Second green Nordic debut: MuniFin issues its first SEK green bond

MuniFin has taken another significant step in the Nordic green finance market by issuing its inaugural green bond in Swedish krona (SEK). The successful SEK 4 billion issuance represents the largest green transaction outside EUR and USD benchmarks for MuniFin.

On Tuesday, 12 November, MuniFin issued its first SEK green bond. The SEK 4 billion bond carries a fixed annual coupon of 2.4825% and matures 19 November 2029. Danske Bank acted as the sole manager for this transaction.

“We congratulate MuniFin with their SEK 4 billion 5y green bond and the first green bond for MuniFin SEK. Today’s transaction confirms the continued interest in green format from investors in an otherwise challenging market, and combined with a solid issuer it proves to be the right strategy in the current market environment”, says Bo Søndergaard, Head of SSA at Danske Bank.

This issuance follows MuniFin’s debut in the Norwegian krone market in September, where it launched its first NOK 2 billion green bond. The new SEK bond is MuniFin’s fourth ESG-labelled issuance this year.

“The Scandi market has been favourable to us this year, and we are excited to expand our green offerings into yet another currency. I want to thank all our investors and customers who make it possible for us to grow our green finance in line with our Sustainability Agenda”, says Lari Toppinen, Senior Analyst at MuniFin.

After this transaction, MuniFin is very close to reaching its 9 billion long-term funding target for the year.

Transaction details

Issuer:Municipality Finance
Issuer Rating:Aa1/AA+ (Stable/Stable, Moody’s/S&P)
Format:Senior Unsecured Green Bond
Size:SEK 4 bn
Settlement Date:19-Nov-2024 (T+5)
Maturity Date:19-Nov-2029
Reoffer:MS+26.75 / 2.4825% / 100.000%
Coupon:2.4825%, Fixed, Annual, 30/360
Listing:NASDAQ Helsinki
ISIN:XS2942472205
Lead Manager:Danske Bank

Green bonds fuel Finland’s green transition

MuniFin’s green finance, funded with green bonds, is offered to select projects across Finland that are friendly for the climate and environment. Our green finance has four project categories: buildings, transportation, renewable energy and water and wastewater management.

A milestone for sustainable finance: MuniFin hits a full ten green bonds

Our USD 1 billion green bond, issued on October 8, marked a milestone tenth green bond issuance for MuniFin. We issued our first green bond in 2016 and have been pioneering green finance in Finland ever since. 

MuniFin issues both green and social bonds. The total outstanding balance for these funding instruments is over EUR 4.5 billion. 

“The share of green and social finance is growing at a good pace and in line with our targets. Both clients and investors are increasingly attentive to questions about sustainability. Reaching ten green bonds issued is the result of hard work and long-term development from our team: we are most pleased to be able to call ourselves pioneers of sustainable finance in Finland”, MuniFin’s Executive President, Capital Markets and Sustainability Joakim Holmström states. 

In 2023, of our long-term financing 14.6% was green and 6.8% social finance. In our sustainability agenda, published the same year, we set our sights on raising the share of sustainable finance to one third by 2030.  

The sustainability agenda also sets the target to reduce the emissions from financed buildings. Out of all Finland’s greenhouse gas emissions, more than 40% come from buildings and the construction industry: this means repair construction and energy-efficient construction have significant potential to help Finland in its national emission reduction targets. 

“Green and social bonds are an integral part of our funding strategy, and we aim to issue at least one green or one social bond each year. These bonds have been in high demand among our investors: our latest green bond garnered the largest order book in MuniFin’s history with USD 5.5 billion”, Holmström describes.  

Our issuances have received recognition also beyond Finland. In December 2023, the UK-based CMD Portal awarded MuniFin as the Best SSA ESG Bond Issuer, and as the runner-up in the Best ESG Issuer category. MuniFin has also won Environmental Finance’s Green bond of the year award on three occasions, the latest one coming in 2022.  

MuniFin is Finland’s pioneer in sustainable finance

In 2016, MuniFin launched green finance for projects that are friendly for the climate and environment. We were the first Finnish financial institution to issue green bonds and offer green finance. 

In 2020, we complemented green finance by launching social finance, which is offered for projects that promote equality, communality, safety, welfare or regional vitality. We were the first issuer of social bonds in Finland.

These bonds are an integral part of our funding strategy. Both green and social bonds have their own frameworks.

MuniFin’s green bond draws record USD 5.5 billion in demand

MuniFin, rated AA+, made history with its fifth benchmark of the year. The green 5-year benchmark garnered an astonishing USD 5.5 billion order book, representing the largest one ever for MuniFin. 

On Tuesday, 1 October, MuniFin announced a mandate for a new USD 1 billion (no-grow) green bond with initial price thoughts in the MS+50 bps area. The demand was exceptionally strong from the outset, and the spread was tightened twice by 2 bps the following morning, setting it at +46 bps. 

The books eventually closed above USD 5.5 billion, setting a record for MuniFin.  

“We are excited to return to the green USD market with a 1 billion benchmark, reflecting the continuous growth of our green finance portfolio. The strong investor demand reaffirms the USD market’s strength. Thank you to our investors and joint lead managers for making this happen”, says MuniFin’s Senior Analyst Aaro Koski

“Congratulations to the MuniFin team on a well-timed and executed USD green transaction. The depth and diversity of the order book are a testament to MuniFin’s global appeal and longstanding conventional and ESG investor bases. We are delighted to have supported them on this exercise”, said Adrien de Naurois, Joint Lead Manager on the transaction from BofA Securities. 

Investor demand was driven by good-quality accounts. Central banks and official institutions took 61% of the allocations, bank treasuries took 25%, and the remaining 14% went to fund managers and insurance or pension funds. Geographically, the distribution was well diversified across EMEA (Europe, the Middle East and Africa), the Americas and Asia. 

MuniFin has now completed approximately EUR 8 billion out of its 9 billion long-term funding target for the year. 

Green bonds fuel Finland’s green transition 

MuniFin’s green finance, funded with green bonds, is offered to select projects across Finland that are friendly for the climate and environment. Our green finance has four project categories: buildings, transportation, renewable energy and water and wastewater management. 

Transaction details

 Final terms, 2nd October 2024

Issuer Municipality Finance Plc (“MuniFin”) 
Issue rating  Aa1 / AA+ (Moody’s / S&P) (all stable) 
Issue amount USD 1,000,000,000.00
Pricing date 2nd October 2024
Settlement date 9th October 2024 (T+5)
Maturity date 9th October 2029
Re-offer price / yield 99.557% / 3.723% 
Coupon 3.625%  (semi-annual)
Re-offer spread Mid-swaps +46bps 
Spread vs benchmark UST 3.5% Due September 2029 +16.1bps 
ISIN XS2914674408 / US62628PAG19
Joint lead managers BofA Securities, Nomura, RBC Capital Markets, TD Global Finance

Distribution by type

Distribution by region

Comments from joint lead managers

“Municipality Finance (MuniFin) returned to the USD market with a bang, extending their curve out to Oct-2029s. The $1bn no-grow 5-year garnered a $5.5bn book, utilising their Green assets for the transaction, their first time in the USD market for 8 years. The transaction witnessed phenomenal traction and provided USD investors the rare opportunity to engage in a Munifin Green Bond. The result is a testament to Munifin’s credit quality and standing with the global investor base. Congratulations!”

Mark Yeomans, Managing Director, Public Sector DCM, Nomura

Congratulations to the MuniFin team on a very successful USD 5-Year Green transaction; reacting swiftly to print their first USD Green Benchmark since 2016. The final orderbook in excess of $5.5bn marks MuniFin’s record for a USD transaction; a reflection of the high-quality credit and a recognition of the team’s efforts on global investor engagement. RBC was delighted to be involved and it was a pleasure working with the team on this transaction.”

James Taunton, Head of Public Sector Origination, Europe, RBC

“Congratulations to the MuniFin team on an outstanding result with their 5yr USD Green transaction. The team managed to take advantage of robust execution conditions in the USD market and pick an excellent execution window resulting in a phenomenal outcome!”

Laura Quinn, Managing Director, Global Co-Head of SSA and Head of Dublin Debt Capital Markets, TD Global Finance

MuniFin is Finland’s pioneer in sustainable finance

In 2016, MuniFin launched green finance for projects that are friendly for the climate and environment. We were the first Finnish financial institution to issue green bonds and offer green finance. 

In 2020, we complemented green finance by launching social finance, which is offered for projects that promote equality, communality, safety, welfare or regional vitality. We were the first issuer of social bonds in Finland.

These bonds are an integral part of our funding strategy. Both green and social bonds have their own frameworks.

MuniFin’s debut green NOK bond sees strong demand in the second ESG-labeled bond issuance this year 

MuniFin successfully priced its inaugural NOK 2 billion green bond on September 19th, drawing strong investor demand despite the ample supply in the SSA NOK market.  

MuniFin’s inaugural NOK 2 billion green bond was priced on 19th of September. The transaction marks MuniFin’s first green bond in the Norwegian market and its second ESG-labeled NOK trade of the year.  

The high-quality investor base showed significant interest from Norwegian domestic bank treasuries. The books built very quickly and were closed at a spread of +20 bps over 3-month Nibor. 

 “Congratulations to MuniFin on this successful inaugural green outing in the Norwegian market. The transaction is a true testament of MuniFin’s market access and an excellent addition to their currency pallet for green bonds. SEB is delighted to have been a part of MuniFins first-ever green bond in Norwegian Kroner”, comments Axel Zetterblom, SSA Origination at SEB.  

“We are excited to see our green customer finance grow in line with our Sustainability Agenda, allowing us to expand our green issuances into a new currency – the Norwegian krone market. We extent our heartfelt thanks to our investors for their continued support”, says Lari Toppinen, Senior Analyst at MuniFin. 

Transaction details

IssuerMunicipality Finance (KUNTA, MuniFin)
Issue ratingAa1/AA+
StatusSenior unsecured
Reoffer price100%
Reoffer spread3mN + 20bps
Issue sizeNOK 2bn
Settlement26 September 2024
Maturity26 September 2029
Coupon3.666% Fixed, Annual, Act/Act ICMA Unadjusted Following
ListingNasdaq Helsinki
ISINXS2908585933
Lead managerSkandinaviska Enskilda Banken AB

MuniFin’s funding team visits Blominmäki wasterwater treatment plant—watch the video!

MuniFin plans to complete EUR 9 billion of long-term funding this year. But what kind of projects do we finance? Join Senior Analyst Aaro Koski and Senior Manager Karoliina Kajova on their visit to Blominmäki wastewater treatment plantone of our green finance projects powered by green bondsand find out what to expect next.

Read more

Before releasing the video, MuniFin issued its 4th benchmark of the year on Thursday, 22 August 2024.

MuniFin secures EUR 1 billion with successful autumn benchmark debut

Niiralan Kulma emphasises green and societal values in ten new projects

Niiralan Kulma, the largest rental company in Kuopio, invests significantly in sustainable and environmentally friendly living.

Niiralan Kulma’s recent investments adapt to the changing needs of Kuopio. New residents move to the city for work, and they need comfortable homes. Simultaneously Kuopio is preparing for population ageing by building service housing.

“Ten years ago, we talked about affordable, quality housing. Now our strategy has expanded to include responsibility, which must cover environmental and social values,” says Kari Keränen, CEO of Niiralan Kulma.

Seven new apartment buildings are currently financed with MuniFin’s green finance, and three service housing projects have been completed with MuniFin’s social finance.

“When we evaluated long-term interest rates, MuniFin offered the most affordable solution. The margin and the interest rate were lowered because these new projects are green and social.”

Cozy and environmentally friendly homes

Niiralan Kulma is building homes in seven different locations across the city of Kuopio.

“We are planning and building cozy homes that effectively utilise energy-saving technology and renewable energy. Building technology takes into account the by-products of energy. We use geothermal heat, recover heat from wastewater, capture excess energy from mechanical ventilation, and utilise solar energy. It was very important to design the houses to be maintenance-free and long-lasting,” Keränen says.

Many methods are in use to improve environmental friendliness. The new apartments do not have unusable space that requires heating, and there are multiple waste bins in the apartments for recycling.

“In addition to the living spaces, we have invested in bicycle parking and charging points for electric cars. The smallest details are important, for example, with electronic notice boards, no papers have to be printed to inform the residents.”

Service housing for seniors and young adults

Männistön Aimu, which offers rehabilitative service housing for young adults, was completed in early 2020. Next completed in 2022, Liito-orava care home, provides service housing apartments and rental apartments for seniors. Most recently, Levänen service center was opened for residents in October 2023.

“Both the service center and the care home offer 60 places for residents, which are rented by the wellbeing services county of North Savo. They also organise the care needed by seniors.”

Residents were involved in the planning of the service centers, and they as well as the care staff have been satisfied with the end results. Männistön Aimu’s small apartment building is inviting from the outside: unpainted wooden surfaces of the house are environmentally friendly and stand out from the street view.

The costs of these projects were the following: Männistön Aimu is EUR 2.1 million, Liito-orava is EUR 10.2 million and the Levänen service center is EUR 8.7 million.

“We want to thank the staff of MuniFin. We received a lot of help and clear instructions when we needed them. The financing arrangement has been smooth.”

Affordable social housing

The Finnish affordable social housing sector plays a significant role in the development of a sustainable welfare state. In Finland, affordable social housing is mainly provided by municipality-owned companies and nationwide non-profit organisations. MuniFin is the main financier of affordable social housing production in Finland. An increasing amount of housing in Finland is being constructed and financed with consideration for social and environmental factors.

Text: Sara Pitzén
Photo: Niiralan Kulma

Children and youth of Kokkola innovate environmental actions in a competition sponsored by the Green Pioneer of the Year prize money

The City of Kokkola won our Green Pioneer of the Year competition last year. The prize money was used to organize a competition in which local children and youth could propose ideas for sustainable development initiatives.

Last fall, MuniFin awarded Kokkola the Green Pioneer of the Year title. The competition prize was EUR 10,000, which the winner could use for a sustainability project of their choice.

With the prize money, Kokkola organized a competition where preschool and school children could innovate projects related to climate and the environment.

“Environmental issues are crucial for the happiness of the younger generation. That’s why we in Kokkola believe in our children and young people and wanted to involve them in brainstorming for a green future,” explained Veli-Matti Isoaho, Head of Construction for the City of Kokkola, on the decision to organize the competition.

A total of 44 teams participated in the competition in four different age categories. Each team could submit one project for the competition. Ideas were collected during February and March 2024.

Ambitious and creative projects impressed the jury

The winners of the competition were announced at an award ceremony in early May organized by the City of Kokkola. The following groups were selected for their innovative ideas:

Early Childhood Education

Winner: Ulkometsä Daycare

Project: Integrating Recycling into Daily Daycare Activities

Preschool – 2nd Grade

Winner: Lohtaja Kirkonkylä School, 2nd Grade

Project: Nature-Friendly Schoolyard

3rd – 6th Grade

Winner: Kälviä Marttila School, 6th Grade

Project: Marttila School’s Backyard Garden

Junior High

Winner: Hakalahti School, 9A

Project: Biodiversity Protection Campaign

Each category winner will receive an EUR 2,500 cash prize, which the class or group can use as they wish.

Green Pioneer of the Year Won with the Piispanmäki Project

Last year, Kokkola won the competition with the Piispanmäki multi-functional building project. The city’s commitment to green financing requirements impressed the competition’s evaluation panel.

“Kokkola has admirably taken ownership of sustainable construction, which was evident in the Piispanmäki project. The initiative was managed internally, with the entire organization committed to it. It was a pleasure to see how Kokkola’s children and young people were involved in environmental discussions,” said Daniel Eriksson, MuniFin’s Customer Relationship Manager.

MuniFin first named a Green Pioneer of the Year among its clients in 2019, recognizing those who have ambitiously advanced climate and environmental goals.

Read more:

The city of Kokkola is the Green Pioneer of the year 2023

Greener energy production changes impact reporting – Nordic green bonds impact reporting recommendations updated

MuniFin is part of a Nordic public sector issuer group that has released a new edition of the Position Paper on Green Bonds Impact Reporting. The updates to these reporting recommendations stem from recent market developments, especially from emission reductions in energy production.

Published by Nordic public sector issuers, the Position Paper on Green Bonds Impact Reporting is a practical guide to reporting the environmental impact of projects financed through green bonds. It includes impact indicators, calculation methods and reporting practices.

“The material changes in the 2024 update include revised emission factors for electricity and district heating, new recommendations for vintage reporting and more specific recommendations on topics such as look-back/allocation periods, refinancing, ESG strategy and risk management”, says MuniFin’s Sustainability Manager Mikko Noronen.

In the latest edition of the position paper, the issuer group revised the emission factors for electricity and district heating downwards to reflect the energy sector’s rapid transition towards fossil-free energy sources.

Nordic recommendations harmonise the green bonds market

The purpose of the Nordic reporting recommendations is to create harmonious and transparent green bonds impact reporting principles that cultivate market practices. This allows issuers to report on the environmental impact of their financed projects in a way that offers investors high-quality information that is comparable, transparent and also supports the investors’ own reporting.

“For sustainable bonds to retain and strengthen their credibility as useful tools to finance the transition, it is of importance that market participants undertake issuance and reporting in a diligent and transparent manner”, says Björn Bergstrand, Head of Sustainability at Sweden’s Kommuninvest and coordinator of the Nordic cooperation.

Developed to assist Nordic public sector borrowers in reporting the environmental impact from their investments, the Position Paper on Green Bonds Impact Reporting has come to be used by issuers also in the private sector.

The Position Paper on Green Bonds Impact Reporting was first introduced in 2017 and is now in its fourth edition.

The Nordic public sector issuer group publishing the Position Paper on Green Bonds Impact Reporting includes MuniFin and MuniFin’s Nordic public sector counterparts, Kommunalbanken in Norway, KommuneKredit in Denmark and Kommuninvest in Sweden, as well as the Swedish Export Credit Corporation (SEK) and a number of Swedish municipal and regional issuers.

Position Paper on Green Bonds Impact Reporting_(2024)

MuniFin Green Impact Report 2023

Press release: Nordic issuers update green bonds reporting guidance

Further information

Mikko Noronen, Sustainability Manager
mikko.noronen(at)munifin.fi
Tel. +358 50 4797 533

The Finlandia Prize Awarded Martta Wendelin Daycare Centre is a demonstration of environmental consciousness and child-focused philosophy

Originating from the vision of children, the Tuusula-based Martta Wendelin Daycare Centre embodies respect for children and sustainable development.

Since the summer of 2022, this exceptional building has added life to the scenery of the municipality of Tuusula in Southern Finland. The Martta Wendelin Daycare Centre, designed with children’s needs in mind, won the prestigious Finlandia Prize for Architecture for its distinctive architecture and execution.

User-oriented approach and ecological values steered the project

As part of the service network design in 2018, Tuusula resolved to replace several old daycare centres with new buildings. Stemming from a vision of preschoolers, the Martta Wendelin Daycare Centre was established, resulting in a new daycare centre in Tuusula with 10 groups, providing about 200 daycare places for children.

“The idea for the daycare centre was born when we started sketching a vision of the dream playground together with preschool-aged children. Later, the Martta Wendelin Society joined the project. This was natural, as the artist Martta Wendelin, known for her depictions of Finnish rural and home life, spent most of her life right here in Tuusula,” recalls Tiina Simons, Director of Education in Tuusula, about the early stages of the project.

Martta Wendelin’s art is also a prominent part of the daycare’s interior decoration.

“The entire project has been carried out using user-centred design. The history of Tuusula has been brought into the building in a skillful and beautiful manner,” says Pirjo Sirén, Director of Municipal Development.

Significant efforts have been made in the implementation of the Martta Wendelin Daycare to utilise environmentally friendly solutions and climate-smart construction. This can be seen, for example, in the energy efficiency and in the way the principles of the circular economy have been taken into account both during the construction phase and in the planning of the building’s life cycle.

Thanks to its environmental friendliness, the project has been financed with green finance from MuniFin.

“Although the high-quality implementation of the daycare required a significant investment, we expect to achieve savings on the operating budget side. Combining four early education units into one makes the organization of operations more cost-effective and the maintenance of the property easier,” says Markku Vehmas, the acting Chief of Staff of the municipality.

Children and nature come first

The Martta Wendelin Daycare Centre embodies respect for the environment and sustainable development. The building has been constructed with materials that prioritise environmental friendliness and health.

“The structures of the exterior and interior walls as well as the intermediate floors have used CLT massive construction that acts as a carbon sink. The design of the spaces has focused on diversity and flexibility so that they can serve different purposes. The yard designed for play and exercise beautifully opens to the south. Part of the forest has also been left on the yard area to be preserved, as well as a stormwater puddle where children can jump to their heart’s content in rainy weather,” Sirén describes.

“The building has also not been filled with colors or artworks. The wooden surfaces create frames into which the children can bring colors,” Simons continues.

The exceptional nature of the building has brought various recognitions to the municipality. In addition to the Finlandia Prize for Architecture, the daycare centre has also won the 2023 International Award for Wood Architecture, awarded by five European architectural journals.

“I also consider the awards as a tribute to our high-quality early childhood education,” Simons states.

Most importantly, positive feedback has been received from the users of the building.

“We have received particular praise for the brightness and spaciousness of the spaces. Children love being at the daycare and enjoy themselves both indoors and in the yard activities,” Simons rejoices.

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.

Text: Anne Laiho
Photo: The municipality of Tuusula

MuniFin awarded as the Best SSA ESG Bond Issuer

The award is given to an SSA, Sovereigns, Supranational, and Agencies, borrower that is active in international and local SSA bond markets, offering a full range of products, in private and public format, in multiple currencies across the yield curve and to the broadest range of SSA ESG bond investors. CMD Portal is an independent collaborative market data network for bond and money market professionals. 

CMD Portal praised MuniFin for our long-term commitment to sustainability. In October, one highlight on our ESG path, was the publication of the new Sustainability Agenda with clear long-term objectives for our sustainability efforts. The agenda sets two main themes: supporting the Finnish welfare society and accelerating Finland’s green transition through our financing, for which we source funds with our sustainable bonds.  

“Our customers play a significant role in achieving Finland’s climate goals. Therefore, we aim for at least one-third of long-term customer financing to be green and social finance by 2030. The most notable change compared to our previous initiatives, is that we set reduction targets for financed buildings. Our goal is to achieve a reduction to 8 kgCO2 per m2 by 2035 and our green finance plays a vital role in achieving this target”, says Sustainability Analyst Mikko Noronen from MuniFin’s Funding and Sustainability team. 

On the sustainable bonds front, the year had two successful issuances. In February, MuniFin issued a record-sized EUR 1 billion green bond, which was the largest ever EUR denominated green bond by a Nordic SSA issuer. It was quickly nearly twice oversubscribed and 80% of the high-quality orderbook was allocated to ESG investors. Another highlight was the successful USD 100 million social bond in August, which was issued as a private placement. 

“The past year continued to be successful on the ESG front and we are extremely happy for this recognition. We aim to maintain our presence in the sustainable bonds market also next year when we are planning to issue EUR 9 –10 billion of new long-term funding. The sizes of our sustainable bonds will depend on the development of the customer financing portfolio”, says Senior Manager Karoliina Kajova from MuniFin’s Funding team. 

MuniFin also wins runner-up for the Best ESG Issuer Award. Our active presence and successful issuances have been acknowledged by CMD Portal also before. In April, MuniFin’s record-size green bond earned the TopDeal acknowledgement, and in January, MuniFin earned the award of the Best Structured Notes Issuer, which was the third year in a row for this recognition.  

MuniFin is Finland’s pioneer in sustainable finance 

In 2016, MuniFin was the first financial institution in Finland to offer green finance for climate and environmentally friendly projects and was the first Finnish issuer of green bonds.  

In 2020, MuniFin became the first financial institution in Finland to issue social bonds, which is offered to projects that promote equality, communality, safety, welfare, or regional vitality.  

These bonds are an integral part of our funding strategy. Both green and social bonds have their own frameworks. 

Read more about our green and social bonds

Read more 

MuniFin issues a record-breaking EUR 1 billion green bond 

MuniFin’s sustainability agenda aims to increase the amount of sustainable finance and reduce financed emissions 

Further information  

Antti Kontio – Head of Funding and Sustainability  

+358 50 3700 285  

Mikko Noronen – Sustainability Analyst, Funding and Sustainability 

+358 50 479 7533 

Karoliina Kajova – Senior Manager, Funding  

+358 50 5767 707  

Lari Toppinen – Senior Analyst, Funding 

+358 50 4079 300  

Aaro Koski – Analyst, Funding 

+358 45 138 7465