454   47,124   36,790
 The Netherlands...........   46,280   44,740   36,089
 Italy.....................   35,677   35,778   33,107
 United Kingdom............   38,204   36,925   30,757
 Belgium/Luxembourg........   30,279   26,230   22,880
 Southeast Asia(2).........   27,784   30,502   22,586
 Japan.....................   22,599   26,848   21,779
 Switzerland...............   19,793   18,798   17,070
 Austria...................   20,755   20,498   18,288
 Spain.....................   15,618   16,088   14,666
 China(3)..................   19,740   18,555   13,795
 Sweden....................    9,116   10,202    8,305
 OPEC countries............    8,219   10,244    6,425


----------                                                                      
(1) Exports  f.o.b.  by country  of destination,  imports c.i.f.  by country  of
 origin. Special trade consists mainly of goods that are imported into the
   Federal Republic for use, consumption, adaptation or processing, as well as
  goods that are produced, manufactured, adapted or processed in the Federal
 Republic and subsequently are exported. (Source: Statistisches Bundesamt,
Statistisches Jahrbuch 2001, page 278)                                  

(2) Includes  Brunei, Hong  Kong, Indonesia,  Malaysia,  Philippines, Singapore,
South Korea, Taiwan, Thailand.                                          

(3) Does not include Hong Kong.                                                 

(Source: Deutsche Bundesbank, Monthly Report April 2002, Table X.3)             

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 MONETARY AND FINANCIAL SYSTEM

DEUTSCHE BUNDESBANK                                                             

 The Deutsche Bundesbank was established as the Federal Republic's central
bank and bank of issue in August 1957. The Deutsche Bundesbank has its          
headquarters in Frankfurt am Main.                                              

    Effective January 1, 1999, the European Central Bank ("ECB") has assumed the
task of pursuing a single monetary policy within EMU in cooperation with the    
national central banks of the Member States that have adopted the euro as their 
legal currency.                                                                 

THE EUROPEAN SYSTEM OF CENTRAL BANKS ("ESCB")                                   

    The ESCB consists of the ECB and the national central banks of the 15 Member
States of the EU. The Eurosystem consists of the ECB and the national central   
banks of the twelve Member States currently participating in Stage Three of     
EMU. The Eurosystem is responsible for the single monetary policy for the euro  
area. The national central banks of the Member States not participating in      
Stage Three have no vote in the decisions of the Eurosystem. The ECSB is        
governed by three decision-making bodies:                                       

      *     The Governing Council of the ECB, which consists of the members of
             the Executive Board and the governors of the national central banks
     of those Member States participating in Stage Three of EMU;

     *     The Executive Board of the ECB, which comprises the President and
          the Vice-President of the ECB, as well as four other members who
            are appointed by the heads-of-state or governments of those Member
States participating in Stage Three; and              

      *     The General Council, which consists of the President and the Vice-
           President of the ECB and the governors of all 15 national central
banks of the Member States of the EU.                 

OBJECTIVES AND TASKS OF THE ESCB                                                

The ESCB's primary objective is to maintain price stability. The ESCB   
supports the general economic policies of the European Community. In pursuing   
its goals, the ESCB must act in accordance with principles of an open market    
economy, in which the allocation of resources is determined by free             
competition.                                                                    

The basic tasks of the ESCB include:                                    

*     Defining and implementing the monetary policy of the EU;    

*     Conducting foreign exchange operations;                     

      *     Holding and managing the official foreign exchange reserves of the
participating Member States;                          

*     Monitoring payment systems; and                             

 *     Supporting policies pursued by competent national authorities
    relating to the supervision of credit institutions and the
stability of the financial system.                    

(Source: European Central Bank, Annual Report 1999, pages 135-138;              
www.ecb.int/about/statesch.htm -- Protocol no.18)                               

BACKGROUND OF THE ESCB                                                          

In June 1988, the European Council confirmed its objective of gradually 
creating an economic union. For this purpose, it mandated a committee chaired   
by Jacques Delors, then-President of the European Commission, to study and      
propose concrete steps leading to this union. In his report, Mr. Delors         
recommended that economic union be attained in three steps. In accordance with  
Mr. Delors' recommendations, Stage One of EMU began on July 1, 1990, when all   
restrictions on the movement of capital between Member States were in principle 
abolished. In order to realize Stages Two and Three of EMU, it was necessary to 
revise the Treaty establishing the European Economic Community so as to create  
an appropriate institutional framework. For this purpose, an Intergovernmental  
Conference on EMU was convened that resulted in the conclusion of the           
Maastricht Treaty, which entered into force on November 1, 1993.                

     The formation of the European Monetary Institute ("EMI") on January 1, 1994
marked the start of Stage Two of EMU. The main tasks of the EMI were to         
strengthen the cooperation among the central banks of the Member States, to     
coordinate the Member States' monetary policies and to pave the way for Stage   
Three of EMU, which included the creation of the ESCB, a single monetary policy 
and a single                                                                    
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currency. The EMI had no responsibility, however, to conduct the EU's           
monetary policy, which remained within the responsibility of the Member States, 
nor did it have any authority to carry out foreign exchange interventions.      

In December 1995, the European Council confirmed that Stage Three of EMU
would start on January 1, 1999 and agreed on "euro" as the name of the single   
currency unit that would replace the national currencies of the participating   
Member States. In May 1998, the Council of the EU unanimously decided that      
eleven Member States (Austria, Belgium, Finland, France, Germany, Ireland,      
Italy, Luxembourg, the Netherlands, Portugal and Spain) had satisfied the       
conditions for participating in Stage Three of EMU, and the governments of      
these Member States appointed the President, the Vice-President and the four    
other members of the Executive Board of the ECB. The appointment of these       
officials took effect in June 1998 and marked the establishment of the ECB.     

  Stage Three of EMU commenced on January 1, 1999, when irrevocable exchange
rates were fixed for the national currencies of the eleven Member States        
participating in the final stage of EMU, and the ECB became responsible to      
conduct a single monetary policy for the euro area. On January 1, 2000, Greece  
entered Stage Three of EMU, thereby increasing the number of participating      
Member States to twelve.                                                        

On January 1, 2002, the euro banknotes and coins were successfully      
introduced in the twelve Member States participating in Stage Three of EMU,     
including the Federal Republic. The Deutsche Mark lost its status as legal      
tender on December 31, 2001, although many shops accepted both euro and the     
Deutsche Mark until February 28, 2002. In addition, people are entitled to      
exchange any remaining Deutsche Mark banknotes and coins for euro banknotes and 
coins at the central banks of the Lander for an unlimited period of time        
thereafter.                                                                     

(Source: www.ecb.int/about/emu.htm; European Central Bank, press release dated  
January 2, 2002)                                                                

MONETARY POLICY INSTRUMENTS OF THE ESCB                                         

   To achieve its operational goals, the ESCB conducts open market operations,
offers standing facilities and requires credit institutions to maintain minimum 
reserves in accounts with the ESCB.                                             

Open market operations, which may be executed as standard tenders, quick
tenders or bilateral procedures, play an important role in the ESCB's monetary  
policy because they steer interest rates, manage the liquidity situation in the 
market and signal the ESCB's stance on monetary policy. The initiation of open  
market operations and the decision on the instruments to be used for executing  
them as well as their terms and conditions fall within the responsibility of    
the ECB. Five instruments are available for open market operations:             

 *     Reverse transactions (which apply to repurchase agreements or
collateralized loans);                                

*     Outright transactions;                                      

*     The issuance of debt certificates;                          

*     The issuance of foreign exchange swaps; and                 

*     The collection of fixed-term deposits.                      

Standing facilities, which are designed to provide or absorb overnight  
liquidity, as the case may be, signal the ESCB's stance on monetary policy and  
bind overnight market interest rates.                                           

   The imposition of minimum reserve requirements allows the ESCB to stabilize
money market interest rates, create (or enlarge) a structural liquidity         
shortage and possibly contribute to the control of monetary expansion. The      
reserve requirements applicable to individual institutions are determined in    
relation to certain elements of their respective balance sheets.                

(Source: European Central Bank, Annual Report 1999, pages 48-54; www.ecb.int/   
about/monetarypolicy.htm)                                                       

MONEY SUPPLY AND PRICES                                                         

  The ECB's primary goal is to maintain medium-term price stability, defined
as a year-on-year increase in the Harmonized Index of Consumer Prices for the   
euro area of less than 2%. The stability-oriented monetary policy strategy of   
the Eurosystem used by the ECB to achieve this goal is based on two pillars: (i)
a reference value for the euro area money supply M3, and (ii) a broadly based   
assessment of the outlook for price developments. The euro area money supply M3 
is broadly defined as the sum total of currency in circulation, overnight       
deposits, deposits with an agreed maturity of up to two years, deposits         
redeemable at up to three months' notice, repurchase agreements, money market   
fund shares/units and money market papers, and debt securities with a term of up
to two years. Holdings by non-residents of the euro area of money market fund   
shares/units, money market papers and debt securities with a term of up to      

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two years are excluded from M3 and its components. The Governing Council        
set the reference value for M3 at 4.5% growth per annum. In January 2002, the   
(provisional) annual growth rate of euro area M3 was 7.9%. The recent pick-up in
the rate of growth of M3 can be explained partly as an adjustment of M3         
following a sharp increase in the overall price level, induced by increases in  
oil and food prices in the euro area and partly as a consequence of the effects 
of portfolio shifts. Taking into account the continuing decline of private      
sector borrowing, the ECB does not see any risks to price stability in the      
medium term.                                                                    

(Source: European Central Bank, Monthly Bulletin, January 1999, pages 45-50,    
Monthly Bulletin, March 2002, Table 2.4; press release "Review of the           
Quantitative Reference Value for Monetary Growth", December 2001)               

    The following table shows price trends in Germany for the periods indicated.

PRICE TRENDS

                                                        [Enlarge/Download Table]

                                                                             2001  2000  1999  1998  1997
                                                                             ----  ----  ----  ----  ----
                                                                              (CHANGE FROM PREVIOUS YEAR 
                                                                                         IN %)           
                                                                                                         
                                                                             ----------------------------
Harmonized Consumer Price Index............................................   2.4   2.0   0.7   0.6   1.5
Consumer price index for all households....................................   2.5   1.9   0.6   1.0   1.9
Index of producer prices of industrial products sold on the domestic market   3.0   3.4  (1.0) (0.4)  1.1


(Source: Deutsche Bundesbank, Monthly Report April 2002, Table IX.7; Monthly    
Report March 2001, Table IX.7; www.destatis.de/indicators/d/vpi020vj.htm)       

   The following tables show the principal indicators relating to money supply
for each of the years indicated.                                                

MAIN MONETARY INDICATORS

                                                                [Download Table]

                                             AT DECEMBER 31,(1)                 
                            ----------------------------------------------------
                            2001(4)    2000     1999   1999(3)    1998     1997 
                            -------  -------  -------  -------  -------  -------
                                 (EUR IN      (DM IN BILLIONS;  (DM IN BILLIONS;
                                BILLIONS;        EURO AREA)         GERMANY)    
                               EURO AREA)                                       
                            ----------------  ----------------  ----------------
                                                                                
Currency in circulation(2)    239.5    347.6    349.9    684.3    242.6    247.0
Money Stock M1............  2,203.3  2,076.4  1,964.0  3,841.3  1,042.1    938.0
Money Stock M2............  4,665.6  4,289.3  4,132.8  8,083.1  1,454.3  1,330.9
Money Stock M3............  5,422.5  4,899.1  4,791.0  9,370.4  2,425.7  2,259.7

                                  (ANNUAL CHANGE IN %, DECEMBER COMPARISON;     
                               1997/1998: AVERAGE ANNUAL CHANGE IN %, BASED ON  
                                            MONTHLY AVERAGES)(5)                
                            ----------------------------------------------------
Money Stock M1............      4.9      5.7     10.1      6.3      8.5         
Money Stock M2............      6.0      3.7      5.3      4.2      3.2         
Money Stock M3............      7.7      4.2      6.2      4.3      6.2         


----------                                                                      
(1) 1997-1998:  M1 means  currency in  circulation and  sight deposits  held by 
domestic non-banks at domestic banks.           

        M2 means M1 plus time deposits for less than four years.

       M3 means M2 plus saving  deposits at statutory  notice.
1999-2001 M1 means                              
          currency in  circulation,  overnight  deposits  (excluding
     central  governments deposits), and (for EMU) central
               governments monetary liabilities, which are not included in the
               consolidated  balance  sheet.  M2 means M1 plus  deposits  with
           agreed  maturities  of up to 2 years and at agreed of up to
   3 months  (excluding central governments deposits).
     M3 means M2 plus repo transactions, money market fund
           certificates, money market papers and debt securities up to
2 years.                                        

              M3 and its components exclude holdings by non-residents of the
               euro area of money market fund shares/units, money market paper
and debt securities up to 2 years.              

(2) Excluding credit  institutions' cash in hand, including notes and coins held
abroad.                                                                 

(3) Calculated  based  on official  figures  provided in  euro  using the  fixed
calculation rate of DM 1.95583 = EUR 1.                                 

(4) Euro area enlargement in 2001.                                              

(5) Annual  changes of euro area  M3 are calculated from  monthly differences in
levels adjusted for reclassification, other revaluations, exchange rate 
variations and any other changes which do not arise from transactions.  

(Source: European Central Bank, Monthly Bulletin, March 2002, Tables 2.4.1,     
2.4.2; Monthly Bulletin April 2001, Tables 2.4.1, 2.4.2; Deutsche Bundesbank,   
Monthly Report February 1999, Tables I.1 and II.2)                              

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OFFICIAL FOREIGN EXCHANGE RESERVES                                              

  The following table shows the breakdown of the Federal Republic's official
foreign exchange reserves as of the end of the years indicated.                 

OFFICIAL FOREIGN EXCHANGE RESERVES OF THE FEDERAL REPUBLIC

                                                        [Enlarge/Download Table]

                                                                AS OF DECEMBER 31,                 
                                              -----------------------------------------------------
                                               2001    2000   1999(1)  1999(1)(2)    1998     1997 
                                              ------  ------  -------  ----------  -------  -------
                                                  (EUR IN                                          
                                                 MILLIONS)               (DM IN MILLIONS)          
                                              --------------           -------------------         
                                                                                                   
Gold........................................  35,005  32,676   32,287      63,148   17,109   13,688
Foreign Currency Balances...................  49,489  53,377   52,420     102,525  100,363   76,673
International Monetary Fund                                                                        
 Reserve Position and Special Drawing Rights   8,721   7,762    8,332      16,296   16,533   13,874
Claims on the European Central Bank (net)...     ---     ---      ---         ---      ---   22,649
                                              ------  ------  -------  ----------  -------  -------
Total                                         93,215  93,815   93,039     181,968  134,005  126,884
                                              ======  ======  =======  ==========  =======  =======


----------                                                                      
(1) External  position  of  the Deutsche  Bundesbank  in  the European  Monetary
 Union. Assets and liabilities vis-a-vis all EMU member countries and non-
EMU member countries.                                                   

(2) Calculated  based  on official  figures  provided in  euro  using the  fixed
conversion rate of DM 1.95583 = EUR 1.                                  

(Source: Deutsche Bundesbank, Monthly Report April 2002, Table X.8. and X.9)    

   The Federal Republic's foreign reserve assets are currently managed by both
the ECB and the Deutsche Bundesbank. Following the commencement of Stage Three  
of EMU on January 1, 1999, the eleven originally participating Member States    
transferred foreign reserve assets in an aggregate amount equivalent to         
approximately EUR 39.5 billion to the ECB, 85% of which consisted of foreign    
currency reserves and 15% of which consisted of gold. Like the national central 
banks of other countries that so far have not entered Stage Three of EMU, the   
Bank of Greece originally paid up only EUR 102.8 million, or 5%, of the share   
of the ECB's capital that it had subscribed for. When Greece entered Stage      
Three of EMU in January 2001, however, the Bank of Greece paid up the remaining 
95% of its subscribed capital.                                                  

The ECB manages the foreign reserve assets that the twelve participating
Member States have transferred to it and regularly communicates its management  
decisions to the respective national central banks, which are responsible for   
executing portfolio management operations in accordance with the instructions   
that they receive from the ECB. Management decisions by the ECB may include the 
setting of operational objectives in terms of currency distribution, interest   
rate risk, credit risk and liquidity requirements. The foreign reserve assets   
that were not transferred to the ECB at the start of Stage Three of EMU         
continue to be held and managed by the national central banks of the twelve     
participating Member States. In order to ensure consistency within the single   
monetary and foreign exchange policies of EMU, the ECB monitors and coordinates 
market transactions conducted with those assets.                                

(Source: European Central Bank, Annual Report 1998, page 74; European Central   
Bank, Annual Report 2000, page 82)                                              

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EXTERNAL POSITIONS OF BANKS                                                     

The following table shows the external assets and liabilities of the    
Deutsche Bundesbank and the commercial banks of the Federal Republic as of the  
end of each of the years indicated.                                             

FOREIGN FINANCIAL ASSETS AND LIABILITIES BY SECTOR

                                                                [Download Table]

                                          AS OF DECEMBER 31,            
                              ------------------------------------------
                               2001   2000   1999  1999(1)   1998   1997
                              -----  -----  -----  -------  -----  -----
                                 (EUR IN               (DM IN           
                                MILLIONS)             MILLIONS)         
                              ------------         --------------       
                                                                        
DEUTSCHE BUNDESBANK                                                     
Assets......................   76.1  100.8  142.0    277.7  135.1  127.8
Liabilities.................    8.8    6.6    6.2     12.1   16.0   16.9
Net Position................   67.4   94.2  135.8    265.6  119.1  110.9

BANKS                                                                   
Loans to foreign banks......  596.1  507.7  427.1    835.3  774.9  689.1
Loans to foreign non-banks..  570.3  475.8  396.1    774.7  610.3  474.8
Loans from foreign banks....  622.7  586.0  483.6    945.8  875.7  670.3
Loans from foreign non-banks  350.6  314.9  284.4    556.2  390.3  333.9


----------                                                                      
(1) Calculated  based  on official  figures  provided in  euro  using the  fixed
conversion rate of DM 1.95583 = EUR 1.                                  

(Source: Deutsche Bundesbank, Monthly Report April 2002, Tables IV.4, X.8 and   
X.9)                                                                            

FOREIGN EXCHANGE RATES AND CONTROLS                                             

The euro is a freely convertible currency. Currency transactions do not 
require licenses or other permissions. Capital market transactions are equally  
not subject to any license or similar requirements. Gold may be imported and    
exported freely, subject only to the levy of VAT on some transactions.          

ANNUAL AVERAGE EXCHANGE RATES OF THE DEUTSCHE MARK(1)                           

                                                                [Download Table]

                                1998    1997 
                               ------  ------

                                             
DM to 1 U.S. dollar..........  1.7592  1.7348
DM to 1 pound sterling.......  2.9142  2.8410
DM to 1 Swiss franc..........  1.2141  1.1951
DM to 100 French franc.......  29.829  29.705
DM to 1,000 Italian lire.....  1.0132  1.0184
DM to 100 Netherlands guilder  88.714  88.857
DM to 100 Japanese yen.......  1.3484  1.4378


----------                                                                      
(1) Calculated from daily quotations.                                           

(Source: Deutsche Bundesbank, Monthly Report April 2002, Tables X.11 and X.12)  

ANNUAL AVERAGE EXCHANGE RATES OF THE EURO(1)                                    

                                                                [Download Table]

                            2001    2000    1999 
                           ------  ------  ------

                                                 
U.S. dollars per 1 euro..  0.8956  0.9236  1.0658
Pound sterling per 1 euro  0.6219  0.6095  0.6588
Japanese yen per 1 euro..  108.68   99.47  121.32
Swiss franc per 1 euro...  1.5105  1.5579  1.6003


----------                                                                      
(1) Calculated from daily quotations.                                           

(Source: Deutsche Bundesbank, Monthly Report April 2002, Table X.11)            

BANKING SYSTEM                                                                  

 As of January 2002, 2,510 financial institutions in Germany reported an
aggregate balance sheet total of EUR 6,336.5 billion to the Deutsche Bundesbank.
According to the Deutsche Bundesbank's own classification, these institutions   
included 277 commercial banks with an aggregate balance sheet total of EUR      
1,776.8 billion. These included four major commercial banks with an aggregate   
balance sheet total of                                                          
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EUR 1,012.3 billion, 193 regional and other commercial banks, including         
privately held commercial banks, and the Deutsche Postbank AG, (with an         
aggregate balance sheet total of EUR 633.2 billion), as well as 80 subsidiaries 
or branches of foreign banks located in the Federal Republic (with an aggregate 
balance sheet total of EUR 131.3 billion).                                      

   In addition to the commercial banks, there were 528 savings banks and their
13 central institutions, the 12 Landesbanken and the DGZDekaBank, and 14 credit 
institutions with special purposes. As of January 2002, the aggregate balance   
sheet total of the savings banks was EUR 969.0 billion, and the aggregate       
balance sheet total of the Landesbanken and the DGZDekaBank was EUR 1,271.5     
billion. The aggregate balance sheet total of the credit institutions with      
special purposes was EUR 501.5 billion.                                         

 Furthermore, the Federal Republic's banking system comprises 1,619 credit
cooperatives (with an aggregate balance sheet total of EUR 543.8 billion) and   
their 2 regional institutions (with an aggregate balance sheet total of EUR     
201.5 billion), including the DZ Bank AG, which was formed after the merger of  
Deutsche Genossenschaftsbank with the GZ Bank, another regional institution of  
the credit cooperatives, 28 mortgage banks (with an aggregate balance sheet     
total of EUR 914.2 billion) and 29 building and loan associations (with an      
aggregate balance sheet total of EUR 158.2 billion).                            

(Source: Deutsche Bundesbank, Monthly Report April 2002, Table IV.2)            

 All banks other than the Deutsche Bundesbank and KfW are regulated by the
German Banking Act. German commercial banking institutions operate as           
"universal" banks and are not restricted by law or otherwise from offering a    
complete range of diverse financial services.                                   

SECURITIES MARKET                                                               

   The Federal Republic's securities market is among Europe's largest. Trading
in listed securities is not legally or otherwise confined to the stock          
exchanges. It is estimated, however, that most transactions in equity           
securities are executed through stock exchanges. By contrast, debt securities,  
although typically listed, are predominantly traded over-the-counter.           

   Highly developed secondary markets, combined with the distribution strength
of an extensive network of commercial banks, provide the basis for the Federal  
Republic's position in the world's capital markets. Equity and debt issues are  
generally underwritten and distributed through banking syndicates, which        
typically include commercial banks as well as certain regional and specialized  
institutions.                                                                   

  In 2001, sales of debt securities and shares amounted to EUR 180.4 billion
and EUR 80.1 billion, respectively.                                             

(Source: Deutsche Bundesbank, Monthly Report April 2002, Table VII.1)           

FINANCIAL SUPERVISORY AUTHORITY                                                 

   In April 2002, the Act on Integrated Financial Services Supervision (Gesetz
uber die integrierte Finanzdienstleistungsaufsicht) took effect. The act        
reorganizes the system of financial services supervision in Germany by merging  
the Federal Banking Supervisory Authority, the Federal Supervisory Authority    
for Securities Trading and the Federal Supervisory Authority for the Insurance  
Industry into one single Supervisory Authority, the Federal Institute for       
Financial Services Supervision (Bundesanstalt fur                               
Finanzdienstleistungsaufsicht), located in Bonn and Frankfurt. It is organized  
as a public law institution (Anstalt des offentlichen Rechts), and will be      
funded exclusively from fees paid by the companies subject to its supervision.  
This organizational change is a response to recent developments in the          
financial markets and the fact that companies are increasingly forming business 
combinations across sectors in order to efficiently offer comprehensive         
financial services, as demonstrated by recent mergers of insurance companies    
and banks.                                                                      

The new Financial Supervisory Authority with President Sanio began      
operations on May 1, 2002. Its task is to provide a one-stop shop for financial 
services supervision, thereby better addressing the needs of the capital        
markets for protection of investors and insured persons, and enabling financial 
services providers to install more adequate cross-sector risk-management        
devices. The reform is intended to strengthen the German financial markets,     
especially in competition with other European countries.                        

     While the organizational framework of financial markets supervision changed
as a result of the adoption of the act, the substantive rules and regulations   
will remain the same, except for the course of cooperation with the Deutsche    
Bundesbank in the ongoing supervision. For the first time, the cooperation of   
the Deutsche Bundesbank in banking supervision is regulated by law. The Deutsche
Bundesbank will be closely integrated into the ongoing supervision of the       
banking sector.                                                                 

(Source: Bundesministerium der Finanzen, press release dated March 22, 2002;    
Bundesanstalt fur Finanzdienstleistungsaufsicht, press release dated April 29,  
2002)                                                                           

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PUBLIC FINANCE

RECEIPTS AND EXPENDITURES                                                       

The Federal Government, each of the Lander governments and each of the  
municipalities have separate budgets. The federal budget is the largest single  
public budget.                                                                  

The fiscal year of the Federal Republic is the calendar year. The annual
Federal budget is passed by an act of Parliament. On the basis of a proposal    
prepared by the Ministry of Finance, the Federal Government introduces the      
Federal Budget Bill to the Parliament, generally in the fall of each year. The  
proposal has to pass through three Bundestag sessions, the budget committee and 
the Bundesrat, which deliberates the proposal twice. The final vote on the      
proposal is taken by the Bundestag in its third session.                        

    In addition to the federal, Lander and municipal budgets, there are separate
budgets of the social security system and various special funds                 
(Sondervermogen) of the federal administration that are created for specific    
public purposes.                                                                

Starting with the 2001 fiscal year, a new budgetary classification took 
effect. Because receipts and expenditures are allocated differently under the   
new classification, line items contained in the budgets drawn up for the 2001   
and subsequent fiscal years are not necessarily comparable with the respective  
line items contained in budgets for prior periods. This is true especially with 
respect to General Services and General Financing.                              

   In 2001, total consolidated public sector receipts as shown in the national
accounts according to ESA figures amounted to EUR 952.1 billion, with tax       
receipts of EUR 488.7 billion and social security receipts of EUR 383.6         
billion.                                                                        

(Source: Deutsche Bundesbank, Monthly Report April 2002, Table VIII.3)          

    In 2001, turnover taxes (i.e., VAT and import-turnover tax) and income taxes
amounted to EUR 138.9 billion and EUR 170.8 billion, respectively. In addition  
to these taxes, the Federal Government and the Lander governments each levied   
special taxes, for example on tobacco, beer and motor vehicles. The joint taxes 
are distributed among the Federal Government, the Lander governments and        
municipal authorities, according to a predetermined formula.                    

(Source: Deutsche Bundesbank, Monthly Report April 2002, Table VIII.5)          

 Consolidated public sector expenditures in 2001, as shown in the national
accounts, amounted to a total of EUR 1,008.4 billion. The most significant      
consolidated public sector expenditures were social transfers and benefits (EUR 
548.3 billion) and employee compensation (EUR 165.3 billion). Other significant 
consolidated public sector expenditures included gross capital formation, which 
totaled EUR 36.1 billion, and interest on public debt, which totaled EUR 66.5   
billion.                                                                        

(Source: Deutsche Bundesbank, Monthly Report April 2002, Table VIII.3)          

The consolidated budget deficit shown in the national accounts increased
from an amount, adjusted for receipts from UMTS license auctions, of EUR 26.9   
billion in 2000 to EUR 56.3 billion in 2001. The UMTS license auction generated 
proceeds of EUR 50.9 billion resulting in an actual net budget surplus of EUR   
24.0 billion or 1.2% in 2000 before the adjustment. In 2001, the budget deficit 
was 2.7% of GDP.                                                                

(Source: Deutsche Bundesbank, Monthly Report April 2002, Table VIII.3)          

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 PUBLIC SECTOR ACCOUNTS(1)

                                                        [Enlarge/Download Table]

                                                               2001(2)(6)  2000(2)  1999(2)  1999(6)(7)  1998(6)    1997  
                                                               ----------  -------  -------  ----------  -------  ------- 

                                                                     (EUR IN BILLIONS)             (DM IN BILLIONS)       
                                                               ----------------------------  ---------------------------- 
                                                                                                                          
Federal Government, Lander governments and municipalities (3)                                                             
 Receipts ...................................................       553.5    613.3    566.0     1,107.0  1,072.1  1,014.3 
   of which taxes............................................       446.2    467.3    453.1       886.2    833.0    797.2 
 Expenditures ...............................................       601.3    594.9    592.9     1,159.6  1,128.8  1,108.9 
 Balance ....................................................       (47.8)    18.4    (26.9)      (52.6)   (56.7)   (94.5)
Social security(4)                                                                                                        
 Receipts(5) ................................................       443.5    433.6    429.1       839.2    812.2    797.3 
 Expenditures ...............................................       447.6    433.8    425.7       832.6    808.9    794.5 
 Balance ....................................................        (4.1)    (0.3)     3.5         6.8      3.3      2.9 
Consolidated public sector...................................                                                             
 Receipts ...................................................       920.1    975.5    925.4     1,809.9  1,766.0  1,705.3 
 Expenditures ...............................................       972.2    957.1    948.8     1,855.7  1,819.3  1,797.0 
 Balance ....................................................       (52.2)    18.4    (23.4)      (45.8)   (53.3)   (91.7)


----------                                                                      
(1) The  budgetary definition used  here differs from  the methods used  for the
government account of the national accounts as shown in the text above. 

(2) Figures are partly based on estimates.                                      

(3) Includes special funds.                                                     

(4) Includes  statutory  pension  insurance  funds,  the Federal  Labor  Office,
   statutory health insurance and accident insurance, retirement pension funds
for farmers and supplementary pension funds for government employees.   

(5) Includes  Federal  Government  liquidity  assistance  to the  Federal  Labor
Office.                                                                 

(6) Preliminary.                                                                

(7) Calculated  based  on official  figures  provided in  euro  using the  fixed
conversion rate of DM 1.95583 = EUR 1.                                  

(Source: Deutsche Bundesbank, Monthly Report April 2002, Table VIII.1)          

 FEDERAL GOVERNMENT ACCOUNTS

                                                                [Download Table]

                 2001(1)  2000(1)  1999(2)  1999(2)(3)   1998   1997 
                 -------  -------  -------  ----------  -----  ----- 

                     (EUR IN BILLIONS)          (DM IN BILLIONS)     
                 -------------------------  ------------------------ 
                                                                     
Receipts.......    261.0    291.4    240.3       470.0  439.0  416.8 
 of which taxes    212.8(2) 219.0    211.7       414.1  379.5  368.2 
Expenditures...    261.0    264.6    266.5       521.2  495.6  480.3 
Total balance..     (0.0)    26.8    (26.2)      (51.5) (56.6) (63.5)


----------                                                                      
(1) Partly estimated.                                                           

(2) Provisional figures.                                                        

(3) Calculated  based  on official  figures  provided in  euro  using the  fixed
conversion rate of DM 1.95583 = EUR 1.                                  

(Source: Deutsche Bundesbank, Monthly Report April 2002, Tables VIII.2 and      
VIII.4)                                                                         

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FEDERAL GOVERNMENT EXPENDITURES(1)

                                                        [Enlarge/Download Table]

                                                2003(2)  2002(2)    2001   2000(3)  1999(3)
                                                -------  -------  -------  -------  -------

                                                             (EUR IN BILLIONS)             
                                                -------------------------------------------
                                                                                           
Expenditures total............................  249,400  247,500  243,145  244,405  246,869
Selected categories:                                                                       
Education, science, research, cultural affairs   11,042   10,994   10,645    9,888    9,930
Social security...............................  105,020  105,997  102,034  100,761  100,301
 of which:                                                                                 
 Subsidies to social welfare Insurance                                                     
   (including unemployment insurance) ........   80,525   79,738   75,896   70,420   68,977
 Family and child benefits ...................    3,498    3,461    3,325    3,409    3,519
 Labor market policy .........................   12,166   13,678   13,462   14,645   17,833
 Promotion of savings and investments ........      500      500      486      451      423
Defense.......................................   27,549   27,485   27,958   23,251   24,599
Transportation/Communication..................    9,821    9,965    9,775    9,404    9,612
General Financing.............................   44,456   43,589   43,530   51,620   53,422
 of which:                                                                                 
 Debt service ................................   40,464   38,995   37,662   39,198   41,126
Other expenditures                                                                         
 Economic Cooperation ........................    3,512    3,621    3,697    3,602    3,933
 Health ......................................      332      353      403      118      126
 Housing, Regional Planning ..................    1,898    2,075    2,200    2,297    2,505
 Food, Agriculture, Forestry .................    1,277    1,316    1,371    1,633    1,621


----------                                                                      
(1) The  information  presented in  this  table concerning  expenditures is  not
comparable to the information concerning expenditures presented in the  
table "Federal Government Accounts" as the information is derived from  
different sources and is the result of different methods of data        
compilation.                                                            

(2) Government projection.                                                      

(3) Calculated  based on  official figures provided  in Deutsche Mark  using the
fixed conversion rate of DM 1.95583 = EUR 1.                            

(Source: Bundesministerium der Finanzen, Finanzbericht 2002, Table 2, pages     
212-214, Table 4, pages 222-223; Ebersichten zum Bundeshaushaltsplan 2002,      
pages 14-20)                                                                    

TAX STRUCTURE                                                                   

Income tax                                                                      

   The Federal Government's largest source of revenue is income tax. Employees
pay income tax in the form of payroll taxes, which employers are required to    
deduct from employees' salaries or wages and pay directly to the tax            
authorities. In contrast, self-employed persons typically pay estimated taxes   
during the year before filing their annual income tax return. The income tax    
payable with respect to taxable income generated during the 2002 fiscal year is 
calculated on the basis of (i) a personal allowance in the amount of EUR 7,235  
for single persons/ EUR 14,471 for married couples that applies to all          
taxpayers, (ii) progressive tax brackets ranging from 19.9% to 48.5%, and (iii) 
a flat rate of 48.5% for net income in excess of EUR 55,007 for single persons/ 
EUR 110,015 for married couples. In addition, a solidarity surcharge of 5.5% is 
imposed on the applicable income tax rate to finance the restructuring          
processes in the eastern Lander. Capital income received by domestic taxpayers  
is subject to capital income withholding tax (Kapitalertragssteuer) at a rate   
of 30% for interest payments and 20% for dividend payments, respectively,       
subject to an allowance in the amount of EUR 1,601 (EUR 3,202 for married       
couples). The tax withheld is credited against the taxpayers' income tax        
liability. Tax rates and allowances will change in future periods. See "---Tax  
Reform 2000".                                                                   

Since January 2001, income generated by corporations is subject to    
corporate income tax at a flat rate of 25%, which is a drastic reduction        
compared to the former 45% for retained earnings and 30% for distributed        
profits. The full imputation system previously used in connection with the      
taxation of dividends has been replaced by the so-called "half income system" in
2002 to make cross- border investment within the EU more attractive. Under the  
half income system, only half of the distributed profits of a corporation is    
included in the shareholders' income. Accordingly, it is no longer necessary to 
credit the corporate tax paid by the company against the shareholders' income   
tax liability. Starting with the 2002 tax year, capital gains from the sale of  
shareholdings from one corporation to another are generally tax-exempt. Private 
shareholders are able to sell their stakes after a minimum holding period of one
year without having to pay                                                      

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taxes, unless they hold a substantial interest. If the sale is taxable, the     
half income method is applied to it. Furthermore, the tax-free allowance for the
sale or closure of a business has been raised from approximately EUR 30,680 to  
EUR 51,200 in 2002. In addition, the "half-average tax rate", which was         
abolished in 1999, has been reintroduced for entrepreneurs retiring from        
business. Various measures have been adopted to finance the tax relief,         
including a reduction of the depreciation rate that applies to current assets   
from 30% to 20% as well as a reduction of the respective rate for fixed assets  
from 4% to 3%.                                                                  

Value-added tax                                                                 

Value-added tax ("VAT") is imposed on the value added to most goods and 
services. The rate applicable to most goods and services is 16%. Certain items  
that are classified as basic necessities are subject to a 7% rate.              

Environmental tax                                                               

On April 1, 1999, an environmental tax scheme was introduced in order to
encourage energy conservation, to lower social security contributions of labor  
and to allocate the burden of taxes and contributions more equally among labor, 
capital and natural resources. Pursuant to this scheme and subject to certain   
exceptions, electricity consumption initially was taxable at a rate of EUR      
0.0102 per kWh, and the petroleum tax was increased by EUR 0.0307 per liter of  
gasoline, EUR 0.0205 per liter of fuel oil, and EUR 0.0164 per kWh of gas.      
While the tax increase on fuel oil and gas was a non-recurring measure, the     
petroleum tax and the electricity tax have increased annually by EUR 0.0307 per 
liter and by EUR 0.026 per kWh, respectively, since 1999 and will continue to   
do so until 2003. Additionally, since November 1, 2001, the petroleum tax rate  
is differentiated according to the gasoline's sulfur content. The higher        
revenues generated by these energy taxes have enabled the Federal Government to 
reduce and stabilize the rate of contribution to the pension insurance scheme   
(Beitragssatz der gesetzlichen Rentenversicherung).                             

Trade tax                                                                       

    Historically, the trade tax, which is levied at municipal level, comprised a
tax on both the trade earnings and the trade capital of a business. The trade   
capital tax was abolished, effective January 1, 1998. By contrast, the trade    
earnings tax is still in effect. Its rate varies and depends on a number of     
factors, including the nature of the business subject to the trade tax as well  
as the municipality that levies the tax. A business' trade earnings are         
calculated in accordance with specific rules and are not necessarily identical  
with that business' earnings as calculated for other purposes. The trade tax is 
deductible as an operating expenditure and thus has an effect on personal as    
well as corporate income taxes. Unincorporated businesses, which already        
particularly benefit from the significant cuts in income tax rates in the wake  
of the Tax Reform 2000, thereby obtain an additional reduction of their tax     
burden.                                                                         

Tax reform 2000                                                                 

In July 2000, the Tax Reduction Act (Steuersenkungsgesetz) was adopted. 
Following a resolution of the Bundesrat, calling for additional tax relief for  
small and medium sized enterprises, the Federal Government presented the        
Supplementary Tax Reduction Act (Steuersenkungserganzungsgesetz), which was     
passed in November/December 2000. The entire tax reform package, called the     
"Tax Reform 2000", is the most ambitious tax reduction program in the history   
of the Federal Republic. It came into effect on January 1, 2001. The main       
beneficiaries of the Tax Reform 2000 are families, employees and small and      
medium-sized enterprises. Until 2005, the Tax Reform 2000 provides for a total  
annual relief in the amount of EUR 32 billion compared to the 1998 tax burden.  

As far as personal income tax is concerned, the first stage of the Tax  
Reform 2000 accelerated the effective date of a previously enacted tax decrease 
by one year from January 1, 2002 to January 1, 2001. In two subsequent stages,  
which will take effect on January 1, 2003 and January 1, 2005, the personal     
allowance will be increased to EUR 7,664 for single persons (from currently EUR 
7,235) and EUR 15,329 for married couples (from currently EUR 14,471), the      
minimum tax bracket will be lowered to 15% (from currently 19.9%), and the      
maximum tax bracket will be lowered to 42% (from currently 48.5%). In addition, 
effective January 1, 2005, the maximum flat rate will be applied only to income 
in excess of EUR 52,151 for single persons (currently EUR 55,007) and EUR       
104,303 for married couples (currently EUR 110,015).                            

In addition to the Tax Reform 2000, the Bundestag adopted the Act for 
Development of Corporate Taxation (Gesetz zur Fortentwicklung des               
Unternehmenssteuerrechts), which took effect on January 1, 2002. It contains a  
number of short-term measures particularly benefiting small and medium sized    
enterprises. Most importantly, a reinvestment reserve makes it easier for small 
and medium-sized partnerships to restructure their equity, resulting in a total 
relief of EUR 650 million. Additionally, the act                                

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contains provisions on the tax treatment of international transactions and      
the taxation of affiliated enterprises.                                         

(Source: www.bundesfinanzministerium.de/Steuern-und-Zoelle/Lexikon-Steuern-A-Z- 
..701.htm,                                                                      
www.bundesfinanzministerium.de/Anlage10009/Tax-Reform-2000-an-Overview.pdf,     
www.bundesfinanzministerium.de/Anlage10654/Die-Oekosteuer-ein-Plus-fuer-Arbeit- 
und-Umwelt.pdf, www.bundesfinanzministerium.de/Anlage1937/BMF-Schreiben-vom-    
16.05.2001.pdf)                                                                 

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TAX REVENUES OF THE FEDERAL, LANDER AND LOCAL AUTHORITIES(1)

                                                        [Enlarge/Download Table]

                                        2002(2)  20001(2)  2000(3)  1999(3)    1999     1998 
                                        -------  --------  -------  -------  -------  -------

                                             (EUR IN MILLIONS)           (DM IN MILLIONS)    
                                        --------------------------  -------------------------
                                                                                             
Federal taxes(4)......................   84,108    79,277   75,503   72,235  141,279  130,513
Share of the Federal Government in(5):                                                       
 Wage tax and assessed income                                                                
   tax ...............................   60,094    62,236   62,882   61,496  120,275  114,492
 Capital gains tax and corporate                                                             
   tax ...............................   11,200    10,229   18,545   16,834   32,924   29,474
 Interest withholding tax ............    3,973     3,943    3,227    2,660    5,202    5,232
 Value added and import-                                                                     
   turnover tax ......................   74,865    72,257   66,494   66,162  129,401  115,394
 Trade tax ...........................    2,058     1,513    1,327    1,305    2,552    2,351
 Total Federal taxes(6) ..............  199,472   193,766  198,790  192,447  376,394  341,485
Lander taxes(7).......................   19,824    19,628   18,443   19,564   38,263   37,300
Share of the Lander governmentsin(5):                                                        
 Wage tax and assessed                                                                       
   incometax .........................   62,236    60,094   62,882   61,496  120,275  114,492
 Capital gains tax and                                                                       
   corporationtax ....................   11,200    10,229   18,545   16,834   32,924   29,474
 Interest withholding tax ............    3,973     3,943    3,227    2,660    5,202    5,232
 Value added and import-                                                                     
   turnover tax ......................   67,741    63,794   61,957   60,013  117,375  111,696
 Trade tax ...........................    4,694     3,997    4,194    4,158    8,133    7,933
 Total Lander taxes(8) ...............  189,957   178,690  189,493  184,003  359,879  344,132

Municipal authorities taxes(9)........    9,950     9,898    9,633    9,460   18,502   17,760
Share of the municipalities in:                                                              
 Wage tax and assessed                                                                       
   incometax .........................   23,050    22,285   23,074   22,430   43,869   41,836
 Value added and import-                                                                     
   turnover tax(10) ..................    3,023     2,884    2,925    2,847    5,569    5,304
 Trade tax ...........................   19,131    18,851   21,505   21,596   42,239   40,225
 Total municipal authorities                                                                 
   taxes .............................   55,154    53,918   57,136   56,334  110,180  105,125
Revenues of EU (11):                                                                         
 Customs duties ......................    3,225     3,191    3,394    3,186    6,231    6,486
 Value added tax .....................    6,000     8,031    9,496    8,134   15,908   17,820
 Tax based on nominal GNP ............   12,700     8,031    8,943    8,964   17,533   17,965
 Total tax revenues                     466,508   446,107  467,252  453,069  886,125  833,013


----------                                                                      
(1) The  information presented in this table concerning  Federal tax receipts is
not comparable to the information concerning tax receipts in the table  
   "Federal Government Accounts" as the information was derived from different
sources and is the result of different methods of data compilation.     

(2) 2001:  Municipal authorities taxes and trade  tax estimated. 2002: Projected
figures, Arbeitskreis Steuerschatzung, November 2001, adjusted to actual
legislation.                                                            

(3) Calculated  based on  official figures provided  in Deutsche Mark  using the
fixed conversion rate of DM 1.95583 = EUR 1.                            

(4) Including,  among others,  taxes on tobacco,  distilled spirits  and mineral
fuels.                                                                  

(5) Shared  taxes are levied  by the Federal  Government (with the  exception of
   the trade tax which is levied by the municipal authorities) and distributed
   among the Federal Government, the Lander governments and the municipalities
according to specific distribution schedules.                           

(6) Net of Federal grants to certain Lander and of EU contributions.            

(7) Includes, among others, taxes on property, motor vehicles and beer.         

(8) Including Federal grants to certain Lander.                                 

(9) Includes, among others, inheritance and gift tax, taxes on real property.   

(10)Beginning  in  1998, municipalities  share in  value added  tax and  import-
turnover tax.                                                           

(11)Reflects  revenue collections  made by the  Federal Government on  behalf of
others.                                                                 

(Source: Bundesministerium der Finanzen, Finanzbericht 2002, Table 13, pages    
268-278)                                                                        

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GOVERNMENT PARTICIPATIONS                                                       

  At the end of 2000, the Federal Republic held direct participations in 103
public or private enterprises, and various special funds held participations in 
22 (19 without double counting) enterprises. The aggregate nominal capital of   
the enterprises in which the Federal Republic or the special funds held direct  
participations amounted to EUR 14.8 billion (DM 28.9 billion) as per December   
31, 2000 compared to EUR 15.0 billion (DM 29.3 billion) as per December 31,     
1999. Calculated based on official figures provided in Deutsche Mark using the  
fixed conversion rate of DM 1.95583 = EUR 1.                                    

(Source: Bundesministerium der Finanzen, Beteiligungsbericht 2000, page 3;      
Beteiligungsbericht 2001, pages 1, 3)                                           

   The following table shows information on the Federal Republic's significant
participations (including those held through its "special funds") at the end of 
September 2001.                                                                 

                                                        [Enlarge/Download Table]

                                                      NOMINAL CAPITAL       PARTICIPATION OF THE 
                                                    OF ENTERPRISE AS PER  FEDERAL REPUBLIC AS PER
                    ENTERPRISES                    SEPTEMBER 30, 2001(1)     SEPTEMBER 30, 2001  
-------------------------------------------------  ---------------------  -----------------------
                                                     (EUR IN MILLIONS)           (PERCENT)       
                                                   ---------------------  -----------------------

                                                                                                 
Significant majority participations:                                                             
Deutsche Ausgleichsbank..........................                    511                    100.0
Deutsche Bahn AG.................................                  2,147                    100.0
Deutsche Post AG.................................                  1,113                     50.0
                                                                                   plus 26 shares
Kreditanstalt fur Wiederaufbau...................                    511                     80.0

Significant minority participations exceeding 25%                                                
Deutsche Telekom AG..............................                  7,756                     30.9
Flughafen Munchen GmbH...........................                    307                     26.0


----------                                                                      
(1) Calculated  based on  official figures provided  in Deutsche Mark  using the
fixed conversion rate of DM 1.95583 = EUR 1.                            

Source: Bundesministerium der Finanzen, Beteiligungsbericht 2001, pages 3-7,    
12, 102-103, 142 and Chapter K, Table III, pages 253-296)                       

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DEBT OF THE FEDERAL GOVERNMENT

    As per December 31, 2001, the Federal Government's total debt, not including
the debt of the Lander governments and the municipalities, amounted to EUR      
701.1 billion, or 35.2% of the 2000 GDP at current prices, compared to EUR      
715.8 billion, or 36.0% of the 1999 GDP at prices of December 31, 1999. Since   
July 1, 1999, the Federal Government has assumed joint liability for the debts  
of the following special funds: Sinking Fund for Vested Liabilities             
(Erblastentilgungsfonds) (for former GDR liabilities), the Federal Railway Fund 
(Bundeseisenbahnvermogen) and the Compensation Fund for Safeguarding the Use of 
Coal (Ausgleichsfonds Steinkohleneinsatz). The aforementioned special funds are 
allocated to the Federal Government as of July 1999.                            

(Source: Deutsche Bundesbank, Monthly Report April 2002, Tables VIII.10 and     
IX.1)                                                                           

   The Federal Government raises funds primarily through the issuance of bonds
and notes and through Schuldscheindarlehen. The Federal Government does not     
raise funds in foreign currencies and does not issue secured debt. Starting     
January 1, 1999, the Federal Government has been raising all funds in euro.     
Bonds and notes issued by the Federal Republic are evidenced by book entry and  
no certificates are issued.                                                     

  In addition to its own direct debt obligations, the Federal Government had
outstanding guarantees in an aggregate amount of EUR 211,644 billion as per     
June 30, 2001. Of this amount, EUR 105,505 billion was outstanding in the form  
of export credit insurance, which is handled by HERMES on behalf and for the    
account of the Federal Government.                                              

(Source: Bundesministerium der Finanzen, Finanzbericht 2002, Overview 4, page   
328)                                                                            

 For more detailed information regarding the Federal Government's debt and
guarantees, see "Tables and Supplementary Information".                         

 For information on the Federal Government's liability as per December 31,
2000 for capital subscriptions to various international financial               
organizations, see the table entitled "III. Liabilities to International        
Financial Organizations", below.                                                

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TABLES AND SUPPLEMENTARY INFORMATION

I. DIRECT DEBT OF THE FEDERAL GOVERNMENT

 SUMMARY

                                                                [Download Table]

                                          PRINCIPAL    
                                            AMOUNT     
                                        OUTSTANDING AS 
                                         PER DECEMBER  
                                           31, 2001    
                                      -----------------

                                      (EUR IN MILLIONS)
                                                       

Federal bonds.......................            433,573
Bonds of the Federal Railways.......              7,669
Five-year special Federal bonds.....            132,750
Federal Treasury notes..............             64,000
Federal savings bonds...............             26,394
Treasury discount paper.............             19,478
Federal Treasury financing paper....              1,658
Borrowers' note loans of which:.....             44,790
 -- from residents .................             43,707
 -- from non-residents .............              1,083
Old debt(2) of which:...............              9,180
 Equalization claims ...............              8,671
Assumed debt of equalization fund...                  0
Other...............................                 40
Repurchased debt....................             43,201
Medium term notes of Treuhandanstalt               9,56
                                      -----------------

Total...............................            697,290
                                      =================


----------                                                                      
(1) Mainly  equalization and covering  claims of the Deutsche  Bundesbank, other
banks and insurance companies in connection with the currency reform of 
1948.                                                                   

(Source: Bundesministerium der Finanzen, Ubersicht uber den Stand der Schuld    
der Bundesrepublik Deutschland am 31. Dezember 2001, Bundesanzeiger Nr. 44 of   
March 5, 2002, page 3867)                                                       

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 DEBT TABLES

1.  FEDERAL BONDS(1)                                                            

                                                        [Enlarge/Download Table]

                                                                                                      PRINCIPAL    
                                                                                                        AMOUNT     
                                                                                                    OUTSTANDING AS 
                                                                                                     PER DECEMBER  
TITLE                                                     INTEREST RATE  YEAR OF ISSUE  MATURITY       31, 2001    
--------------------------------------------------------  -------------  -------------  --------  -----------------
                                                             (% P.A.)                             (EUR IN MILLIONS)
                                                                                                                   

6% Bonds of the Federal Republic of 1986 (Second Series)              6           1986      2016           3,579.04
5.625% Bonds of the Federal Republic of 1986............          5.625           1986      2016             511.29
8% Bonds of the Federal Republic of 1992................              8           1992      2002           7,669.38
7.25% Bonds of the Federal Republic of 1992.............           7.25           1992      2002           5,112.92
7.125% Bonds of the Federal Republic of 1992............          7.125           1992      2002           8,180.67
7.75% Bonds of the Treuhandanstalt of 1992..............           7.75           1992      2002           5,112.92
7.375% Bonds of the Treuhandanstalt of 1992.............          7.375           1992      2002           5,112.92
8% Bonds of the Federal Railways of 1992................              8           1992      2002           3,067.75
7.5% Bonds of the Federal Railways of 1992..............            7.5           1992      2002           2,045.17
6.75% Bonds of the Federal Republic of 1993.............           6.75           1993      2003           5,112.92
6.5% Bonds of the Federal Republic of 1993..............            6.5           1993      2003           8,180.67
6% Bonds of the Federal Republic of 1993................            6.0           1993      2003           6,135.50
7.125% Bonds of the Treuhandanstalt of 1993.............          7.125           1993      2003           7,158.09
6.5% Bonds of the Treuhandanstalt of 1993...............            6.5           1993      2003           5,112.92
6.875% Bonds of the Treuhandanstalt of 1993.............          6.875           1993      2003           5,112.92
6.625% Bonds of the Treuhandanstalt of 1993.............          6.625           1993      2003           5,112.92
6% Bonds of the Treuhandanstalt of 1993.................              6           1993      2003           5,112.92
6.125% Bonds of the Federal Railways of 1993............          6.125           1993      2003           2,556.46
6.25% Bonds of the Federal Republic of 1994.............           6.25           1994      2024          10,225.84
6.75% Bonds of the Federal Republic of 1994.............           6.75           1994      2004           5,112.92
7.5% Bonds of the Federal Republic of 1994..............            7.5           1994      2004           5,112.92
Floating Bonds of the Federal Republic of 1994..........         float.           1994      2004           5,112.92
6.25% Bonds of the Treuhandanstalt of 1994..............           6.25           1994      2004           4,090.34
6.75% Bonds of the Treuhandanstalt of 1994..............           6.75           1994      2004           4,090.34
7.5% Bonds of the Treuhandanstalt of 1994...............            7.5           1994      2004           5,112.92
7.375% Bonds of the Federal Republic of 1995............          7.375           1995      2005           8,691.96
6.875% Bonds of the Federal Republic of 1995............          6.875           1995      2005          10,225.84
6.5% Bonds of the Federal Republic of 1995..............            6.5           1995      2005          10,225.84
6% Bonds of the Federal Republic of 1996................              6           1996      2006          12,782.30
6% Bonds of the Federal Republic of 1996................              6           1996      2006           6,135.50
6.25% Bonds of the Federal Republic of 1996.............           6.25           1996      2006           7,158.09
6% Bonds of the Federal Republic of 1997................              6           1997      2007          15,338.76
6% Bonds of the Federal Republic of 1997 (Second Series)              6           1997      2007          15,338.76
6.5% Bonds of the Federal Republic of 1997..............              6           1997      2027          11,248.42
5.25% Bonds of the Federal Republic of 1998.............           5.25           1998      2008          15,338.76
5.625% Bonds of the Federal Republic of 1998............          5.625           1998      2028          14,316.17
4.75% Bonds of the Federal Republic of 1998.............           4.75           1998      2008           8,691.96
4.75% Bonds of the Federal Republic of 1998.............           4.75           1998      2028          11,100.00
4.125% Bonds of the Federal Republic of 1998............          4.125           1998      2008          13,804.88
3.75% Bonds of the Federal Republic of 1999.............           3.75           1999      2009          14,000.00
4% Bonds of the Federal Republic of 1999................              4           1999      2009          11,000.00
4.5% Bonds of the Federal Republic of 1999..............            4.5           1999      2009          20,000.00
5.375% Bonds of the Federal Republic of 1999............          5.375           1999      2010          20,000.00
6,25% Bonds of the Federal Republic of 2000.............           6.25           2000      2030           9,000.00
5,5% Bonds of the Federal Republic of 2000..............            5.5           2000      2031          11,000.00
5,25% Bonds of the Federal Republic of 2000.............           5.25           2000      2010          20,000.00
5,25% Bonds of the Federal Republic of 2000.............           5.25           2000      2011          23,000.00
5% Bonds of the Federal Republic of 2001................              5           2001      2011          24,000.00
                                                                                                  -----------------
Total Federal Bonds.....................................                                                 441,242.82
                                                                                                  =================

----------                                                                      
(1) Federal  Bonds are evidenced by book entry, and  no certificates are issued.
Maturities are 10 to 30 years. No redemption prior to maturity; incl.   
principal strips.                                                       
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2.  FIVE-YEAR SPECIAL FEDERAL BONDS(1)                                          

                                                        [Enlarge/Download Table]

                                                                                   PRINCIPAL    
                                                                                     AMOUNT     
                                                                                 OUTSTANDING AS 
                                                                                  PER DECEMBER  
TITLE                                  INTEREST RATE  YEAR OF ISSUE  MATURITY       31, 2001    
-------------------------------------  -------------  -------------  --------  -----------------
                                          (% P.A.)                             (EUR IN MILLIONS)
                                                                                                

4.5% Bonds of 1997-Series 122........            4.5           1997      2002           6,646.79
4.5% Bonds of 1997-Series 123........            4.5           1997      2002           6,646.79
4.5% Bonds of 1997-Series 124........            4.5           1997      2002           7,669.38
5% Bonds of 1997-Series 125..........              5           1997      2002           8,180.67
4.5% Bonds of 1998-Series 126........            4.5           1998      2003           6,646.79
4.5% Bonds of 1998-Series 127........            4.5           1998      2003           7,669.38
3.75% Bonds of 1998-Series 128.......           3.75           1998      2003           6,624.21
3.5% Bonds of 1998-Series 129........            3.5           1998      2003           6,000.00
3.25% Bonds of 1999-Series 130.......           3.25           1999      2004           8,000.00
3.25% Bonds of 1999-Series 131.......           3.25           1999      2004           1,500.00
4.125% Bonds of 1999-Series 132......          4.125           1999      2004           5,000.00
4.250% Bonds of 1999-Series 133......          4.250           1999      2004           6,000.00
4.250% Bonds of 1999-Series 134......          4.250           1999      2005           7,000.00
5% Bonds of 2000-Series 135..........              5           2000      2005           6,000.00
5% Bonds of 2000-Series 136..........              5           2000      2005          15,000.00
5% Bonds of 2000-Series 137..........              5           2000      2006          14,000.00
4,5% Bonds of 2001-Series 138........            4,5           2001      2006          14,000.00
4% Bonds of 2001-Series 139..........              4           2001      2006             166.37
                                                                               -----------------
Total Five Year Special Federal Bonds                                                 132,750.38
                                                                               =================


----------                                                                      
(1) Five  Year  Special  Federal  Bonds are  evidenced  by  book entry,  and  no
  certificates are issued. Maturities are five years. No redemption prior to
maturity.                                                               

3.  FEDERAL TREASURY NOTES(1)                                                   

                                                        [Enlarge/Download Table]

                                                                          PRINCIPAL    
                                                                            AMOUNT     
                                                                        OUTSTANDING AS 
                                                                         PER DECEMBER  
TITLE                         INTEREST RATE  YEAR OF ISSUE  MATURITY       31, 2001    
----------------------------  -------------  -------------  --------  -----------------
                                 (% P.A.)                             (EUR IN MILLIONS)
                                                                                       
4.50% Notes of 2000.........           4.50           2000      2002           6,000.00
5.00% Notes of 2000.........           5.00           2000      2002           5,000.00
5.00% Notes of 2000.........           5.00           2000      2002           5,000.00
4.75% Notes of 2000.........           4.75           2000      2002           8,000.00
4.25% Notes of 2001.........           4.25           2001      2003          10,000.00
4.25% Notes of 2001.........           4.25           2001      2003          10,000.00
3.75% Notes of 2001.........           3.75           2001      2003          10,000.00
3.5% Notes of 2001..........            3.5           2001      2003          10,000.00
                                                                      -----------------
Total Federal Treasury Notes                                                  64,000.00
                                                                      =================


----------                                                                      
(1) Federal Treasury  Notes are evidenced by book entry, and no certificates are
issued. Maturities are 2 years. No redemption prior to maturity.        

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4.  FEDERAL SAVINGS BONDS(1)                                                    

                                                        [Enlarge/Download Table]

                                                                     PRINCIPAL AMOUNT 
                                                                    OUTSTANDING AS PER
                        INTEREST RATE  YEAR OF ISSUE    MATURITY     DECEMBER 31, 2001
                       --------------  -------------  ------------  ------------------

                                                                     (EUR IN MILLIONS)
                                                                                      

Federal Savings Bonds  2.25% to 8.25%   1995 to 2001  2002 to 2008           26,394.13


5.  TREASURY DISCOUNT PAPER(2)                                                  

                                                        [Enlarge/Download Table]

                                                                     PRINCIPAL AMOUNT 
                                                                    OUTSTANDING AS PER
                         INTEREST RATE(3)  YEAR OF ISSUE  MATURITY   DECEMBER 31, 2001
                         ----------------  -------------  --------  ------------------

                                                                     (EUR IN MILLIONS)
                                                                                      
Treasury Discount Paper     3.4% to 4.30%           2001      2002              19,478

6.  FEDERAL TREASURY FINANCING PAPER(4)                                         

                                                        [Enlarge/Download Table]

                                                                                  PRINCIPAL AMOUNT 
                                                                                 OUTSTANDING AS PER
                                  INTEREST RATE(3)  YEAR OF ISSUE    MATURITY     DECEMBER 31, 2001
                                  ----------------  -------------  ------------  ------------------

                                                                                  (EUR IN MILLIONS)
                                                                                                   
Federal Treasury Financing Paper    2.72% to 4.63%   2000 to 2001  2002 to 2003               1,658

7.  BORROWERS' NOTE LOANS(5)                                                    

                                                        [Enlarge/Download Table]

                                                                         PRINCIPAL AMOUNT 
                                                                        OUTSTANDING AS PER
                       INTEREST RATE  YEAR OF INCURRENCE    MATURITY     DECEMBER 31, 2001
                       -------------  ------------------  ------------  ------------------

                                                                         (EUR IN MILLIONS)
                                                                                          
Borrowers' note loans  3.3% to 8.00%        1979 to 2001  2002 to 2007              44,790


----------                                                                      
(1) Government  Savings Bonds  are evidenced by  book entry and  no certificates
are issued. Maturities are six or seven years. The Bonds are redeemable 
  after one year from the issue date at the option of the holders thereof in
   installments of EUR 5,113 per holder and month. The terms of the Government
 Savings Bonds provide for interest rates that increase during the term of
   the Bonds. In addition, the seven year Government Savings Bonds provide for
payment of compounded interest at maturity or upon redemption prior to  
maturity.                                                               

(2) Treasury  Discount Papers are issued  at a discount and repaid  at par value
  on the maturity date. No interest payments are made during the term of the
 paper. It is issued in the form of one global bearer security. Maturities
range from one year to two years. No redemption is permitted prior to   
maturity.                                                               

(3) Reflects  annual interest  rate paid  to the  holder by  way of  the initial
issue discount.                                                         

(4) Treasury  Financing Papers are issued at a discount  and repaid at par value
  on the maturity date. No interest payments are made during the term of the
 paper. It is issued in the form of one global bearer security. Maturities
range from one year to two years. No redemption is permitted prior to   
maturity.                                                               

(5) Borrowers'  note loans are an instrument of the  German capital market where
the lending entity, generally an institutional investor, receives a     
   certificate evidencing its loan to the borrower and the term of such loans.
The certificate generally authorizes at least three assignments. No     
redemption is permitted prior to maturity.                              

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8.  OTHER LIABILITIES                                                           

                                                        [Enlarge/Download Table]

                                                                                                                    PRINCIPAL    
                                                                                                                      AMOUNT     
                                                                                                                  OUTSTANDING AS 
                                                                                            YEAR OF                PER DECEMBER  
TITLE                                                                      INTEREST RATE  INCURRENCE  MATURITY       31, 2001    
-------------------------------------------------------------------------  -------------  ----------  --------  -----------------
                                                                                                                (EUR IN MILLIONS)
                                                                                                                                 

Old debt(1)..............................................................     1% to 8.9%     Various   Various              9,180
Debt of Equalization of Burdens Fund taken over by the Federal Government        Various        1980   Various               0.31
Other debt(2)............................................................        Various     Various   Various              40.47


----------                                                                      
(1) Includes   mainly  equalization   and  covering   claims  of   the  Deutsche
Bundesbank, other banks and insurance companies in connection with the  
currency reform of 1948.                                                

(2) Includes  liabilities of  the Federal Government  to repay  amounts received
from the Investitionshilfeabgabe, a special duty levied on income, the  
proceeds of which were to be used to promote investments.               

(Source for Tables 1 through 3: Bundesministerium der Finanzen, Ubersicht uber  
den Stand der Schuld der Bundesrepublik Deutschland am 31. Dezember 2001,       
Bundesanzeiger Nr. 44 of March 5, 2002, page 3867; internal documents of the    
Federal Ministry of Finance)                                                    

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II. GUARANTEES BY THE FEDERAL GOVERNMENT

                                                        [Enlarge/Download Table]

                                                                        PRINCIPAL AMOUNT   
                                                                           OUTSTANDING     
                                                                         AS PER JUNE 30,   
                                                                     ----------------------
DEBTOR OR PURPOSE OF DEBT                                            2000(1)(2)  2001(1)(2)
-------------------------------------------------------------------  ----------  ----------
                                                                        (EUR IN MILLIONS)  
                                                                                           

Export finance loans (including rescheduled loans).................     105,278     105,505
Untied loans; direct foreign investments by German companies;                              
  Loans of the European Investment Bank to non-EU borrowers........      24,985      25,006
Loans in connection with EU agricultural policy measures...........       6,647       6,647
Loans to domestic corporations and for projects in areas of                                
  Agriculture, fishing and housing construction....................      42,531      40,482
Contributions to international financing institutions..............      31,325      31,638
Co-Financing of bilateral projects of German financial co-operation         622         667
Successor agencies to Treuhandanstalt..............................       1,204       1,339
                                                                     ----------  ----------

Total Guaranteed Debt..............................................     212,592     211,644
                                                                     ==========  ==========


----------                                                                      
(1) No year end or quarterly figures are available.                             

(2) Calculated  based on  official figures provided  in Deutsche Mark  using the
fixed conversion rate of DM 1.95583 = EUR 1.                            

(Source: Bundesministerium der Finanzen, Finanzbericht 2002, page 328;          
Finanzbericht 2001, page 328)                                                   

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III.  LIABILITIES TO INTERNATIONAL FINANCIAL ORGANIZATIONS

    The Federal Republic is obligated to contribute to the capital subscriptions
and, in some cases, to the additional financing requirements of certain         
international organizations in which it participates. Such contributions are in 
many cases stated initially in 1944 U.S. dollars. One 1944 U.S. dollar is       
equivalent to one Special Drawing Right ("SDR"), a unit of value established by 
an amendment in July 1969 to the Articles of Agreement of the International     
Monetary Fund. From July 1, 1974 to December 31, 1980, the exchange rate        
between world currencies and the SDR was determined on the basis of a basket of 
16 currencies, including the U.S. dollar, which accounted for approximately one 
third of the value of the basket. Since January 1, 1981, the exchange rate      
between world currencies and the SDR has been determined on the basis of a      
basket of five currencies, including the U.S. dollar, which accounts since      
January 1, 1996 for 39% of the value of the basket. On December 30, 2001, SDR 1 
equaled DM 2.78655.                                                             

SUBSCRIPTIONS OR COMMITMENTS
 BY THE FEDERAL REPUBLIC
TO INTERNATIONAL FINANCIAL
ORGANIZATIONS AS PER DECEMBER 31, 2001

                                                        [Enlarge/Download Table]

                                                               SUBSCRIPTION OR                
                                                                COMMITMENT BY                 
                                                                 THE FEDERAL                  
NAME OF ORGANIZATION                                             REPUBLIC(1)    AMOUNT PAID IN
-------------------------------------------------------------  ---------------  --------------
                                                                       (U.S.$ MILLIONS)       
                                                                                              

International Monetary Fund(2)...............................         16,347.8        16,347.8
International Bank for Reconstruction and Development(3).....          8,734.0           542.9
International Development Association (IDA)(3)...............         12,065.6        11,007.0
International Finance Corporation (IFC)(3)...................            128.9           128.9
European Investment Bank(4)..................................         16,531.6           992.8
African Development Bank(3)..................................          1,147.0            97.0
African Development Fund(3)..................................          1,391.7         1,391.7
Asian Development Bank(3)....................................          1,994.3           147.2
Asian Development Fund(3)....................................          1,065.7         1,065.7
Inter-American Development Bank(3)...........................          1,913.7            82.3
Inter-American Investment Corporation(3).....................             13.0            13.0
Fund for Special Operations(3)...............................            229.6           229.6
International Fund for Agricultural Development (IFAD)(3)....            242.6           231.0
Caribbean Development Bank(3)................................             50.2            11.1
Special Development Fund of the Caribbean Development Bank(3)             51.0            51.0
European Bank for Reconstruction and Development (EBRD)(3)(5)          1,585.1           416.1


----------                                                                      
(1) Subscriptions  are in part committed in  $, SDR, ECU or DM. SDR,  ECU and DM
commitments are converted to $ at year end exchange rates, except that  
   certain SDR commitments are converted at the fixed conversion rate of SDR 1
=. $ 1.20635.                                                           

(2) Source:  computation  provided  by  Deutsche  Bundesbank.  Original  figures
expressed in SDR, converted to U.S. dollars at year end exchange rates. 

(3) Source:    computation   provided   by   Bundesministerium   der   Finanzen,
Bundesministerium fur wirtschaftliche Zusammenarbeit und Entwicklung.   

(4) Source: computation provided by European Investment Bank.                   

(5) Calculated  using the noon buying rate for cable  transfers in New York City
payable in euro on December 29, 2000, which was EUR 1 per $ 0.9388.     

G-35

Dates Referenced Herein   and   Documents Incorporated by Reference

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		5/1/02		122
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		4/24/02		113
		4/18/02		26
		4/7/02		3
		3/22/02		122
		3/21/02		108
		3/11/02		26
		3/6/02		113
		3/5/02		131		135
		3/1/02		5
		2/28/02		118
		2/12/02		108
		1/24/02		26
		1/17/02		105
		1/2/02		118
		1/1/02		107		126
		12/31/01		3		137
		12/30/01		137
		12/13/01		7
		11/1/01		126
		10/16/01		56
		9/30/01		129
		9/11/01		105
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		4/1/01		36
		1/1/01		107		126
		12/31/00		17		130
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		12/31/99		37		130
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		1/1/99		3		130
		12/31/98		107
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