MuniFin chosen as Best Structured Note Issuer second year in a row

CMD Portal is a British market data provider. The award winners are selected based on the opinions of market participants, league table statistics and interviews with market operators. Dozens of issuers are nominated as recipient candidates for this annual award.

MuniFin is a well-known structured note issuer and issues a significant amount of its annual funding in structured format, mainly in Asia. The cornerstones of MuniFin’s funding are flexibility and an investor driven focus.

– We highly appreciate being recognized with this award and we are delighted that our efforts in the structured note space are acknowledged again. The issuance of structured notes has been a strategic decision to diversify our funding sources and be able to cater to a wide range of investors, comments Joakim Holmström, Head of Funding at MuniFin.

Further information:

Finland’s first ever green bond boosts municipalities’ environmental investments

Finland’s first ever green bond, i.e. a bond earmarked for environmental investments, was launched at the end of September. The bond attracted a great deal of interest already in advance and was oversubscribed within a few hours.

On the bond’s value date – Tuesday, 4 October 2016 – the London Stock Exchange celebrated Finland’s first green bond in a market opening ceremony, which was attended by representatives from Finnish municipal customers, the Ministry of the Environment, the Finnish embassy, joint lead manager banks and MuniFin. The bond is quoted on the London Stock Exchange.

– MuniFin’s lending portfolio largely focuses on investments that can be described as socially or environmentally responsible. However, for the first time we can now earmark the activities funded by investors and tell them what is being achieved with their investments, says Pekka Averio, President and CEO of MuniFin, describing the significance of the Green Bond.

– The new financial instrument encourages municipalities to make sustainable decisions. The public sector makes a significant share of all purchases. Municipalities can encourage clean and energy efficient investments and boost the circular economy with their decisions, emphasises Hannele Pokka, Permanent Secretary at the Ministry of the Environment.

– The Finnish municipal sector is quickly becoming aware that environmental investments should be increased, and when initiatives are planned, broader account should be taken of their climate impact. To help the municipal sector absorb the change faster, we are offering more affordable funding for pioneering projects, Averio says.

Wide range of environmental initiatives: from Länsimetro to school buildings

MuniFin’s framework for green financing specifies the sectors of environmental investment that are eligible for the more affordable green funding. The categories included are renewable energy, public transport, sustainable buildings, water and waste water management, energy efficiency, waste treatment, and environmental management and conservation.

When we look at the projects funded so far, Länsimetro has received the most funding. Looking at the number of projects, most of them are related to sustainable construction and energy efficiency.

A lion’s share of sustainable building investments are related to school buildings. One such project is Tuupala’s wooden school in Kuhmo.

– Tuupala’s new wooden school is a national pilot project, which is also expected to become an international reference case. The completely wooden school building is energy efficient, and its district heating solution is based on bioenergy. Kuhmo is also a genuine bioeconomy success story in other respects: almost 70 per cent of energy used in the town is renewable primary energy, which is among the highest rates in the world, says Eila Valtanen, Mayor of Kuhmo.

The new Tyrnävä primary school will also be built with green funding.

– The school at Rantarousti is a wonderful example of our strategy – which is based on bioeconomy, circular economy and lifecycle efficiency – being put into practice. The new Rantarousti school will be heated with geothermal energy, and solar panels will generate some of the electricity used. The lifecycle efficiency imperative shows in the innovative space arrangements and choice of materials. Tyrnävä has decided to become a HINKU municipality, meaning that it aims at a major reduction in its carbon footprint within the next few years. The choices made for the new school support this aim, says Marjukka Manninen, Mayor of Tyrnävä.

An internationally rare feature in the assessment of MuniFin’s green funding is the fact that the projects’ suitability for the green funding framework is assessed by a group of external specialists. The total value of the green projects funded so far is approximately 400 million euros; in addition, several other investments are being considered for funding.

Further information:

Pekka Averio, President and CEO, MuniFin
tel. +358 500 406 856

First Finnish green bond was a success

– It was a strategic decision for MuniFin to access the Green Bond markets. We wanted to offer a new product to the capital markets and further expand our investor base. We are extremely pleased with today’s transaction, which serves as a base to build future transactions on. Amongst the almost 50 investors that the transaction attracted, there were a very large number of new investors who have not invested in MuniFin before, says Esa Kallio, Executive Vice President, Head of Capital Markets.

– MuniFin’s lending portfolio carries an enormous potential for green investments. In the future we intend to become a frequent green bond issuer, Mr Kallio continues.

The lead managers of the transaction were Bank of America Merrill Lynch, Credit Agricole, HSBC and SEB.

Pioneer in Finland

MuniFin is the first Finnish green bond issuer. The company has offered green financing to its customers since early 2016. Green financing can be granted to projects that have clear and measurable environmentally friendly impacts. At the moment the green lending portfolio stands at EUR 400 million with additional projects in the pipeline.

The green projects are assessed and approved by an external Green Loan Committee. The financed projects need to fulfill the requirements of the MuniFin Green Bonds Framework.

– We want to raise environmental awareness in the Finnish public sector. The projects that are approved to our green portfolio are granted financing with a slightly smaller margin than others. By doing this we support our customers to meet their environmental and climate objectives and encourage the whole municipal sector to make environmentally friendly investment decisions, Esa Kallio says.

Details of the transaction

The first Finnish green bond was traded on September 27 and will settle on October 4, 2016. The 5-year green bond was priced 33 basis points over the 5-year USD mid-swap and pays a fixed coupon of 1.375 %. Re-offer price was 99.495 % and the spread over the 5-year Treasury bond was 36.7 basis points.

Investor demand was strong from the outset and the book reached oversubscription by Tuesday afternoon on September 27. The bond was well distributed around the globe. Europe excluding the Nordics accounted for 42 %, Americas 29 %, Nordics 22 % and Asia Pacific 7 %.

Further information:

Esa Kallio, Executive Vice President, Head of Capital Markets
Tel. +358 50 3377 953

Jukka Helminen, Executive Vice President, Customer Finance
Tel. + 358 50 5987 615

Finland’s first ever Green Bond issue getting closer

The group of banks will organise for MuniFin a series of fixed income investor meetings in the US and Europe over the coming weeks to introduce its Green Bond Framework.

An inaugural USD-denominated Reg-S/144a Green Bond transaction may follow, subject to market conditions.

MuniFin launched Green Financing for its customers in April 2016. By the end of August, 330 million euros worth of Green Financing has been granted for the customers.

Further information on Green Bonds is available at Green bonds section of the website.

MuniFin successfully issued a new USD 1 billion benchmark

The order book exceeded USD 1.9 billion and there were orders from nearly 50 accounts. 70 % of the transaction was sold to Central Banks and Official Institutions, 17 % to Bank Treasuries and 13 % to Asset Managers. EMEA was the dominant area with a 55 % share, Americas and Asia Pacific accounted for 35 % and 10%, respectively.

MuniFin plans to issue EUR 6.5bn in 2016 and after the completion of this transaction MuniFin is almost 80 % complete for the year.

More information:

Esa Kallio, Deputy to the CEO, Head of Capital Markets tel. +358 9 6803 6231

Joakim Holmström, Head of Funding tel. +358 9 6803 5674

ECB adds MuniFin to the Eurosystem purchase programme list

– Being included in the list of agencies whose securities are eligible for purchase programmes further improves our already strong position in the international bond markets. This strengthens the  secondary market position of MuniFin’s public euro bonds particularly in cases of market disturbances, says Esa Kallio, Executive Vice President, Head of Capital Markets, MuniFin.

The Governing Council of the European Central Bank (ECB) decided on 2 June 2016 to add MuniFin to the list of agencies located in the euro area whose securities are eligible for the public sector purchase programme (PSPP).

See list of issuers included in the ECB’s public sector purchase programmes >

MuniFin is the Most Impressive Sovereign, Supranational or Agency Borrower in Medium Term Notes

MuniFin has been a runner-up before in the same category but this is the first time the company takes the first spot. This time the runner-up positions were taken by the World Bank and KfW.

– We are very delighted to receive this exclusive award. We know that we are competing with a distinguished group of issuers in the MTN space, and to be selected the Most Impressive of them is a huge honor. The fact that this award is selected through a voting process by market participants makes it even more special, says Joakim Holmström, Head of Funding at MuniFin.

– This recognition shows that we as an institution are focusing on areas the markets appreciate, such as responsiveness and flexibility, Holmström continues.


MuniFin launches green financing

Green financing is offered to selected projects that promote the transition to low-carbon and climate resilient growth. These projects seek to mitigate or adopt to the climate change.

All green projects are financed and located in Finland. In addition to marketing benefits and improved profiling advantage for the customer, MuniFin offers margin discount for all green projects.

Green financing is funded by Green Bonds

MuniFin’s inaugural Green Bond is planned to be executed in Q3 or Q4/2015. Size will be EUR or USD 500 million and maturity 7 to 10 years depending on the market conditions.

In the future MuniFin aims to issue one benchmark sized Green Bond per year. This represents approximately 15 per cent of the annual gross lending volume.

Read more about MuniFin’s Green Bonds

MuniFin’s EUR 1bn benchmark attracted investors

On March 15, 2016 MuniFin issued a 1bn euro benchmark maturing in October 2021.  The transaction was MuniFin’s first euro benchmark in 13 years.

The coupon was fixed at a record low 0.1 percent with a re-offer yield of 0.122 percent. Despite the tight pricing, the benchmark was very attractive, with books closing in excess of EUR 1.6 billion.

The book was very granular with over 50 accounts participating from more than 15 jurisdictions. The demand was greatest in Europe, especially in Germany (20 %), France (16 %), the Nordics (15 %) and Benelux countries (9 %) and outside Europe in the Middle East (17.5 %) and Asia (10 %). The most important investor type that participated in the transaction were banks with a 50 per cent share, central banks and official institutions adding up to 38 per cent of the allocation. The share of asset managers and insurance and pension funds was 12 per cent.

– MuniFin’s mission is to ensure the availability of competitive financing for Finland’s municipal sector and government-subsidised housing production under all market conditions. To fulfil this, we actively strive to diversify our funding in different markets. We have consistently been building an investor base for example in the USD markets. With our growing funding needs, we also wanted to offer our investors a euro benchmark, says Executive Vice President Esa Kallio at MuniFin.

The lead managers were Barclays, Danske Bank, J.P. Morgan and Société Générale.

– The basis of MuniFin’s operations on the international capital markets are its stable and high credit rating. The investors also value MuniFin’s active investor relations work. These factors combined with the issuer’s ability to act fast in the markets were crucial for the benchmark’s success, says Samu Slotte, Head of DCM Finland at Danske Bank.

Further information:

Esa Kallio, Executive Vice President, MuniFin, tel. +358 50 3377 953 
Joakim Holmström, Vice President and Head of Funding, MuniFin, tel. +358 50 4443 638
Samu Slotte, Head of DCM Finland, Danske Bank, +358 50 68 924

Significant issuer awards for MuniFin

Mtn-i, a British market data provider, awarded MuniFin the Agency Issuer of the Year 2015  award in its award ceremony on February 11, 2016.

– Being recognized as the best Agency Issuer is a significant achievement for us. SSA issuers have attractive investment opportunities to offer in the international capital markets, and the amount of active issuers is large. We have been building a strong presence in several markets and put a lot of effort into developing investor relations and a flexible product offering. The mtn-i award is a recognition for this work, says Esa Kallio, Senior Vice President and the Head of Capital Markets at MuniFin.

Earlier in December 2015 Capital Market Daily (CDM) chose MuniFin as the Best Structured Note Issuer and the Best Uridashi Bond Issuer.

MuniFin was in very good company; the only other winners besides MuniFin in the awards CMD Portal organizes in several categories were the German development bank KfW and the World Bank Group subsidiary IFC. The Best Issuers chosen by mtn-i were MuniFin, the World Bank, the Dutch ABN AMRO bank and energy giant Engie.

Further information:

mtn-i 2016 award winners

CMD 2016 Issuer Awards