MuniFin joins Partnership for Carbon Accounting Financials (PCAF)

PCAF is a partnership of financial institutions with 346 members worldwide that work together to implement a harmonised and transparent method for GHG accounting. By joining, MuniFin commits to measure and disclose GHG associated with its lending and liquidity portfolios.

As a financial institution, MuniFin makes its greatest positive impact through its customers and financing the green transition.

“As the only financial institution in Finland specialised in financing municipalities and the affordable social housing sector, our mission is to build a more sustainable future together with our customers. To better succeed in this, it is imperative to understand the climate impact of our lending portfolio”, says Sustainability Manager Kalle Kinnunen.

The regulatory requirements for disclosing financed emissions are catching up, but it is the voluntary efforts that generate the greatest results.

“PCAF and the global GHG accounting and reporting standard have become the gold standard and we are happy to join this development and remain in the ranks of forerunners in sustainability. We had already applied PCAF’s guidance to our GHG accounting before joining. Still, methodologies for many sectors are continuously developing rather than established. We hope to benefit the network with our expertise on the municipal sector”, Kinnunen continues.

Reducing emissions is vital across the economy. According to Kinnunen, collaboration is key when it comes to sustainability and Finnish municipalities are a great example.

“The Finnish HINKU network is a great demonstration. Already 92 Finnish municipalities are members and they are committed to reducing their emissions by 80% from their 2007 levels by 2030. The network is coordinated by the Finnish Environment Institute SYKE that is the forerunner in municipal emission calculation, not only in Finland, but globally”, says Kinnunen.

In 2016, MuniFin was the first financial institution in Finland to offer green finance for climate and environmentally friendly investments, such as public transportation, renewable energy and sustainable buildings.

“Buildings are a significant source of emissions and to reduce them, energy efficiency is an important aspect to focus on. We want to continue to encourage and support our customers to make investments that reduce their emissions while meeting the needs of the people”, Kinnunen explains.

Kinnunen is eager to start the collaboration.

“We joined PCAF to better understand our impact. We need actual numbers, measurable goals and transparency followed by actions to push the whole industry towards more sustainable choices”, he says.

Further information

Kalle Kinnunen

Sustainability Manager, Funding and Sustainability

+358 400 489 425

Antti Kontio

Head of Funding and Sustainability, MuniFin

Tel. +358 500 3700285

Read more

PCAF: Financial institutions taking action

Final report on financing the green transition: Major investments are required but also create new opportunities for Finland

The final report of the national working group on financing the green transition in Finland, published on 9 December 2022, states that to mitigate climate change, halt biodiversity loss and transition to a circular economy, major investments will be needed from businesses, households and the public sector. The green transition will require system-level change in all of society and a comprehensive reform of economic structures, but it will also increase demand for Finnish expertise.

In January 2022, the Ministry of Finance, the Ministry of the Environment, and the Ministry of Economic Affairs and Employment appointed a national working group to get a comprehensive view on financing the green transition and financing measures to accelerate the transition in an ecologically, economically and socially sustainable manner. According to the working group, Russia’s war of aggression has escalated the change in the geopolitical situation and increased the urgency of the green transition and the need to break away from the fossil-fuel economy.

The report presents the key objectives defined by the working group to develop green transition financing and offers solutions and an estimate of the scale of the related investment needs. The report also discusses the role of various parties in financing the green transition and the different ways in which sustainability is taken into account in the financial markets. The working group submitted its final report to Minister of Finance Annika Saarikko, Minister of the Environment and Climate Change Maria Ohisalo and Minister of Economic Affairs Mika Lintilä on 9 December.

The working group was made up of public and private sector experts. One of the working group’s members was MuniFin’s Head of Funding and Sustainability Antti Kontio.

“Being a part of this important national working group has been inspiring. As a result of our work, the key parties in the green transition now have a shared view of the development needs and recommendations for the transition”, says Kontio.

According to the report, the green transition will open up new opportunities for Finland by increasing global demand for Finnish expertise, sustainable solutions and innovations.

“Our customers – municipalities and affordable social housing organisations – play a major role in the green transition. Our job at MuniFin is to support the important work our customers are doing to the best of our ability: by financing the green transition and by sharing our customers’ innovative sustainable solutions to help achieve the national goal of carbon neutrality by 2035”, Kontio explains.

The report is in Finnish and a summary in English can be found here.

The wooden apartment building quarter in Kuokkala sparks spontaneous meetings

The wooden apartment building quarter in Kuokkala is being developed by the Yrjö and Hanna Foundation, and it aims to be a pioneering project both in terms of its environmental consciousness and communality. The quarter is entitled Kalon, and it won the Asuntoreformi architecture competition in 2018. The name Kalon stems from ancient Greek philosophy and means moral beauty, beauty that is more than skin deep.

The quarter will consist of five wooden apartment buildings, which will have 166 apartments in total.

“Kalon completes the neighbourhood. The architecture and materials of the buildings tie them seamlessly to the surrounding buildings, the Kuokkala wooden church and the pioneering Puukuokka wooden apartment buildings”, says Ilkka Murto, director of real estate management at the Yrjö and Hanna Foundation.

The Kalon buildings are constructed from prefabricated wooden elements, meaning that 70–80% of the buildings are made at the factory before they are transported to the building site.

The buildings are heated with geothermal heat, and they have solar panels on the roof to generate electricity. The residents will be able to monitor their energy consumption in real time.

“The Yrjö and Hanna Foundation has decided to use geothermal heat as the primary source of energy in its buildings whenever possible. Finding places for the geothermal wells in the relatively small courtyard of the Kalon quarter was a bit of a challenge, but geothermal heat is a worthwhile investment that will pay itself back”, says Murto.

Intentional bottlenecks

The Kalon quarter consists of five wooden apartment buildings that have 166 apartments in total. Four of the five buildings have been financed with MuniFin’s green finance. Construction commenced in autumn 2022 and is expected to be completed in a couple of years. One of the buildings will have right-of-occupancy housing, two will be dedicated to communal senior housing and one will be designed for people with memory disorders. The fifth building will have non-subsidised housing offered at a market price.

“We’ve studied memory-friendly housing solutions together with the Housing Finance and Development Centre of Finland ARA and Aalto University. People with mild memory disorders can live safely in their own home for longer if the building is designed with this purpose in mind. Their life can be made easier by things like the smart use of colours”, Murto explains.

Communality has played a key role in Kalon’s design. Kalon will have common facilities, carsharing and possibly also a library of things.

“The solutions employed in the quarter foster communality. Before, we included a small common room in every building, but these are not used a whole lot. By putting the common facilities of all five buildings in one building instead, we were able to create larger and more functional common facilities for everyone.”

In Kalon, the common facilities include a kitchen, a sauna and a laundry. To increase communality, special attention has been paid to how people move from one place to another within the quarter. For example, residents walk past the common facilities on their way to the bus stop, and mail is not delivered to the apartments, but instead to letter boxes located in the common facilities.

“The common room is placed in the most interesting spot, both in terms of foot traffic and functionality. We are intentionally trying to create a bit of a bottleneck to spark spontaneous meetings”, says Murto.

Communality is further increased by Kalon’s community coordinator. Activities and community services will be developed in accordance with the residents’ needs.

“Time will tell what kinds of joint activities and joint use are created and which of them will become a permanent fixture.”

Good design makes life easier for everyone

The Yrjö and Hanna Foundation works hard to improve housing. The Kalon apartments are flexible and can be adapted to various situations in life. Solutions common in senior housing, such as zero thresholds and storage space for assistive equipment, have also been introduced to family apartments. One thing the Yrjö and Hanna Foundation will not compromise is accessibility.

“One of our buildings was designed for people who need a wheelchair. It was so successful that after a while, half of the fourteen residents were able to move about in their home without a wheelchair. Highly functional solutions are not necessarily expensive if they are well-planned and included in the designs early on. Many solutions designed for senior citizens also make life easier for families with children”, Murto points out.

The Kalon buildings, like all other buildings built by the Yrjö and Hanna Foundation, will have larger-than-usual elevators. They not only make life easier for senior citizens, but also for people with a baby pram. The importance of good design and communication is particularly pronounced in development projects and experimental projects.

“To make timber construction cost-effective, it’s vital to choose the main contractor at an early stage. This allows us to design the solutions together, which means fewer surprises during construction and helps keep the costs in check”, Murto explains.

The Kalon buildings feature large balconies and functional common facilities.

“We want to challenge existing practices in the field. But when building affordable housing, every choice must be weighed carefully to keep the rents from going up. We’ve had to make some compromises in this project, too”, Murto concedes.

The Yrjö and Hanna Foundation has worked closely not just with the architects and the contractor, but also with the City of Jyväskylä and the Kuokkala parish. The ground floor of the right-of-occupancy building will have facilities in which the parish will offer daytime activities for children. Joint activities are also in the plans, to be specified after the buildings are completed.

“This is a really nice project. Collaboration with all parties has been extremely fluent”, Murto commends.

Finance for Finland’s green transition

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 e.g. buildings, transportation and renewable energy categories.

Read more about green bonds

Text: Hannele Borra
Picture: Collaboratorio Oy

More ambition and transparency – MuniFin’s renewed Green Bond Framework has been published

Since the issuance of MuniFin’s first green bond in 2016, the sustainable bond market has been going through a lot of changes.

“The new framework has been developed to better address the current environmental challenges and to take new regulation, such as the EU Taxonomy and the proposed Green Bond Standard, into account”, says Sustainability Manager Kalle Kinnunen.

The new regulations have been used as guiding tools in defining the eligibility criteria. MuniFin has also mapped its project categories to the EU taxonomy activities.

“With this update, we now have firmer and more transparent eligibility criteria”, Kinnunen says.

The revision also involved some streamlining. There are now four project categories instead of seven: buildings, transportation, renewable energy as well as water and waste water management.

An important addition to the framework is the possibility to finance biodiversity and climate change adaptation projects. They were added as sub-categories.

“For example, green roofs or flood barriers, could have been financed as a part of building projects before but with this addition we wanted to facilitate such investments directly. In addition, the new framework allows us to provide more transparency on the impact of the projects”, Kinnunen explains.

These updates along with the strengthened internal resources allowed changes to the evaluation and selection process. In the past, MuniFin has relied on the external Green Evaluation Team, but now the evaluation and selection of green finance projects will be conducted by MuniFin’s own sustainability experts.

“This change would not have been possible without the years of valuable experience we have gained working with the external Green Evaluation Team. The new evaluation and selection process allows us to serve our customers more flexibly at the time of their financing needs. We will not compromise the scrutiny of evaluation and selection. On the contrary, the transparent criteria ensure the quality of approved green projects. As the market evolves, it will also be more straightforward to introduce additional criteria”, Kinnunen says.

MuniFin is open for dialogue with customers, investors and other stakeholders in order to enhance the framework and practices further.

“Our customers play a key role in achieving Finland’s goal of climate neutrality by 2035. Green finance is an important way to promote their green projects and we will keep adding ambition also in the future”, Kinnunen says.

External review

Cicero Shades of Green has provided an external review for the Green Bond Framework, including an assessment of the EU Taxonomy alignment. MuniFin managed to keep the Medium Green shading and even to raise the Governance score to Excellent.

There will also be an annual post-issuance review that confirms that the green bond proceeds have been allocated to eligible green finance projects.

The framework and the second party opinion are available here:

More information

Karoliina Kajova – Senior Manager, Funding

+358 50 5767 707

Kalle Kinnunen – Sustainability Manager, Funding and Sustainability

+358 400 489 425

MuniFin looks to finance municipal energy companies to strengthen the security of supply

MuniFin’s funding is guaranteed by the Municipal Guarantee Board (MGB). On 7 September 2022, the MGB decided to submit a notification to the European Commission seeking for permission to use funding guaranteed by the MGB to grant loans to energy companies controlled by Finnish municipalities. This arrangement will strengthen Finland’s security of supply by ensuring that energy companies are able to keep operating despite the unusual circumstances. If the Commission accepts the arrangement, MuniFin can grant loans directly to the energy companies.

The Municipal Guarantee Board (MGB) will submit its notification to the European Commission in cooperation with MuniFin and the Ministry of Economic Affairs and Employment. The current circumstances in the energy markets have led to a situation where the supply of energy has fallen substantially, leading to sharply increasing collateral requirements on derivatives used by energy companies. This severely endangers the continuity of their operations.

MuniFin has already announced that it stands ready to quickly start providing financing for municipalities that own energy companies to ensure the continuity of energy production. So far, EU rules on state aid have mostly prohibited MuniFin from directly financing energy companies operating in competitive markets. Financing of municipal energy companies will be established based on MuniFin’s standard business model, and thus possible loans to energy companies will still require a 100% municipal guarantee, as is required for any other company loans by MuniFin.

“The spiralling collateral requirements in the electricity market and the reduced energy supply have together created a crisis and given rise to a need to ensure the availability of essential services for citizens. Under the circumstances, we consider the proposed arrangement to be in accordance with competition laws”, says Esa Kallio, MuniFin’s CEO.

Measured by its balance sheet, MuniFin is one of Finland’s largest credit institutions. It has been able to continue its international funding operations also under exceptional circumstances, for example during the start of the Russian war on Ukraine, the COVID pandemic and the financial crisis.

MuniFin has never recognised any final credit losses in its customer financing. The purpose of banks’ international capital regulation is to minimise the risks related to banking operations. MuniFin’s CET1 capital exceeds the ECB’s requirements by more than six times.

“It is difficult to estimate how long the Commission will take to process the notification. The timeline will also depend on whether the MGB or MuniFin will be required to provide further information”, Kallio notes.

MuniFin’s funding is guaranteed by the Municipal Guarantee Board (MGB), a public law institution operating under the Act on the Municipal Guarantee Board (487/1996). The MGB’s members consist of all municipalities in mainland Finland.

First green bond this year a hit among ESG investors despite a challenging market backdrop


On 10 May 2022 MuniFin priced an EUR 500 million fixed-rate green benchmark due 17 May 2029. Utilizing a supportive issuance window and a strong demand for green assets, MuniFin opened books at 8:15 London time with price guidance at mid-swaps –8bs area. The limit was fixed to EUR 500 million.

The demand was strong from the outset and just in two hours the spread was tightened by 3bps. Shortly after, the books were closed in excess of EUR 1.4 billion. The transaction pays a coupon of 1.5% (annual) and a spread of mid-swaps – 11bps.

The transaction attracted a significant amount of ESG investors: nearly 80% of the final orderbook went to green investors. Central banks and official institutions took 38%, Asset managers 24% and bank treasuries 22%. Geographically; Germany, Austria and Switzerland took 24%, followed by BeNeLux at 23% and Nordics at 16%.

“The multiple times oversubscribed transaction shows us, once again, how solid our investor base truly is. Despite the volatile atmosphere in the market, our green bond attracted also brand new investors.  We are extremely pleased with the outcome and especially the great support from the ESG investor community”, says Analyst Lari Toppinen from MuniFin funding team.

Finance for Finland’s green transition

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 e.g. sustainable building, public transportation and renewable energy categories.

Read more about our green bonds

Transaction details

Issuer:Municipality Finance Plc (“MuniFin”)
Ratings:Aa1 / AA+ (both Stable) by Moody’s / S&P
Size:EUR 500,000,000
Coupon:1.5% annual, Actual/Actual (ICMA), following unadjusted
Pricing Date:10th May 2022
Payment Date:17th May 2022
Maturity Date:17th May 2029
Mid Swap Spread:-11bps
Joint Bookrunners:BNPP, Danske Bank, NatWest, SEB

Comments from bookrunners

“Congratulations to the MuniFin team for successfully launching their second EUR benchmark and first green bond of 2022. To execute such a solid transaction given the volatile market backdrop is a strong testimony of Munifin’s ability to build a strong and diversified investor following.”

Salma Guerich, DCM SSA, BNPP

“Congratulations to MuniFin on their highly impressive return to the EUR Green Bond market. With final pricing through fair value and a large and high quality orderbook in challenging market conditions, this truly demonstrates the strength of the credit and the support that MuniFin enjoys from the ESG focused investor community. Danske Bank is proud to have been part in this successful transaction.”

Axel Zetterblom, SSA Origination, Danske Bank

“A fantastic return to the Green Bond market for MuniFin. The quality of the investor base came through from the outset with investors showing strong support for the first MuniFin Green issuance of 2022. Amidst a more volatile backdrop, the extremely positive reception exemplifies the quality and demand for the MuniFin name, and support for their Green framework. We are very proud to have been involved at NatWest,”

Kerr Finlayson, Head of FBG Syndicate, NatWest

“SEB is delighted to have taken part in MuniFin’s latest triumph in the EUR Green bond market. Despite significant market volatility creating a challenging backdrop, the transaction garnered a high-quality, multiple times subscribed order book, and a final reoffer level through the fair value curve. This is a clear demonstration of MuniFin’s long-standing reputation amongst the ESG investor community.”

Rebekah Bray, Deputy Head of SSA Origination, SEB

Further information

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

Miia Palviainen – Manager, Funding

+358 50 5980 829

Lari Toppinen – Analyst, Funding

+358 50 4079 300

More customer benefits and investments in sustainability – MuniFin published its 2021 Annual Report and Green and Social Impact Reports

The demand for financing in the municipal sector was moderate and lower than expected in 2021. This was due to an unexpectedly good economic and employment situation and the central government’s COVID-19 support for municipalities. In contrast, the demand for non-profit housing finance grew moderately and has remained largely unaffected throughout the pandemic. Our new long-term financing for 2021 totalled EUR 3.7 billion.

What was 2021 like at MuniFin? Watch the video below.

This year, we report the impacts of our green and social finance in separate reports. We grant green finance to projects that have verifiable positive impacts on the environment and social finance to projects that produce widespread social benefits.

The cover of the Green Impact Report. On the left hand side a car connected to a charger. On the left hand side a girl with a dog on the backseat of the car.
The cover of the Social Impact Report 2021. On the left, there's a wooden house, on the right a happy disabled woman wearing headphones.

Integrating sustainability and new operating models

Sustainability is interwoven even more closely into all our operations and the work of all our employees. In 2021, we started to work on calculations to make the environmental load of our own operations more visible. We also published our Sustainable Investment Framework, which summarises the sustainability principles, processes and responsibilities in our investment activities. Because sustainability is such an integral part of all our work, we have incorporated it directly into our operational reporting for the first time, instead of publishing a separate report.

MuniFin’s year 2021 was characterised by renewal and the rooting of new operating models.

“This year, we will continue to renew, improve our management and integrate sustainability into our operations even more closely”, says Esa Kallio, MuniFin’s president and CEO.



New homes for people in mental health recovery: Diverse support measures help residents achieve an independent life

Mielen Association, a non-profit expert organisation that provides mental health and substance abuse services in Pirkanmaa, has commissioned a new supported accommodation unit in Nekala, Tampere. The apartment building will have 34 new homes for people recovering from mental health issues. The unit’s biggest asset is its location: the plot already houses a maisonette with 16 supported housing apartments as well as the Lideshovi activity centre.

“The new building is located by Lake Lidesjärvi, so some residents will have a view over the lake. The location is also excellent because the unit is only three kilometres from the Tampere city centre”, says Maarit Hirvonen, executive director at Mielen Association.

The new apartments are financed with MuniFin’s social finance and offer supported accommodation for people with mental health issues. The residents are offered daily support, including time with the staff members, conversational therapy and concrete help with everyday living.

“Our clients have very different needs. Some may need help with a single matter, while others require more comprehensive support. For example, our staff may offer conversational therapy to one client, but do housework with another. In addition to support with life management and medication, we can also provide social guidance or help dealing with the paperwork required for social security, for example”, Hirvonen explains.

According to Maarit Hirvonen, executive director at Mielen Association, supported accommodation is a temporary solution that yields good results.

Towards independent living

The new building will only house people recovering from mental health issues. Many residents come to supported accommodation from institutional care, but some transfer from their home and some come through social services.

“Living in supported accommodation is a temporary solution. Most of our residents live with us for a couple of years, moving on to independent living when the time is right. For municipalities, this is an affordable service because supported accommodation produces good results”, Hirvonen says.

Participation and recovery are at the heart of all Mielen Association operations. Residents get to have their say on various things, from the kind of support they need to the forms of groups and activities offered.

“Recovery is the core of our work. We believe that everyone can recover from mental illness. Difficult experiences can help people discover a way of life that is meaningful and good for them. With us, it is the clients who say what they want and how they want it. Our staff members do not tell clients what to do, but instead find a mutual way forward through discussion.”

The successful rehabilitation of the residents has long-term effects. The guidance and support that residents receive may decrease the negative effects of their mental health problems, improve their life management skills and socioeconomic situation, and empower them to live independently.

An apartment of one’s own and opportunities for participation

Mental health issues and substance abuse have increased considerably in recent years, and the COVID-19 pandemic is expected to only aggravate these problems. Tampere and the entire Pirkanmaa region are in dire need of more supported accommodation. In addition to new homes, the new unit will create new jobs and improve the use of existing facilities.

“The need is definitely there! When one resident is moving out, a new one is always moving in. We receive regular inquiries about vacant apartments. Thanks to the new building, we can take on new staff and boost the efficiency of our existing services. It will double our staff and allow us to increase staff time with residents and offer more group activities at the activity centre”, Hirvonen says.

In Nekala, construction work has progressed under lucky stars. The work has gone as planned and right on schedule – even the pandemic has not thrown a spanner in the works.

“Construction work began in late August, and the building has now reached its rooftop height. After the elements have dried off, next up will be the interior. So things are looking good, and the building should be completed in October or November this year”, says Hirvonen contentedly.

The activity centre located next to the new apartments will offer residents various activities. For this reason, most of the new building is dedicated to apartments, and common facilities are limited.

“In addition to apartments, the building will have one communal room and a laundry. Residents can go next door to the activity centre to see other people, grab coffee, read the papers, have lunch or take part in group activities. Saunas are also available next door”, Hirvonen lists.

As the construction work proceeds, the apartments are also beginning to take shape. Hirvonen is very pleased about the new homes. The new building includes many modern solutions and choices that improve the quality of living.

“All the homes will be a nice size, over 30 square metres each. The apartments will have an open-plan kitchen and living room with a dishwasher as well as an alcove or a small bedroom. Large windows make the homes nice and bright. On the apartments overlooking the lake, the view is naturally a nice bonus. The building will be entirely accessible, ensuring easy access with a wheelchair or walker. Modern electric locks also make life easier”, Hirvonen elaborates.

Social finance

MuniFin’s social finance is granted to investments that produce widespread social benefits. Social finance projects impact their surroundings and communities in a positive way: they promote equality, communality, welfare or regional vitality.

Social bonds

Written by Joonas Holste

Virtual photo and work site photo by Mielen Association

Maarit Hirvonen’s photo by Anna-Stiina Saarinen

Mari Tyster: Despite its flaws, regulation helps change the world

The pace of financial regulation has been accelerating since the late 1980s, with the financial crisis ramping up the speed even more. Developments in regulation have not always been straightforward or even logical, but despite their flaws, they have brought security and stability to our operations, customers and the market.

Tighter capital and liquidity requirements

The COVID-19 pandemic has highlighted the importance of the stability of the financial market. Banks have demonstrated their ability to operate during the crisis, in part thanks to the capital and liquidity buffers imposed on them. The economy as a whole has also not suffered as much as feared.

Harmonisation has made banking requirements clearer in general, but accounting for the specificities of the different business models is a difficult task.

Risk management and reporting

Different ways to identify, address and manage risks have evolved substantially over the years, and the importance of risk management is well understood across banking organisations. However, risk management has become such a multi-faceted and complicated process that it can sometimes be challenging to see the wood for the trees.

Reporting to the authorities has become somewhat of an art form, requiring specific reporting skills in addition to financial administration skills. Reporting currently serves the purposes of the authorities and not the businesses themselves, and as a result, the same data is being reported multiple times in an inefficient way. It would be beneficial to eliminate these overlaps and streamline reporting practices, but looking at the current roadmap of regulatory development, this does not seem very likely.

Requirements for investment services

The provision of investment services involves a considerable amount of reporting and information sharing between authorities, customers and other market participants. The rules are made to provide security for everyone in the market, but they also assist the authorities in their supervisory work to promote market stability.

Information overload can make investment services difficult to approach, but it is not the original purpose of regulation. This problem could perhaps be solved with legal design, which means making regulation and the relevant documentation more user-friendly and understandable.

MuniFin provides investment services on a relatively small scale, but the new regulation has nevertheless affected us substantially – perhaps even more than the regulators intended.

Necessity is often a good motivator. The current operating environment could have come about through independent market developments, but at a slower pace and with much more variation between different organisations.

Faster globalisation is challenging traditional operating models

Globalisation is accelerating and posing major challenges for the traditional approach to regulatory work. Very few things concern only individual countries these days. Time will tell whether regulation based on strict geographical boundaries will become downright impossible.

The European Union has partially tackled this issue by creating an European market. But the euro area and the European Union are not the same thing, which already creates many new regulatory nuances. Global phenomena will not stop at some boundaries drawn on a map; a good example of this is climate change and the EU Taxonomy for Sustainable Economic Activities, which seeks to speed up the achievement of climate goals by linking the funding of investments to their environmental impacts.

In the future, regulation will be problematic not only because of climate risks but also because of cyber threats, as a cyberattack can strike anytime from anywhere in the world. Regulation has the potential to make the world a better and safer place, but this requires more global cooperation.

At MuniFin, we closely monitor regulatory developments that are relevant to our own operations and aim to influence potential problem areas. In this constantly changing world, nobody has all the answers, but through open dialogue and cooperation, we can bring about regulation that truly advances society.

Mari Tyster
Executive Vice President, Legal and Communications, Deputy to the CEO, and Member of the Executive Management Team at MuniFin

MuniFin’s green bond premiere in the Sterling market attracted ESG investors

Taking advantage of the constructive market tone, MuniFin announced the transaction on Tuesday 26 October at 9:10 London time. The books opened with price guidance at UKT 09/24 +30bps area. The size was fixed from the outset at GBP 250 million. The orderbook grew steadily and was finally closed in excess of GBP 300 million at 12:15.

Central banks and official institutions took 44% of the orderbook, with Asset Managers as a close second with 42.9% participation. Geographically, European investors took 54.2%, excluding the Nordics. Asia Pacific took 34% and Africa and the Middle East 10%.

– We are excited to have issued our inaugural green bond in the GBP market and to have been able to offer the green bond product to the Sterling market. It was great to add a fourth currency to our green bond offering and to further diversify our green bond investor base. We are humbled by the vote of confidence from our investors and we couldn’t be happier, says Karoliina Kajova, Senior Manager at Funding and Sustainability at MuniFin.

MuniFin has previously issued EUR and USD green bonds in the public market and one private placement in AUD. The first green bond was issued in 2016. With this transaction MuniFin is close to completing its funding target for the year.

Read more about the transaction:

Transaction details

Issuer:Municipality Finance Plc (“Munifin”)
Ratings:Aa1 / AA+ (both Stable) by Moody’s / S&P
Size:GBP 250,000,000
Coupon:0.875% annual, Actual/Actual (ICMA), following unadjusted
Pricing Date:26th October 2021
Payment Date:02nd November 2021
Maturity Date:16th December 2024
Benchmark:UKT 2 ¾ 09/07/24
Benchmark Spread:+30bps
Joint Bookrunners:BofA Securities, Nomura, TD Securities

Comments from the bookrunners

Huge congratulations to the Municipality Finance team for navigating the volatile backdrop and printing a hugely successful, second GBP transaction of 2021. Excellent to see the issuer benefiting from the growing demand for ESG assets in GBP and adding a fourth currency to their Green bond offerings. The orderbook is testament to the strong following MuniFin has gathered amongst the UK investor base, as well as the broader global central bank community.

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

“Nomura was delighted to support Municipality Finance’s inaugural Green outing in the Sterling market – a resounding success, broadening MuniFins’s ESG investor universe and reinforcing the sustainability commitment of the organisation.”

Mark Yeomans, Managing Director, SSA Debt Capital Markets, Nomura

“Congratulations to the MuniFin team on a fantastic inaugural GBP Green transaction. There was notable participation from dedicated green investors in this trade; a clear vote of confidence from the market in MuniFin’s credentials in the ESG space. This transaction has added a fourth currency to MuniFin’s green offerings and helps further expand their green investor base.”

Laura Quinn, Managing Director, Head of Primary Markets, TD Securities, Dublin

Further information

Joakim Holmström

Executive Vice President, Capital Markets and Sustainability, MuniFin

+358 50 4443 638

Antti Kontio

Head of Funding and Sustainability, MuniFin

+358 50 3700 285

Karoliina Kajova

Senior Manager, Funding and Sustainability, MuniFin

+358 50 5767 707