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MuniFin wins Green bond of the year 2021 award by Environmental Finance

The Green bond of the year award was given to MuniFin by Environmental Finance, which is an online news and analysis service. Environmental Finance reports on sustainable investment, green finance and the people and companies active in the environmental markets.

 – We are delighted and honored to win this award, which is highly valued by market participants. This award is a testimony to our long-term commitment in the field of sustainability. Our ultimate goal is to promote Finland’s climate targets, where local governments play a key role, says Antti Kontio, Head of Funding and Sustainability at MuniFin.

This is not the first time MuniFin ‘s green bonds have received recognition from Environmental Finance. In 2018 MuniFin was awarded in the categories of Green Bond of the Year (SSA) and Biggest issuer (local authority).

MuniFin promotes the achievement of Finland’s climate targets and encourages its customers to achieve theirs by offering green finance for investments that have positive environmental effects. MuniFin is a pioneer in promoting environmentally sustainable development by being the first Finnish issuer of green bonds in 2016. The total amount of outstanding green bonds issued by MuniFin is currently approximately EUR 2 billion.

Green finance is offered to selected projects that promote the transition to low-carbon and climate resilient growth in seven categories. These include sustainable buildings, sustainable public transportation, water and wastewater management, renewable energy, energy efficiency, waste management and environmental management. MuniFin offers a margin discount of 0–10 basis points to approved green finance projects evaluated by an independent expert group.

Second opinion provider Cicero has awarded MuniFin’s Green Bond Framework with its second-best ‘Medium Green’ rating. The Framework has been drafted in accordance to the Green Bond Principles of the International Capital Markets Association (ICMA).

MuniFin has recently set a goal for 20% of its long-term customer finance portfolio to be labelled green and social finance by 2024, standing at around 9% at the end 2020.

Exceptionally strong investor demand

MuniFin issued the award winning green bond on Tuesday 6 October 2020. The 10-year EUR 500 million green bond was the fourth public benchmark green bond issued by MuniFin. Investor interest was exceptionally strong: the order book grew to EUR 3.4 billion, which is the largest green bond order book to date for MuniFin.

The amount of ESG focused investors also grew to 55%, which is the highest allocation to this investor group seen in MuniFin’s green bonds.

Issuer:Municipality Finance Plc (MuniFin)
Rating:Aa1 / AA+ (Moody’s/S&P – both stable)
Issue size:EUR 500mn (no-grow)
Payment date:14th October 2020 (T+6)
Maturity date:14th October 2030
Coupon:0.0%
Re-offer price:101.992%
Re-offer yield:-0.1970%
Re-offer vs. mid swaps:+2bps
Re-offer vs. benchmark:DBR 0% 08/2030 + 30.7bps
Lead managers:Danske Bank, NatWest Markets, Nomura, Nordea

Further information

Antti Kontio
Head of Funding and Sustainability, MuniFin
Tel. +358 500 3700285

Read more

MuniFin returned to the green bond market with a record 55% allocation to green investors

MuniFin’s sustainable bonds

Environmental Finance’s Bond Awards 2021

Written by Jenni Heikkilä

FundingGreen bondMuniFinSustainability

MuniFin wins SSA Structured Notes Issuer of the Year award by Mtn-i

MuniFin has been able to maintain its strong presence in the structured notes market despite the overall market shrinking considerably each year. With structured notes, MuniFin aims to serve a broader investor base.

– This award is a recognition of the long-term work we have done both internally and externally. For a decade, MuniFin has been a household name for both retail investors in Japan and institutional investors globally. Our target is to remain as an active issuer in structured notes and continue to serve investors in this product category, says Funding Manager Martin Svedholm.

In 2020, MuniFin issued a total of EUR2.4bn of structured notes, which was 20% of all long-term funding. Thanks to MuniFin’s brand and high credit rating, MuniFin is a well-known and appreciated issuer in the structured notes market and has regularly been recognised with several awards in different categories.

Read more about the MTN Awards

FundingMuniFin

The pandemic highlighted MuniFin’s role in 2020 – Annual Report and Sustainable Bonds Impact Report published

MuniFin’s CEO Esa Kallio and Executive Vice President Aku Dunderfelt discuss the year 2020 at MuniFin.

Overall growth and very strong investor interest in social finance

In 2020, the demand for funding among MuniFin customers increased substantially. Our finance for new projects totalled EUR 4,699 million, increasing by as much as 52% from 2019.

The COVID-19 pandemic prompted us to quickly adapt to remote work, but we were able to serve our customers without interruptions by creating new customer service channels and expanding our digital services.

“The economic reports by our chief economist and the training on our digital services have been highly popular”, Kallio notes.

The social finance we launched in early 2020 received a highly positive reception, and we granted a total of 589 million euros across 27 projects. We also issued the first Nordic social bond in the SSA category for international investors. The social bond had a EUR 500 million issue size and was overbooked by nearly four times, signalling overwhelming demand for this product.

Even though capital markets were unstable, particularly in the spring, our own funding continued without interruption throughout 2020. Our long-term funding rose to EUR 11 billion.

“The success of our benchmark bonds during this period of uncertainty shows that we have a successful funding strategy and good reputation in the international capital market. The year 2020 further highlighted MuniFin’s core mandate”, says Kallio happily.

In 2020, we continued to reform our organisation and operating practices. We will continue to further develop our operations and digital services.

“In all we do, we aim to provide even better and even more efficient service for our customers”, Kallio concludes.


MuniFin’s Annual Report 2020 is available here.Download
MuniFin’s Sustainable Bonds Impact Report is available here.Download

Further information:

Heidi Penttinen, Communications Specialist, Tel. +358 45 2139 3229

EconomyFundingMuniFinSustainability

MuniFin issues the first Euro benchmark of the year

The mandate for the transaction was released at noon London time on Monday 22 February. The books opened the following morning. The orderbook grew quickly, which resulted MuniFin to tighten the final pricing.

The EUR 1 billion 10-year benchmark was priced at 13.15 pm London time with a re-offer spread of MS-3bps, offering a re-offer yield of -0.021% and a re-offer price of 100.210%. This is equivalent to a spread of 28.7bps over the DBR 0.00% due 15 February 2031.

106 investors participated in the transaction with 89% allocation to European investors and 52% allocation to bank treasuries, 24% to asset managers and 23% to central banks and other official institutions.

“We are delighted to see such a strong investor support for our first EUR benchmark this year. The demand has once again been overwhelming and we can only thank the investors for this outcome. We remain committed to maintain a presence in the EUR market and this new 10y line is a welcomed addition to our existing curve”, says Joakim Holmström, the Head of Capital Markets and Sustainability at MuniFin.

In 2021 MuniFin forecasts to issue EUR 10-11 billion of long-term funding. After this EUR 1 billion benchmark MuniFin has reached 36% of the total target.

Issuer: Municipality Finance Plc (“MuniFin”)
Rating: Aa1 / AA+ (Moody’s/S&P – both stable)
Issuer Size:EUR 1bn
Payment Date: 2nd March 2021 (T+5)
Maturity Date:2nd March 2031
Coupon:0.00%
Re-offer Price:100.210%
Re-offer Yield:-0.021 % 
Re-offer vs. Mid Swaps:-3bps
Re-offer vs. Benchmark:DBR 0.00% due 15 February 2031 +28.7bp
Lead Managers:Barclays / Citi / HSBC / Swedbank

Comments from the bookrunners

 “What a great deal – MuniFin built a large, high quality orderbook, 3.8x oversubscribed, in what has been a very competitive market recently.  The success is a testament to how well the issuer has presented itself to the EUR market over recent years, their rarity and excellent support from the global investor base.”  

Lee Cumbes, Head of Public Sector, Barclays

“A stellar result for MuniFin, garnering their second largest orderbook to date for their first Euro benchmark of 2021. The issuer’s ability to move quickly following the sell-off in rates enabled them to capture the attention of a broad range of high-quality investors. Congratulations to the MuniFin team for the strong outcome, Citi is delighted to have been involved in the transaction.”

Ebba Wexler, Managing Director, Public Sector DCM, Citi

“MuniFin was able to capitalize on constructive market conditions to execute its first EUR benchmark transaction of 2021. Today’s orderbook highlights the strong following MuniFin receives from the global investor base, with the deal more than 3x oversubscribed, allowing pricing to move 2bps through execution and to price flat to fair value. HSBC is proud to have helped lead this transaction. Congratulations to the MuniFin team.”

Asif Sherani, Head of DCM Syndicate EMEA, HSBC

“Great to see MuniFin enter the Euro market in 2021 with such a strong, well received, transaction. A smooth process, with a well oversubscribed book, enabled MuniFin to price with zero NIC, despite the recent volatility seen in the market. A true testament to the depth and commitment of the MuniFin investor base. Swedbank is very proud to have been part of this transaction and would like to congratulate the entire MuniFin team on the successful deal.”

Linda Lindblad, Head of SSA Origination, Swedbank 

Further information

Joakim Holmström
Executive Vice President, Capital Markets and Sustainability, MuniFin
Tel. +358 50 4443 638

Antti Kontio
Head of Funding and Sustainability, MuniFin
Tel. +358 500 3700 285

FundingMuniFin

MuniFin opens funding year by issuing the largest USD Benchmark since 2013

MuniFin made a strong return to the 5-year sector issuing its largest and tightest USD benchmark since 2013. The last benchmark in that tenor was issued in March 2019 and the last USD benchmark was issued in June 2020.

The mandate announcement was released on Monday 11 January 2021 at 13:10 CET with IPTs of MS+10bps area. Despite the busy time of the year, MuniFin was able to find an open issuance window and quickly gather an impressive orderbook (USD 3.1bn) of the highest quality.

The benchmark was finally priced at MS+8bps, with central banks and official institutions taking over 40% of the final allocations. Geographically, EMEA took the bulk with 79% of the allocations, supplemented by Americas (16%) and Asia (5%).

In 2021 MuniFin forecasts to issue EUR 10-11 billion of long-term funding, making the USD 1.5 billion benchmark a great start for the year.

Issuer:Municipality Finance Plc (“MuniFin”)
Ratings:Aa1 / AA+ (both Stable) by Moody’s / S&P
Format:RegS/144A
Coupon:0,625% Fixed S/A, 30/360, long first coupon
Size:USD 1.5 billion
Pricing Date:12th January 2021
Payment Date:19th January 2021 (T+5)
Maturity Date:20th March 2026
Reoffer Spread:MS + 8bps  | CT5 + 17.78bps
Joint BookrunnersBofA / GSI / JPM / TD

Comments from the bookrunners

“A great result for MuniFin’s first benchmark of the year in a very busy market. The issuer was able to capitalise on exceptionally strong demand from investors, pricing with minimal concession to their outstanding curve. A true testament to the high esteem they are held in across the SSA investor universe.”

Adrien de Naurois, Managing Director, Head of SSA DCM & EMEA IG Syndicate, BofA Securities.

“MuniFin reacted swiftly to the receptive primary market environment and claimed its execution window ahead of a building January pipeline. They were rewarded with increased transaction size and the tightest spread versus mid-swaps as well as USTs that they have achieved for a 5-year benchmark to-date. An impressive outcome for the Finnish agency.”

Angelica-Maria Strolz, Executive Director, J. P. Morgan.

“Fantastic outcome for the issuer who was able to extend their curve at a very attractive spread with a minimal spread to their outstanding 3-year benchmark while printing the larger size.”

Dorothee Amar, Executive Director, SSA, Goldman Sachs International.

“Congratulations to the MuniFin team on the successful execution of their first USD benchmark of 2021. They once again confirmed their flawless execution capabilities in the USD market, even with a busy SSA backdrop. The orderbook in excess of USD 3.1bn clearly shows that global investors continue to savour the opportunity to buy MuniFin USD bonds.”

Laura Quinn, Managing Director, Head of Origination & Syndication, TD Securities, Dublin.

Further information

Joakim Holmströn
Executive Vice President, Capital Markets, MuniFin
Tel. +358 50 4443 638

Antti Kontio
Head of Funding and Sustainability, MuniFin
Tel. +358 500 3700285

FundingMuniFin

MuniFin wins Best Uridashi Bond Issuer and Best Structured Note Issuer Awards

MuniFin has been an active and valued issuer in the Uridashi market since 1990s. Due to their high credit rating and brand MuniFin has become a household name in the market. The team constantly meets with the Japanese Uridashi dealers.

– Due to active communication with the dealers we are able to better understand market trends. In addition, we have invested in risk modelling in order to accommodate these products. Our target is to remain as an active issuer in the Uridashi market, Funding Manager Karoliina Kajova says.

In 2020 Uridashi volumes for MuniFin reached EUR1.2bn.

According to CMD Portal MuniFin has been recognised as the Best Uridashi and Best Structured Note Issuer, both in terms of number and diversity of deals. MuniFin managed to grow the number of structured notes issued despite the challenging market conditions due to COVID. MuniFin has also been able to maintain its strong presence in the market despite the overall structured market shrinking considerably each year.

CMD Portal connects issuers with dealers and investors of fixed income instruments globally and provides transparency through trade and flow reports to the market.

FundingMuniFin

MuniFin sets the long-term funding target for 2021: EUR 10-11 billion

Our commitment to sustainability will continue to remain strong. We are planning to issue in both social and green format in 2021. Sizes will depend on the underlying asset development, but minimum sizes are EUR 500 million equivalent. In addition, we are closely looking at the developments on EU Taxonomy and Green Bond Standard.

In 2020 MuniFin issued EUR 11.0 billion of new long-term funding. The amount is larger than originally planned, mainly due to the COVID-19 pandemic, which has led to larger-than planned growth in the lending activities. Market access in benchmark markets and private placements remained strong throughout the year. Approximately 52% was issued in strategic public markets in EUR and USD. This included four new EUR benchmarks between 5 and 15 years and one new USD benchmark in 3 years. In terms of sustainable bonds, MuniFin issued the first Nordic SSA Social bond in September and a new Green bond in October.

Top 4 currencies in 2020 have been EUR (64%), USD (16%), JPY (11%) and NOK (4%). These currencies account for 95% of the new funding issued in 2020.

Further information

Antti Kontio
Head of Funding, MuniFin
Tel. +358 500 3700285

FundingMuniFin

MuniFin returned to Green bond market with a record 55% allocation to Green investors

Mandate of the transaction was released on Monday afternoon 5 October and books were opened on Tuesday morning 6 October at 10:00 am Helsinki time. The first update of the transaction was sent at 11:30am, when the orderbook had grown to a record EUR 2.9 billion and at the same time the spread was set at mid-swaps +2 basis points, 3 basis points tighter from starting level. The final orderbook grew to EUR 3.4 billion, which is one of the largest benchmark orderbooks MuniFin has seen and the largest for MuniFin’s Green bonds. Coupon of the new Green bond is 0%, yield -0.197% and joint lead managers were Danske Bank, NatWest Markets, Nomura and Nordea.

104 investors participated in the transaction and the majority was sold to European institutional investors. Germany, Austria and Switzerland was the largest geographical area with 33% of allocations followed by Nordics 21%, Benelux 10%, Southern Europe 10%, France 9%, Americas 8% and other 10%. Central banks and official institutions bought 33% of the transaction, asset managers 30%, bank treasuries 28% and insurance/pension funds 9%.The amount of ESG focused investors grew to 55%, which is the highest allocation to this investor group seen in MuniFin’s Green bonds.

MuniFin’s Green bonds Framework divides Green finance into seven categories, sustainable buildings and public transportation being the most important ones.

“We are extremely pleased with the outcome. Almost 7 times oversubscribed orderbook and a meaningful greenium of around 2 basis points shows that going green really pays off. 2020 has been a very exceptional year – but we are very happy that we’ve been able to continue our presence in the Green bond market together with our inaugural Social bond just a few weeks ago”, says Antti Kontio, Head of Funding at MuniFin.

Issuer:Municipality Finance Plc (MuniFin)
Rating:Aa1 / AA+ (Moody’s/S&P – both stable)
Issue size:EUR 500mn (no-grow)
Payment date:14th October 2020 (T+6)
Maturity date:14th October 2030
Coupon:0.0%
Re-offer price:101.992%
Re-offer yield:-0.1970%
Re-offer vs. mid swaps:+2bps
Re-offer vs. benchmark:DBR 0% 08/2030 + 30.7bps
Lead managers:Danske Bank, NatWest Markets, Nomura, Nordea
Press Release MuniFin 10/6/2020: EUR 500 million 0% Green Bond due 14th October 2030Download

Further information:

Antti Kontio
Head of Funding, MuniFin
Tel. +358 500 3700285

FundingGreen bondMuniFinSustainability

MuniFin celebrates the issuing of Finland’s first social bond – rings opening bell at Nasdaq Helsinki

In addition to being the first social bond issued by a Finnish entity, MuniFin’s debut social bond also claims the title of the first Nordic social bond in the SSA category. The 15-year EUR 500 million product was met with overwhelming investor demand, and the bond, issued on September 3rd, was overbooked by nearly four times. 

With its introduction of the social finance product, MuniFin aims to encourage investments that have a notably strong impact and bring about wide-ranging social benefits. The first projects to receive financing within the MuniFin Social Bonds Framework were announced in June. These projects involve schools, hospitals and healthcare centers as well as housing for people with special needs. 

Social bonds expand MuniFin’s range of sustainable finance products. The company has been an active green bond issuer for four years and it is now expanding the offering into social bonds. 

Click here to watch a recording of the opening ceremony at Nasdaq Helsinki (Presentations in Finnish)

 Read more:  
 MuniFin leads the way by issuing the first Nordic SSA Social Bond 

Nasdaq Helsinki welcomes Municipality Finance as its First Social Bond Issuer 

FundingMuniFinSocial bondSustainability

Nasdaq Helsinki welcomes Municipality Finance as its First Social Bond Issuer

On 10 September 2020, Nasdaq announced that Municipality Finance Plc has listed its inaugural social bond on the Nasdaq Sustainable Debt Market at Nasdaq Helsinki. The bond notional is EUR 500 million with a maturity of 15 years, explicitly guaranteed by the Municipal Guarantee Board. MuniFin’s issuance is the first social bond listed on Nasdaq Helsinki and the first social bond issued by an SSA (Sovereigns, Supranationals, Agencies) issuer in the Nordic countries.

MuniFin has been an active green bond issuer for four years and is now expanding the offering into social bonds. The proceeds of the social bond issue will finance projects that fall into one of the three categories of social housing, welfare and education and they promote equality, sense of community, wellbeing and vitality of regions and/or municipalities. The first financed projects include schools, hospitals and health care centres and housing for people with special needs.

– We are extremely proud to be in the forefront of Nordic and European sustainable finance. Even if all of our financing is aimed at building and developing the Nordic welfare state, social finance is a flagship product that highlights the wide-ranging effects that municipal and non-profit housing investments have both on individuals and the society as a whole, said Esa Kallio, President and CEO at MuniFin.

– The investor response for our inaugural social bond was overwhelmingly positive. This is a strong testimony that the financial markets want to actively transform societies and make them more sustainable.

– With the help of issuers such as MuniFin, we have in recent years seen Nasdaq develop into an important hub for sustainable investments in Europe with more than 230 bonds listed on Nasdaq´s Sustainable Debt Market. Following many international firsts, such the first green corporate bond by Vasakronan and first city bond issued by Gothenburg, Sweden, we are especially happy to see continued leadership coming from the Nordic region, said Ann-Charlotte Eliasson, Head of European Debt Listings and Sustainable Bonds at Nasdaq.

– We are excited to welcome MuniFin, a Finnish pioneer in sustainable finance, as our first social bond issuer in Finland, said Henrik Husman, President of Nasdaq Helsinki.

– MuniFin was also our first green bond issuer in 2018, and we have now five sustainable bonds listed on Nasdaq Helsinki. We look forward to seeing additional issuers following this trend.

Source: Nasdaq Helsinki

FundingMuniFinSocial bondSustainability