“The increased funding need is mainly driven by a combination of expected larger customer financing volumes and long-term funding redemptions. We have issued approximately EUR 7.0 billion so far, thus we are well positioned for the second part of the year”, says Antti Kontio, Head of Funding and Sustainability at MuniFin.
Antti Kontio
Head of Funding and Sustainability
+358 50 3700 285
Yesterday, MuniFin issued its first USD benchmark of the year. The USD 1 billion benchmark is due 15 December 2027 and pays a semi-annual coupon of 4.125%. In time of pricing, the spread was set at SOFR MS +45bps.
“We were anticipating a high USD SSA supply due to the central bank meetings next week, so we decided to announce the mandate early on Monday morning to secure a favourable issuance window. This paid off: the books opened on Tuesday morning with quality indications of interest already covering the whole trade”, says Analyst Lari Toppinen from MuniFin Funding team.
Later that afternoon, MuniFin was able to close the books in excess of USD 2.6 billion with a very high-quality orderbook. Central banks and other official institutions took 70.6% of the bonds, followed by banks at 25.6%. Asset Managers took 3.6% and the rest went to corporates.
“This is a stellar result and a demonstration of our solid investor engagement. We couldn’t be happier”, Toppinen continues.
Geographically, most of the investors came from Europe (excluding Nordics), followed by Americas at 27.6%, Asia Pacific at 19%, Africa and Middle East at 15% and Nordics at 7%.
With this transaction, MuniFin has completed over two thirds of its long-term funding target for 2023.
| Issuer: | Municipality Finance Plc (“MuniFin”) |
| Ratings: | Aa1 / AA+ (both Stable) by Moody’s / S&P |
| Format: | RegS/144A |
| Size: | USD 1 billion |
| Pricing Date: | 6th June 2023 |
| Payment Date: | 13th June 2023 |
| Maturity Date: | 15th December 2027 |
| Coupon: | 4.125%, Fixed, semi-annual, 30/360 |
| Reoffer Spread: | SOFR MS + 45 bps | CT5 + 28.3bps |
| Joint Bookrunners: | Barclays / BMO / Daiwa / Nomura |
“Congratulations to the MuniFin team for an outstanding outcome for its first USD benchmark transaction in 2023, a highly successful new short 5-year. Following the volatility connected to the US Debt Ceiling topic, MuniFin was quick to seize a stable execution window, and despite a wave of USD issuance from SSA peers, generated a well-diversified final orderbook that was more than 2.5x oversubscribed. Furthermore, MuniFin was able to achieve 2bps of tightening to price with minimal new issue concession, which acts as a testament to MuniFin’s strong following from its global investor base. Barclays is honoured to have supported this transaction.” Alex Paterson, Head of SSA DCM, Barclays
“Congratulations to the MuniFin team for a very successful USD outing in what has been a very busy primary market following the resolution of the US Debt Ceiling over the w-end. The transaction was largely oversubscribed and pricing was flat to fair value. Around 70 investors participated in the transaction which is testament to the strong sponsorship that MuniFin enjoys in the USD market.” Massimo Antonelli, Managing Director, BMO Capital Markets
“Congratulations to the MuniFin team on an outstanding result. The issuer successfully navigated a busy primary USD SSA market as well as an adverse movement in swap spreads, whilst extending their USD Benchmark curve to a new December 2027 maturity. The quality and level of demand fully warranted a 2bps price tightening and is further testament to the high regard in which MuniFin is held.” – Jez Walsh, Head of Syndicate, Daiwa Capital Markets Europe
“It has been almost a year since Municipality Finance last issued a USD benchmark outing and they did not disappoint! The new Dec-2027 at more than 2.5x over subscribed, is a testament to the credits recognition, global appeal and haven status. With a granular orderbook and diversification across both geography and investor type, it reiterates the persistent investor work undergone by the whole Funding Team, in positioning Municipality Finance as top tier name. Congratulations!” – Mark Yeomans, Managing Director, Public Sector DCM, Nomura.
Joakim Holmström – Executive Vice President, Capital Markets and Sustainability
+358 50 4443 638
Antti Kontio – Head of Funding and Sustainability
+358 50 3700 285
Karoliina Kajova – Senior Manager, Funding
+358 50 5767 707
Lari Toppinen – Analyst, Funding
+358 50 4079 300
Aaro Koski – Analyst, Funding
+358 45 138 7465
Last week, MuniFin decided to return to the CHF market by issuing its first CHF bond since 2017. The latest tap was made in 2020. The new 5-year fixed-rate bond pays an annual coupon of 1.6250%.
”Congratulations to the MuniFin team on successfully launching their first new CHF line since 2017. Seizing the right window allowed MuniFin to take advantage of favorable market conditions to raise a new CHF 150 million 5y line at SARON MS-16bps, the tightest level achieved by a foreign issuers YTD in 5y”, said Lead Manager Salma Guerich, DCM SSA from BNP Paribas (Suisse).
MuniFin has a long history issuing in the Swiss market and now it was a good time for a comeback.
“Both pricing and investor demand lined up so that we were able to return to the market again after a pause. We are grateful for the trust our investors place in us”, says Senior Manager Karoliina Kajova from MuniFin’s Funding and Sustainability team.
The order book was made up of Swiss investors. The largest share (50%) went to banks, followed by Asset Managers (34%) and insurance and pension funds (15%). The rest (1%) went to central banks and other official institutions.
”The success of this transaction is a strong testimony to MuniFin’s diverse Swiss investor following which was also affirmed in the tap done in 2020”, Guerich continued.
With this transaction, MuniFin has completed over 60% of its long-term funding target for the year.
| Issuer: | Municipality Finance PLC (Kuntarahoitus Oyj) (BBG Ticker: KUNTA) |
| Issuer ratings: | Aa1 (stable) / AA+ (stable) (M/S) |
| Issue size: | CHF 150m |
| Life: | 5yr |
| Trade date: | 17 May 2023 |
| Payment date: | 16 June.2023 |
| Maturity date: | 16 June2028 |
| Coupon: | 1.6250% Fixed, Annual, (30/360) |
| Spread / Yield: | SARON MS-16bps / YTM 1.5575% |
| Issue price: | 100.322 % |
| Documentation: | Off the Issuer’s EUR 45bn EMTN Programme |
| Listing: | SIX Swiss Exchange |
| ISIN: | CH1244321779 |
| Lead Manager: | BNP Paribas (Suisse) SA |
Joakim Holmström – Executive Vice President, Capital Markets and Sustainability
+358 50 4443 638
Antti Kontio – Head of Funding and Sustainability
+358 50 3700 285
Karoliina Kajova – Senior Manager, Funding
+358 50 5767 707
Lari Toppinen – Analyst, Funding
+358 50 4079 300
Aaro Koski – Analyst, Funding
+358 45 138 7465
The mandate for the EUR 1 billion transaction was announced on Tuesday 18 February and the books opened the following morning with initial price guidance at midswaps+5bps area. In just two hours, the orderbook stood at EUR 1.05 billion and price guidance remained unchanged.
Finally, the orderbook was closed in excess of 1.8 billion. The new bond carries a coupon of 3.125%, and was priced at mid-swaps+5bps, equivalent to a spread of +71.8bps over the DBR 0% due 15th February 2030.
“Due to the uncertain market situation lately, many SSA issuers have postponed their transactions resulting in busy primary markets. Despite the heavy supply, we were able to find a favourable window and were satisfied with the outcome. It was also nice to add a new liquid pricing point into our EUR curve”, says Antti Kontio, Head of Funding and Sustainability at MuniFin.
The final orderbook was of very high quality as banks took the bulk (56%), followed by central banks and official institutions (36%,) Asset Managers (7%) and pension funds and insurers (1%).
Geographically, the transaction attracted a diverse group of investors: Germany, Austria and Switzerland took the largest share (28%), followed by Asia (20%) and UK (19%), Benelux (12%), the Nordics (9%), France (7%) and the rest of the world (5%).
With this transaction, MuniFin has completed nearly 60% of its long-term funding target for the year.
Read the press release:
| Issuer | Municipality Finance Plc (“MuniFin”) |
| Issue Amount | EUR 1 billion |
| Issuer Rating | Aa1 /AA+ (Moody’s / S&P) (all stable) |
| Pricing Date | 19 April 2023 |
| Settlement Date | 26 April 2023 (T+5) |
| Maturity Date | 29 July 2030 |
| Re-offer Price /Yield | 99.722% / 3.170% |
| Annual Coupon | 3.125% (short first coupon) |
| Re-offer Spread | Mid-swaps +5bps |
| Spread vs Benchmark | DBR 0% Due 15th February 2030 +71.8bps |
| Listing | Nasdaq Helsinki Stock Exchange (Regulated market) |
| Documentation | Issuer’s Debt Issuance Programme |
| ISIN | XS2615680399 |
| Joint Lead Managers | Citi, Deutsche Bank, Goldman Sachs, JP Morgan |
“Many congratulations to the MuniFin team on such a successful outcome for their third euro transaction of their 2023 funding program. Despite a volatile rates backdrop, MuniFin were able to price their longest euro benchmark of the year on the back of an extremely high quality and oversubscribed order book. Citi is delighted to have been involved!”
Ebba Wexler, Managing Director, Public Sector DCM, Citi
“Congratulations to the MuniFin team on their third EUR benchmark outing of 2023. The new EUR 1bn long 7-year benchmark garnered a quality orderbook amidst a busy primary market for SSA issuers. MuniFin’s agility in adapting to market windows once again enabled them to achieve attractive cost of funding for their activities which support the mission of building a better and more sustainable future for its clients. Deutsche Bank is pleased to have been involved in this transaction.”
Katrin Wehle, Managing Director, Head of SSA DCM Origination, Deutsche Bank
“Many congratulations to the MuniFin team on successfully accessing the EUR market for the third time in a row this year. A strong return to the market following a period of broader volatility, capturing interest from a wide range of good quality investors while achieving the price and volume targets. The Goldman Sachs team was extremely delighted to be part of this transaction.”
Edward Markham, Managing Director, Goldman Sachs
” Congratulations to the MuniFin team on printing a solid €1bn transaction in 7-year part of the curve, being the first Nordic agency to access the tenor this year. The orderbook size of €1.8bn+ is a testament to investor confidence in MuniFin’s name, as it stands as the issuer’s largest EUR 7-year orderbook to date. We are delighted to be involved in this landmark transaction.”
Matthieu Batard, Head of SSA Syndicate, J.P. Morgan
Joakim Holmström – Executive Vice President, Capital Markets and Sustainability
+358 50 4443 638
Antti Kontio – Head of Funding and Sustainability
+358 50 3700 285
Karoliina Kajova – Senior Manager, Funding
+358 50 5767 707
Lari Toppinen – Analyst, Funding
+358 50 4079 300
Aaro Koski – Analyst, Funding
+358 45 138 7465
The awarded EUR 1 billion green bond is the largest EUR green bond issued by MuniFin and the largest EUR green bond of all time in the Nordic SSA market. The transaction received a strong reception with final order books over 2-times oversubscribed. The bond was MuniFin’s inaugural transaction under its updated Green Bond Framework, dated August 2022.
CMD awarded its TopDeal accolade to MuniFin’s issuance due to its record-breaking size, strong investor demand, and the issuer’s unwavering commitment to sustainability. The bond issuance highlights MuniFin’s ability to tap into the growing interest in ESG investments and its dedication to financing projects that benefit the environment and society, CMD Portal states in its release.
“We are extremely happy to receive this recognition from CMD Portal and of course happy with the outcome of the green bond issuance. It is encouraging to see how the demand for sustainable bonds keeps on growing”, says Antti Kontio, Head of Funding and Sustainabilityat MuniFin.
A TopDeal is awarded to a deal that stands out by achieving excellent execution or one that pushes the boundaries of debt capital markets by being a first or reopening a market. At the end of each quarter CMD Portal awards six deals with the TopDeal accolade.
MuniFin has offered its customers green finance for sustainable investments since 2016. Funding for green projects is sourced by issuing green bonds. For investors, MuniFin’s green bonds offer a way to finance positive impacts through carefully selected projects in buildings, transportation, renewable energy and water and wastewater management categories.
MuniFin issues a record-breaking EUR 1 billion green bond
Joakim Holmström – Executive Vice President, Capital Markets and Sustainability
+358 50 4443 638
Antti Kontio – Head of Funding and Sustainability
+358 50 3700 285
Karoliina Kajova – Senior Manager, Funding
+358 50 5767 707
Lari Toppinen – Analyst, Funding
+358 50 4079 300
Aaro Koski – Analyst, Funding
+358 45 138 7465
Watch the video:
Finland’s geopolitical and geoeconomical position upended in early 2022 as Russia’s war of aggression against Ukraine intensified the economic and social uncertainties in Europe. This turmoil made our role in securing Finland’s security of supply grow even stronger than before.
In 2022, the amount of finance we granted grew by 19% compared to the previous year. Our new long-term financing totalled EUR 4.4 billion. As expected, the net operating profit excluding unrealised fair value changes decreased from the previous year, as a result of a change we made in credit terms for the customers’ benefit.
The demand for our sustainable finance products was strong in 2022, especially so for green finance. Combined, the green and social projects have received around five billion euros in financing.
The mandate was announced on Tuesday 14 February and the books were opened the following morning at mid-swaps -1bps area. Demand for MuniFin’s first green issuance this year was strong from the outset and the books were finally closed just 2,5 hours later in excess of EUR 2.2 billion. The transaction pays an annual coupon of 3.00% and was priced at mid-swaps -3bps.
Nearly 80% of the high-quality orderbook was allocated to ESG investors. Otherwise, the allocation was well diversified as 46% went to banks and 31% to Asset Managers. Geographically, Nordics took 37% followed by DACH at 29% and Benelux at 13%.
“This transaction marks already the 8th green bond issuance in MuniFin’s history, and it is encouraging to see how the demand for sustainable bonds keeps on growing. We are extremely happy with the outcome and the strong support from the ESG investor community. As a new member of the MuniFin Funding and Sustainability team, this was also personally exciting for me as this was my first large issuance to be involved in since I joined MuniFin”, says Analyst Aaro Koski.
With this record-breaking green bond MuniFin has issued approximately 40% of this year’s EUR 8-9 billion long-term funding target.
Read the press release:
| Issuer: | Municipality Finance Plc (“MuniFin”) |
| Ratings: | Aa1 / AA+ (both Stable) by Moody’s / S&P |
| Size: | EUR 1,000,000,000 |
| Coupon: | 3% annual, Actual/Actual (ICMA), following unadjusted |
| Pricing Date: | 15th February 2023 |
| Payment Date: | 22nd February 2023 |
| Maturity Date: | 25th September 2028 |
| Mid Swap Spread: | -3bps |
| Joint Bookrunners: | CACIB / Danske Bank / HSBC / NatWest Markets |
“Credit Agricole CIB is proud to have assisted MuniFin with its successful return to the green bond market. MuniFin not only achieved an outstanding result in terms of tight pricing and diversified high-quality investor demand, it also raised the bar on the green bond issue size of EUR 1 billion – the largest EUR green bond in the Nordic SSA market to date. Credit Agricole CIB would like to congratulate the MuniFin team for its longstanding commitment to Sustainability and for continuously supporting the development within the Nordic region and on a global scale.”
Lawrence Duquesne-Garner, Managing Director, SSA Origination, Credit Agricole CIB
“This is a fantastic outcome for Munifin and a testament of the quality in their recently updated green bond framework. We are pleased to see a Munifin being able to attract such a strong order book with pricing through their EUR curve despite an uncertain market backdrop. Danske Bank is proud to have supported Munifin with the framework update and as a lead manager on the first green bond issue thereafter.”
Gustav Landström, Head of SSA Origination at Danske Bank
“A stellar result for MuniFin, capitalizing on constructive market conditions to print its largest ever green benchmark. Today’s deal highlights the strong following MuniFin receives from the global investor base as well underlining MuniFin’s strength as a green issuer. The deal was 2x oversubscribed, allowing pricing to move 2bps through execution and price with a minimal new issue concession. HSBC is proud to have helped lead this transaction. Congratulations to the MuniFin team.”
Sabrina Khalfoune, SSA DCM, HSBC
“With this transaction, MuniFin have issued their largest green benchmark to date. This represents an ongoing commitment from MuniFin to create large liquid benchmarks in Green format and also highlights an increased engagement from the investor community. The latter point is evidenced by a 2x oversubscribed book and issuance at fair value. ESG is at the core of NatWest’s business model and we are incredibly proud to have been involved in this issuance.”
Damien Carde, Head of FBG DCM, NatWest Markets
MuniFin has offered its customers green finance for sustainable investments since 2016. Funding for green projects is sourced by issuing green bonds. For investors, MuniFin’s green bonds offer a way to finance positive impacts through carefully selected projects in buildings, transportation, renewable energy and water and waste water management categories.
Joakim Holmström – Executive Vice President, Capital Markets and Sustainability
+358 50 4443 638
Antti Kontio – Head of Funding and Sustainability
+358 50 3700 285
Karoliina Kajova – Senior Manager, Funding
+358 50 5767 707
Lari Toppinen – Analyst, Funding
+358 50 4079 300
Aaro Koski – Analyst, Funding
+358 45 138 7465
Comparison figures deriving from the income statement and figures describing the change during the financial year are based on figures reported for the corresponding period in 2021. Comparison figures deriving from the balance sheet and other cross-sectional items are based on the figures of 31 December 2021 unless otherwise stated.
| Jan–Dec 2022 | Jan–Dec 2021 | Change, % | |
| Net operating profit excluding unrealised fair value changes (EUR million)* | 170 | 213 | -20.0 |
| Net operating profit (EUR million)* | 215 | 240 | -10.3 |
| Net interest income (EUR million)* | 241 | 280 | -13.9 |
| New long-term customer financing (EUR million)* | 4,375 | 3,671 | 19.2 |
| New long-term funding (EUR million)* | 8,827 | 9,395 | -6.0 |
| 31 Dec 2022 | 31 Dec 2021 | Change, % | |
| Long-term customer financing (EUR million)* | 29,144 | 29,214 | -0.2 |
| Balance sheet total (EUR million) | 47,736 | 46,360 | 3.0 |
| CET1 capital (EUR million) | 1,482 | 1,408 | 5.2 |
| Tier 1 capital (EUR million) | 1,482 | 1,756 | -15.6 |
| Total own funds (EUR million) | 1,482 | 1,756 | -15.6 |
| CET1 capital ratio, % | 97.6 | 95.0 | 2.7 |
| Tier 1 capital ratio, % | 97.6 | 118.4 | -17.6 |
| Total capital ratio, % | 97.6 | 118.4 | -17.6 |
| Leverage ratio, % | 11.6 | 12.8 | -9.5 |
| Return on equity (ROE), %* | 9.9 | 10.7 | -7.9 |
| Cost-to-income ratio* | 0.2 | 0.2 | 10.1 |
| Personnel | 175 | 164 | 6.7 |
* Alternative performance measure.
All figures presented in this Financial Statements Bulletin are those of MuniFin Group, unless otherwise stated.
Finland’s geopolitical and geoeconomical position upended in early 2022. Russia’s war of aggression against Ukraine exacerbated inflation and hampered the availability of raw materials. Russian gas cut-offs plunged Europe into an energy crisis and sent energy prices soaring. This made collateral requirements in the electricity markets spiral, causing energy companies to face a liquidity crunch.
In October, the European Commission approved an aid scheme that allows MuniFin to finance Finnish municipality-owned energy companies under the EU State Aid Temporary Crisis Framework. This subsidised loan and guarantee scheme was designed to help cover the liquidity needs arising from the increased collateral requirements in the electricity derivatives market. In December, the scheme was extended to provide municipal energy companies’ other financing needs arising from potential crisis situations. Offering financing for the energy sector is our contribution to safeguarding the energy sector’s performance and Finland’s security of supply.
In 2022, the demand for our financing was slightly lower than expected. In the municipal sector, customers had less demand for finance because their income was higher than expected due to various non-recurring items, such as the central government’s pandemic recovery measures and funds they acquired from the sale of their health and social services properties before the reform took effect. Tax cuts related to the reform will not be fully implemented until 2024, which also affected the demand for financing. In the housing sector, the materials shortage and the rising cost of raw materials slowed down construction projects. The volatile market situation also resulted in longer processing times for interest subsidy loan decisions.
Hospital districts and joint municipal authorities sought funding more actively than we had expected, wanting to dispel uncertainty around the financing of their long-term investments and secure necessary funding on time before the health and social services reform entered into force.
The Act on the Municipal Guarantee Board was amended in the spring of 2022, allowing MuniFin also to finance new investments by the wellbeing services counties. However, the Municipal Guarantee Board set a limit to the amount of finance MuniFin can grant to wellbeing services counties, as wellbeing services counties are not members of the Municipal Guarantee Board and are not liable for the guarantees for MuniFin’s funding. In 2023, we can finance the long-term investments of wellbeing services counties by EUR 400 million and grant them up to EUR 900 million in short-term financing. Our estimate is that wellbeing services counties will have considerably larger financing needs than the limit allocated to us. The limit set by the Municipal Guarantee Board only applies to new financing granted by MuniFin.
The economic and geopolitical upheaval of 2022 has not had immediate, significant effects on MuniFin’s profitability. As expected, our result was lower in 2022 than in 2021 mostly due to planned changes in pricing, but also due to some unexpected expenses. For example, our contribution to the Single Resolution Fund in 2022 shot up by almost 40% from the previous year even though our risk position remained unchanged. On the other hand, rising interest rates boosted our profitability towards the end of the year.
Our funding remained stable even under the exceptional circumstances of 2022, and we continued to enjoy strong investor demand. We kept our liquidity at a high level throughout the year to ensure the availability of financing for our customers in all conditions.
The past year was again marked by general economic uncertainty, even after the exceptional uncertainty of the COVID years. In these uncertain times, our role in ensuring our customers’ operations and acting as our customers’ trusted partner has grown even more important. I wish to thank our customers for their confidence and forward-facing collaboration and our staff for their wonderful work and commitment to our shared goal.
The economic outlook has deteriorated markedly in all MuniFin’s main economic areas. In the United States, the main reason for the slowdown in growth is the rapidly tightening monetary policy, and in the euro area, the energy crisis and the surge in the cost of living. In China, the growth outlook is weighed down by the country’s COVID situation and property sector crisis. The euro area is expected to slide into a recession in early 2023, but the downturn in economy is projected to be relatively short-lived and shallow because businesses have adjusted to the energy crisis faster than expected, and many households still have some extra savings accumulated during the pandemic.
Inflation continues to pose the biggest challenge in global macroeconomy. The fastest rise in consumer prices is likely to calm down during the coming winter months, but it may take a few years for inflation to return to the central banks’ target level. Interest rate hikes will probably continue throughout the first half of 2023, other contractive monetary policy measures for much longer. Central bank key interest rates are predicted to rise to about 5% in the United States and over 3% in the euro area.
The Finnish economy is also sinking into a mild recession as real incomes are being eroded and businesses are more cautious in their investment decisions. The outlook has deteriorated especially in retail business and construction. General economic uncertainty and rising interest rates are a difficult combination for the housing market. Trends in building permits indeed suggest that the number of residential building projects will fall clearly in 2023.
It is to be expected that the cooling economic cycle will eventually also affect the labour market: employment growth will halt, and the unemployment rate will turn to a moderate rise. However, many sectors are currently facing such extensive labour shortages that strong growth in unemployment seems unlikely.
Finland’s public finances will continue to show a significant deficit in the coming years. Due to new cost pressures, especially the central government will run into much more debt than was previously estimated. Municipal finances, however, are looking exceptionally strong in 2023. Municipalities will not bear the full burden of the tax cuts introduced by the health and social services reform until in 2024, but they will experience the relief of their health and social services spending being eliminated immediately at the start of 2023. Thanks to the temporary tax benefit, the financial position of Finnish municipalities is expected to show a surplus of more than EUR 1 billion. The main uncertainties in municipal finances stem from the general economic development, the energy crisis and the yet unknown true cost of municipalities’ new responsibilities, such as the local government pilots on employment and the extension of compulsory education.
Considering the above-mentioned circumstances, the Group expects its net operating profit excluding unrealised fair value changes to be at the same level as in the previous year. The Group expects its capital adequacy ratio and leverage ratio to remain strong. The valuation principles set in the IFRS framework may cause significant but temporary unrealised fair value changes, some of which increase the volatility of net operating profit and make it more difficult to estimate.
These estimates are based on a current assessment of the development of MuniFin Group’s operations and the operating environment.
Municipality Finance Plc
Esa Kallio, President and CEO, tel. +358 50 337 7953
Harri Luhtala, Executive Vice President, Finance, CFO, tel. +358 50 592 9454
MuniFin’s annual report 2022 will be published around 7 March 2023. On the same date, MuniFin Group will also publish the Pillar III disclosure based on the Capital Requirements Regulation, and the Corporate Governance Statement.
The mandate for the new benchmark was announced on Tuesday 10 January. MuniFin received encouraging feedback from the market and decided to open books on Wednesday morning at mid-swaps+2bps area. The demand was strong from the outset and MuniFin was able to tighten the spread by 2bps. In just two hours, the books were closed in excess of EUR 3.6 billion.
The transaction carries an annual coupon of 2.875% and was priced at mid-swaps +0bps, equivalent to a spread of 61.9bps over the OBL 1.3% due October 2027 at the time of pricing.
The orderbook was of very high quality as nearly 60% of allocations went to banks, followed by central banks and official institutions (26%), Asset Managers (11%) and insurance and pension funds (3%). The allocations were also geographically diverse: Germany, Austria and Switzerland took 31% of the orderbook, followed by Nordics (24%), Benelux (14%), France (12%), UK (9%), rest of the world (5%), Other Europe (3%) and Asia (2%).
“This benchmark was a great kick-start for our funding year, and we are extremely happy with the outcome. Our transaction was quickly over twice oversubscribed despite the busy start-of-the-year timing and the uncertain atmosphere at the market, which highlights the great trust placed on us by the global investor community”, says Antti Kontio, Head of Funding and Sustainability.
This year, MuniFin plans to issue EUR 8-9 billion of long-term funding, which is in line with the new issuance volumes in 2022.
| Issue Amount | EUR 1.5 billion |
| Pricing Date | 11 January 2023 |
| Payment Date | 18 January 2028 (T+5) |
| Maturity Date | 18 January 2028 |
| Re-offer Price / Yield | 99.949% / 2.886% |
| Annual Coupon | 2.875%, Annual, ACT/ACT ICMA |
| Re-offer Spread | MS +0bps OBL 1.3% due October + 61.9bps |
| Format | Senior, Unsecured, Reg S |
| Listing | Helsinki Stock Exchange (Regulated market) |
| ISIN | XS2577104321 |
| Joint Lead Managers | BofA / JP Morgan / Morgan Stanley / Nordea |
“Huge congratulations to the MuniFin team for navigating a busy January window and successfully printing their joint largest ever transaction. This transaction provides an excellent starting point for the year ahead and highlights the value investors place on MuniFin’s core currency offerings.”
Adrien de Naurois, Managing Director, Head of DCM SSA & EMEA IG Syndicate, BofA Securities
“Congratulations to the MuniFin team for their stellar first benchmark issuance of 2023, successfully navigating a busy market. The high quality order book and their largest EUR benchmark since 2020 sets the scene for other Nordic issuers to follow. We are delighted to be involved in this landmark transaction.”
Matthieu Batard, Head of SSA Syndicate, J.P. Morgan
“A successful return to the EUR market for MuniFin with their first benchmark issuance of 2023. Despite competing supply, the deal amassed a high-quality and granular orderbook, which saw the trade tighten 2bps from initial guidance, further highlighting the strength of MuniFin’s credit quality. Congratulations to the MuniFin team on a stellar start to the year, Morgan Stanley is delighted to have been involved!”
Ben Adubi, Head of SSA Syndicate, Morgan Stanley
“Nordea is delighted to have played a role in MuniFin’s first EUR benchmark transaction of the year. Despite a notably congested start to the EUR primary market in January and going head-to-head with directly competing supply, MuniFin emerged with a very successful EUR 1.5bn 5-year benchmark with over twice as much final investor demand behind, while simultaneously tightening the spread by 2bps. Nordea congratulates the entire MuniFin team for kicking off 2023 with a stellar performance that highlights the strong support for its name amongst the global investor community.”
Kamal Grossard-Amin, Managing Director, Head of SSA DCM, Nordea
Joakim Holmström – Executive Vice President, Capital Markets and Sustainability
+358 50 4443 638
Antti Kontio – Head of Funding and Sustainability
+358 50 3700 285
Karoliina Kajova – Senior Manager, Funding
+358 50 5767 707
Lari Toppinen – Analyst, Funding
+358 50 4079 300