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Overwhelming demand for MuniFin’s EUR 1.5 billion benchmark

The announcement for the new November 2024 EUR benchmark was announced to the market late morning in London at 11:00 UKT on the 7th of January, with books officially opening the following morning at 8:15 UKT.

Demand for this deal was extensive and the orderbook started to build up quickly. The first update was provided to the market at 9:08 UKT with books in excess of EUR 1.8bn and guidance revised to MS –4 bps area. The final spread was set shortly after at MS –5 bps with final books finishing at EUR 3.9bn after closing at 11:05 UKT.

This transaction attracted a high quality group of investors and the composition of allocations was as follows: Official Institutions (47%), Banks (33%), Asset Managers (18%) and Insurance / Pensions Funds (2%).

The orderbook was very granular with diversified allocation to different geographical locations as follows: Benelux (24%), Nordics (20%), France (14%), Asia (7%), Other Europe (25%) and Other (10%).

Comments on the transaction

– An impressive outcome for MuniFin, refreshing their EUR curve with a new short 5 year benchmark. With a very high quality orderbook, pricing at at the tight end of guidance and with minimal new issue premium, the deal attracted MuniFin’s largest order book to date underscoring the extent of MuniFin’s investor following. Danske Bank is delighted to have supported MuniFin on this important transaction.
Gustav Landström, Global Head of SSA Origination Danske Bank, who acted as a joint lead manager in the transaction

– An outstanding result for MuniFin with their largest ever euro Benchmark. They showed great initiative to be the first Nordic SSA to come to the EUR market and were rewarded with an exceptionally strong quality orderbook amidst a very heavy supply backdrop
Adrien De Naurois, Managing Director, BofA Securities

– This impressive result from MuniFin is due to the agility to take hold of a strong window following the reopening of the market in 2020. The successful strategy of offering investors an attractive maturity and pricing level exceeded expectations. This is highly evident when looking at the record size final orderbook and notable quality of investors that took part. Nabil Menai, Managing Director, Global Head of SSA DCM at Natixis, who acted as a joint lead manager in the transaction

– MuniFin returned to the Euro market with a smashing transaction. Despite the geopolitical unrest, which could have hurt investor sentiment, the issuer assertively took the window. The heavy supply from sovereign issuers did not distract investors from the quality of the MuniFin offering and they got a record orderbook. It allowed a pricing very close to fair value and a distribution of the highest quality.
Olivier Vion, Head of SSA DCM and Syndicate, Société Générale

Details of the transaction

Issue sizeEUR 1.5 billion
Payment date15/01/2020
Maturity date15/11/2024
Coupon0.00%
Re-offer price101.183%
Re-offer yield-0.243%
Re-offer vs mid-swaps-5 bps
Lead managersBank of America, Danske Bank, Natixis, Société Générale

Further information:

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

Antti Kontio, Head of Funding, tel. +358 9 6803 5634

FundingMuniFin

MuniFin plans to issue EUR 8.2 billion long-term funding in 2020

In 2020 MuniFin forecasts to issue approximately EUR 8.2 billion of long-term funding. The amount is slightly larger compared to 2019 – mainly due to the redemption profile. Focus on strategic currencies, in both EUR and USD, will continue. The plan is to issue approximately 2/3 of the funding through strategic trades and the rest 1/3 through tactical funding: other public markets, private placements and structured retail notes. This is also in line with 2019 allocation.

MuniFin is also planning to increase its presence in theme bond markets. Framework for Social bonds with the related Second Party Opinion will be released within few weeks’ time with the aim to issue the inaugural Social bond during H2/2020. In addition, a new benchmark sized Green bond is planned for 2020. Timing for this transaction will depend on the underlying green asset portfolio.

2019 has been successful in terms of new funding: EUR 7.4 billion has been issued by the end of the year. Out of this almost 65% has been issued in strategic public markets. MuniFin has issued two EUR benchmark transactions (5y and Green in 10 years), two USD fixed rate benchmarks (3 and 5y) and has tapped existing EUR benchmarks two times in 2019.

Top 4 currencies in 2019 have been EUR (35%), USD (29%), JPY (17%) and NOK (14%). These currencies account for more than 95% of the new funding issued in 2019.

FundingGreen bondMuniFin

Behind the scenes: a young entrepreneur Eerika shadowed MuniFin’s CEO Esa Kallio for a day

What was on today’s agenda?

“We had several meetings with people trying to sell something to Esa. MuniFin’s team in the negotiations always consisted of Esa and one other person, depending on the topic. We also attended a board meeting of MuniFin’s subsidiary Inspira, which focused on the company’s strategy and next year’s action plan”, Eerika says.

“I have had such an exciting day. MuniFin works with really important issues. I was expecting the place to be boring – and quiet. A lot of the staff are older, but they have young minds. The organisation clearly wants to stay competitive. The finance industry intrigues me because I like numbers. The experience has left me feeling that I want to learn more about this business.”

“It is extremely refreshing to talk to someone young and see your own work through someone else’s eyes”, Esa says.

Eerika wants Esa’s advice on which career path to follow in the future.

“You have a natural curiosity, and you are clearly adventurous. I think you would enjoy a job that involves interacting with people. You have a healthy self-esteem, and you are not afraid to put yourself on the line and always reach for the next step up the ladder”, Esa says.

A thriving café business back home

Eerika runs a live music café called Kukkakievari in Varkaus, which she renovated with her sisters.

Eerika and her 16-year-old sister Eliina run a live music café called Kukkakievari in Varkaus, which also employs their younger sister Meeri.

How did you come up with the idea of opening a café?

“Owning a live music restaurant has been my dream for a long time. I have been taking piano lessons for 11 years, and my sisters and I also perform in the café.”

However, it was Eerika’s neighbours who actually got the ball rolling. They wanted to do something useful with an empty outbuilding that they had on their property and suggested that Eerika and her sisters open a business there.

“I spent almost nine months in North America last year, because I wanted to get better at English. I was in Canada when my mother called me and asked whether I would like to run a café in the neighbours’ outbuilding with my sisters. We get on well with our neighbours, and they knew that we would probably like the idea.”

So how is business?

“Business is great. You can earn up to EUR 10,000 in the JA Company Programme, and we reached that limit after just three weeks. It was at that point that I decided to register as a sole trader.”

Eerika and her sisters advertised their business through the media.

“I tipped off our regional and local newspapers, and four of them sent reporters over to write an article about us. When they realised what it was that we were doing, they were fascinated. Facebook and Instagram have also been important in spreading the word.” 

Heart set on entrepreneurship and management

“Eliina and I are both back at school now and taking a break from the café. We do not want our customers to forget about us, which is why we are thinking about hosting a Christmas event of some kind, maybe a concert. Our plan is to reopen the café again properly in the spring and work first at weekends and then every day except Mondays for the summer holidays”, Eerika says.

Despite the undeniable success of their concept, Eerika and her sisters have their sights set on bigger and better things. They want to either expand the café or turn it into a catering business or a B&B.

“I have a meeting with a local restaurateur next week, whose advice and experience I hope will help me. I used to think that I did not know enough, but participating in the JA Company Programme has made me realise that you can always ask for help”, Eerika says.

Eerika and her sisters found out about the JA Company Programme through their local Enterprise Agency. The programme has taught them a lot about business planning and bureaucracy in particular. It has also given them many new opportunities, such as Eerika’s chance to take part in the Job Shadow campaign.

“I want to work in management, which is why I intend to go to university. I am currently leaning towards studying economics, because it is such a versatile subject. I like working with people. One day, I would like to be a human resources manager.”

MuniFin and JA Finland in a close partnership

“Eerika is an outspoken and enterprising young woman. If just 15% of Finnish teenagers were like her, our future and competitiveness would be guaranteed”, Esa Kallio says.

Encouraging entrepreneurship and preventing social exclusion among young people are crucial for the future success of Finland’s local authorities. This is why promoting education, familiarising young people with economics and politics early on and fostering entrepreneurial attitudes are at the heart of MuniFin’s corporate citizenship policy.

MuniFin is one of JA Finland’s main partners in 2019 and 2020. Schools can incorporate the JA Company Programme into their lesson plans to give their students knowledge and skills in financial literacy, work readiness and entrepreneurship. MuniFin will also have its own Signature Award category in JA Finland’s 2020 national entrepreneurship competition next spring.

In addition to the partnership with JA Finland, MuniFin is involved in Economy and Youth TAT’s entrepreneurship village project. The project is designed to give schoolchildren in the final year of primary school their first taste of the labour market, economics and political decision-making.

Text and photos: Soili Helminen

MuniFinSustainability

A Call for Mayors: Finnish cities are inviting their global counterparts to take climate action

In these videos the mayors Jan Vapaavuori of Helsinki, Pekka Timonen of Lahti and Marita Toikka of Kouvola describe the climate actions their cities are taking to fight climate change. They aim to encourage cities worldwide to take practical steps towards low carbon society – each step is important, and it is crucial that every city starts taking them right now.

The videos coincide with Finland’s Presidency of the Council of the EU in the latter half of 2019 and the UN Climate Action Summit in New York City.

Green bondMuniFinSustainability

Aku Dunderfelt to lead MuniFin’s Customer Finance

Aku Dunderfelt (born 1975) has been appointed as the new Head of Customer Finance and a member of MuniFin Executive Management Team. Mr Dunderfelt has previously worked in different positions in the financial sector, Mr Dunderfelt begins in his new position at MuniFin on 5 August 2019.

– Aku has extensive experience within the banking sector. He will bring with him strong expertise in customer relations, says Esa Kallio, the President and CEO of MuniFin

Further information:

President and CEO Esa Kallio, tel. +358 50 337 7953.

MuniFin

Timo Vesala appointed Chief Economist at MuniFin

Timo Vesala, 44, has been appointed as Chief Economist at Municipality Finance (MuniFin). The role of Chief Economist is new, since MuniFin has not previously had this position. Mr. Vesala held the role of Chief Economist at Savings Banks Group before joining MuniFin.

– Mr. Vesala has a strong background in research, portfolio management and most recently as a chief economist. This unique skill set brings along valuable and wide-ranging expertise. The role of the Chief Economist at MuniFin is different from similar positions in commercial banks as this role has an especially strong societal aspect. MuniFin’s mission is to build a better future together with our customers. With the help of Mr. Vesala’s new role we will be able to deepen our own expertise and support our customers’ every day work in a very concrete way by helping them to interpret the effects of global economic trends to municipal finances in Finland, says Esa Kallio, the President and CEO of MuniFin.

– As the Chief Economist Mr. Vesala will have a strong role throughout MuniFin’s organisation, supporting the decision-making in different business areas. MuniFin’s EUR 6–8 billion funding program makes it crucial to analyse the developments in the global markets, says Joakim Holmström, Head of Capital Markets at MuniFin. 

However, it is just as important to be able to offer insight of future trends in Finland.

– Besides the global markets, MuniFin’s Chief Economist has to understand the impacts of both international economic developments and Finland’s internal trends for the Finnish economy. This is crucial in order to thoroughly understand our customers’ operating environment, Mr. Holmström says.

– I see working as MuniFin’s Chief Economist an opportunity to be part of a company that has a central role in the Finnish society. Due to the wide-ranging nature of the role, I feel I am in a position to make a great impact. As an economist I want to give the company and its customers a reliable view on the big picture and the direction where the economy is headed, Timo Vesala says.

Further information:

President and CEO Esa Kallio, tel. +358 50 337 7853

Executive Vice President, Capital Markets Joakim Holmström, tel. +358 50 444 3638

Chief Economist Timo Vesala, tel. +358 50 5320 702

MuniFin

Changes in Municipality Finance Executive Management Team

Two members of the Executive Management Team of Municipality Finance (MuniFin) are to change. The CFO Marjo Tomminen and Head of Customer Finance Jukka Helminen are leaving their positions and will not continue working for the company. These decisions were made in a mutual understanding and the changes will take effect immediately.

– I would like to thank Marjo and Jukka for the work they have done for MuniFin in the past years. I wish them all the best for the future, says Esa Kallio, the President and CEO of MuniFin.

Harri Luhtala (born 1965, M.Sc. Econ.) has been appointed as the new CFO and a member of MuniFin Executive Management Team. Mr Luhtala has previously worked in different positions at OP Financial Group, where he last acted as CFO. Mr Luhtala begins in his new position at MuniFin on 8 May 2019.

The selection process for a new director to lead MuniFin’s customer finance is currently ongoing. Customer Finance is temporarily lead by Joakim Holmström, the head of MuniFin’s Capital Markets. Mr Holmström will lead Customer Finance until the nomination of a new Head of Customer Finance.

– The finance industry and our customers’ operating environment are changing rapidly. In order to respond to these changes we need to develop the line-up of our Executive Management Team to better serve our customers’ and internal needs, Esa Kallio says.

MuniFin

Finding friends at work – it all started with an evening brunch

“I think we first started chatting at an after work event,” Jenni Heikkilä and Sina Westerberg say, recalling how they met.

Westerberg is a Financial Controller who started work at MuniFin in 2014 alongside her studies, while Heikkilä, who works with the Apollo tool for financing portfolio management and economic planning, had come to the company a couple of years earlier.

The women share not only the workplace, but also a close group of friends who have bonded and become friends at work. It all started with a shared evening brunch a few years ago.

“We were having breakfast in the evening, because everybody wanted waffles,” Heikkilä says.

Every now and then, this group of seven women get together on a weekday morning to enjoy a slightly better breakfast, which is why the group goes by the name Fancy Breakfast Club. The club members all work in different departments and in various positions at MuniFin.

“Breakfasts are our thing, a way to keep in touch with each other even when we don’t have time to meet otherwise. After breakfast, we head to work together. If we don’t have time for a long breakfast, we pop over for a morning coffee somewhere nearby,” says Westerberg.

It all started with breakfast, but the club members have also travelled in various configurations and taken part in each other’s special celebrations.

“One of the members of the group got married recently and, of course, we were invited to the wedding. Now we are waiting for an invitation to the christening,” Westerberg grins.

The workplace supports friendships

Heikkilä and Westerberg feel that the workplace, its atmosphere and encouraging environment have an impact on friendships being born.

“We have a really nice bunch of people here. It’s a lovely work community, and we have a lot of fun together. If I’m in a bad mood when I arrive at work, I find myself cheering up as the day progresses,” Westerberg says.

“The atmosphere here is welcoming, you can be yourself here,” Heikkilä continues.

MuniFin has grown a great deal in recent years, and a lot of new people have joined the company. Its activities and services have also evolved at a fast pace; for example, the Apollo service didn’t exist when Heikkilä came to the house.

As an employer, MuniFin encourages people to get to know their colleagues also outside of working hours and offers an excellent framework for this.

“Our staff club Kursiseura organises various activities related to sports and physical activity, culture and various other activities where the threshold for joining in is low. At these events, it’s easy to get acquainted with colleagues you don’t often have a chance to talk to otherwise.”

Westerberg and Heikkilä explain that there are other groups of friends at MuniFin too who spend time together and go, for example, skiing. What does a joint workplace actually bring to a friendship? According to Heikkilä and Westerberg, the shared workplace is nothing but a bonus.

“You see each other much more than you would otherwise. Sometimes you’re busy and may not see your other friends for months,” Westerberg ponders.

“You don’t lose track of what’s going on in a friend’s life,” Heikkilä continues.

One of the FTC members has recently changed jobs, but remains closely involved in the group. The two women feel that having friends in the workplace is important for job satisfaction.

“It’s difficult to imagine there being such a close group of friends anywhere else. If I was offered a job somewhere else, I’d have to ask them if they have jobs for my friends too,” Heikkilä laughs.

MuniFin

Nasdaq Helsinki is the new listing venue for MuniFin’s bonds

On April 5 MuniFin listed its four outstanding benchmark bonds on Nasdaq Helsinki. The bonds are issued under MuniFin’s EUR 30 billion euro medium term note programme (EMTN.)

The listing of these bonds marks the first step in Munifin’s ambition to list all their new bonds under the program requiring listing on Nasdaq Helsinki. A euro medium term note is a medium-term, flexible debt instrument designed to make it easy for issuers to raise capital and enter foreign markets.

– We are pleased to use Nasdaq Helsinki for all our future bond listings. MuniFin is one of the most active bond issuers in Finland and we have a diversified and growing investor base around the globe. Nasdaq Helsinki is a well-recognised stock exchange and a natural choice for us, said Joakim Holmström, Head of Capital Markets at MuniFin.

– We are dedicated towards building a strong and dynamic Nordic financial market and are keen to partner with MuniFin in it. Last year we launched a dedicated Sustainable Bond market in Finland, and MuniFin was the first issuer to list green bonds on Nasdaq Helsinki. MuniFin is a market leader and we are pleased with their decision to list additional bonds in Helsinki today. We look forward to developing a booming bond market in Finland and hope MuniFin’s decision will inspire other issuers to join the market, said Henrik Husman, President of Nasdaq Helsinki.

– MuniFin’s green bond listing last year attracted a lot of attention and we believe it contributed to a pipeline of prospective new green bond issuers in Finland. There is no doubt in our minds that the Finnish market will see more green bonds being issued in the coming years as the market is amongst the most mature in terms of sustainability and transparency, said Ann-Charlotte Eliasson, Head of Nordic Fixed Income listings at Nasdaq.

FundingMuniFin

Year 2018 in figures: MuniFin’s annual report, responsibility report and green bonds impact report for 2018 are published

MuniFin’s lending has wide impact on society and therefore responsibility has been broadly integrated in the company’s strategy. Responsibility is also one of the company’s core values.  

The responsibility report assesses MuniFin’s key principles of responsibility with the help of goals and indicators related to each one of them. Responsibility at MuniFin is based on four key principles: responsible products and services, forerunner in sustainability, improving wellbeing at work and strong corporate governance.

Green finance continues to grow steadily

MuniFin launched green finance for its customers in 2016. With the help of the instrument, the company wants to make the climate-friendly green projects more common in Finland.

In 2018, 20 new green projects were added in the green portfolio. Since 2016, EUR 1.143 billion has been withdrawn to finance green projects.

The share of green finance of MuniFin’s total lending and leasing portfolio was 5% at the end of 2018. It is the company’s goal that by the end of 2022 green finance accounts for 10% of the financing portfolio.  

More information:

Soili Helminen, Manager, Communications, tel. +358 400 204 853
Eeva Toivonen, ESG Analyst, tel. +358 50 464 3073

MuniFin