MuniFin receives excellent feedback from international distributors

The survey covered the Nordic municipal agencies, namely MuniFin and its counterparties Kommuninvest of Sweden, KBN of Norway and KommuneKredit of Denmark. The Nordic agencies were also compared to other European issuers such as the German KfW, the Dutch BNG Bank, European Investment Bank and Nordic Investment Bank.

– The distributors clearly feel these issuers have credit stories that are relatively similar and all these issuers receive great feedback. However, there are also differences in profiles, says Hanna Helgesson of Prospera.

Strong Finnish economy increase investor interest in MuniFin

The respondents of the survey felt that the insecurities related to other parts of Europe have increased investor interest in MuniFin. Investors have also noticed that the Finnish economy has been picking up pace in the past couple of years.  

MuniFin as a company is recognised by the distributors for its activity in the green bonds market. Some of the respondents also mentioned that social bonds would further increase their interest in the MuniFin securities. Also issuing more benchmark loans was on the distributor wish list.

– MuniFin has a diverse funding strategy which caters for a wide range of investors. They have been able to stay at the forefront of each market, constantly adapting to investor needs. Participation at various events helps them to stay close to their investors and maintain this flexibility in the funding. This is welcomed by the investors, commented one of the respondents.

Survey helps to improve MuniFin’s funding operations

The Prospera survey defines MuniFin as a company with a very professional operation model. MuniFin’s strengths are its funding strategy, clear and consistent way of acting, transparency, information and its perceptiveness to market demands. All these have had a central role in the development of the company’s funding operations in the past years.

– Each year we go through the feedback from the Prospera survey in great detail. Awards we have been given in the recent years are a good indicator we’re on the right path, but the Prospera survey offers us more concrete ideas on how to improve our way of working. It also gives our partners a chance to give constructive feedback, says Joakim Holmström, Executive Vice President and the Head of Capital Markets at MuniFin.

Facts about the survey

Prospera has surveyed North European issuers every year since 2011. The Swedish Kommuninvest was the first company to mandate the survey but MuniFin has for several years been the other assigner of the survey.

Prospera is part of a global research group Kantar Sifo and it specialises in the finance sector research. Its services range from tailored surveys like the one in question but also sector wide market research conducted at its own initiative.

This survey was conducted by 22 phone interviews with international distributors. The respondents were pre-determined as it is essential that the respondents are familiar with the agencies they were asked to review and rate.

MuniFin awarded for its transactions in the Japanese Uridashi market

MuniFin won one of the most respected categories of the awards as it was selected the Issuer of the Year. Additionally, MuniFin receives the Deal of the Year Award in the category of equity index-linked deals.

– MuniFin has had a long-term presence in the Uridashi market. We have always adapted to new trends and been a flexible issuer thereby sustaining stable issuance volumes. The Uridashi market is a strategic part of MuniFin’s funding. MuniFin issues 20–30% of its annual funding in the Uridashi market, says Karoliina Kajova, Manager at MuniFin’s funding.

The mtn-i Uridashi Awards Ceremony will be held in Tokyo on October 23, 2018.

Read more about the mtn-i Uridashi Awards > 

Noppa the therapy dog works for belly rubs

Noppa comes to the door to greet each new arrival with equal enthusiasm and sometimes even a sloppy kiss. Noppa’s owner, MuniFin’s administrative assistant Laura Kari, watches Noppa’s antics with a smile on her face. One-year-old Noppa has love and time for everyone.

“Noppa is a Stabyhoun, which is a bird dog breed originating in the Netherlands. Stabyhouns are social dogs that have mostly lost their hunting instinct. Noppa likes people, which makes him an ideal office and therapy dog”, Laura Kari explains.

Working from a young age

The door to Sirpala opens and closes several times during our interview, as people come to say hello to Noppa and give him a quick cuddle. Several people also greet the office’s furriest employee through the glass as they pass the room. Noppa is clearly well known in the office. His fame is undoubtedly due to his affectionate nature but also the fact that he has been coming into the office from a young age.

“Noppa was actually only eight weeks old when he first visited the office. I was working from home that day, but I had to pop into the office and I took Noppa with me. At the moment, Noppa does a full day in the office once every couple of weeks. As the office is a bit quieter during the summer months, Noppa’s visits are actually more frequent right now”, Kari says.

Noppa’s typical day at work

Noppa has a fairly well-established routine for the days when he is in the office.

“Noppa’s typical day begins when we arrive at the office together around eight in the morning. Mornings and mid-mornings are Noppa’s busiest time when he is at his most energetic. Lots of people come to say hello to Noppa and to play with him. Around eleven, we go out for a little walk and to grab some lunch for me. Noppa tends to get a bit tired in the afternoons, and at some point he usually finds himself a peaceful spot for a nap, often either under my desk or my colleague Eeva’s desk.”

Despite the tiring nature of his work, Noppa loves being an office dog.

“Noppa clearly likes being here and meeting people. So far, he seems satisfied with being paid for his services in belly rubs, play and treats”, Kari says.

Noppa relieves stress and brings people closer together

Office dogs and therapy dogs are becoming more and more popular around the world. According to Kari, Noppa has had a particularly big impact on the atmosphere in the office and relationships between people.

“Noppa has allowed me to meet many colleagues whom I would otherwise not know very well. The presence of a dog brings out a very different side of people compared to normal office work. Many of my colleagues are in the habit of having a quick cuddle with Noppa after a stressful meeting, and they say that even a short moment with him lifts their spirits and puts them in a good mood.”

Sirpa Kestilä, who has come to give Noppa a belly rub, agrees.

“We work in a big office with around 150 employees in total. Many of our employees who do not need the assistants’ services as such have come to see Noppa here in Sirpala after hearing about him from their colleagues”, Kestilä says.

An office dog gives people licence to relax and even be a little silly just by being present.

“People often think that working as we do for a financial institution, we need to be serious and formal. But when Noppa is here, even the people in suits get on their hands and knees on the floor to play with him”, Kari says.

“We have a lot of dog lovers among our staff, and for people like me, who used to have dog, Noppa kind of feels like my dog, too”, Kestilä says, ruffling Noppa’s head.

Text: Joonas Holste
Photo: Jari Kinnunen

Strong demand for MuniFin’s new 3-year USD benchmark

The transaction was announced on Tuesday 26th June 2018 with initial price thoughts (“IPTs”) of mid-swaps+5bps area, representing an approximate 2bp new issue premium to fair value. The investor response throughout the European afternoon was strong, with indications of interest exceeding $1.3bn. Books were officially opened in the morning of 27th of June with price guidance revised to mid-swaps+4bps area. The spread was set at mid-swaps +3bps; representing the tightest spread to mid-swaps for MuniFin in this maturity since 2014. The final orderbook was in excess of $1.65bn.

“We are extremely happy with the transaction. The timing was successful and strong book building process enabled us to achieve a desirable funding level. We’ve been constantly building our USD investor base since 2011 and it’s nice to see that the Finnish local government sector still acts as safe haven during volatile market conditions”, says Antti Kontio, Head of Funding and Corporate Responsibility at MuniFin.

There was notable demand from Central Banks and Official Institutions (52%), as well as Bank Treasuries (42%). The participation from Americas-based investors the largest-ever in MuniFin’s USD benchmark, accounting for 66% of the final allocation followed by Europe, Middle East and Africa with 23% share. Asia Pacific accounted for 11% of the transaction.

MuniFin has funding requirements of EUR 7.0 billion for 2018 and after this transaction approximately EUR 4.8 billion has been completed.

Details of the transaction:

Issuer:   Municipality Finance Plc (“MuniFin”)
Rating:   Aa1/AA+ (both stable)
Issue Size:   USD 1.0 billion
Settlement Date:  5th July 2018
Maturity Date:   8th June 2021
Coupon:  2 .75% payable semi-annually
Re-offer Price:  99.700%
Re-offer Yield:  2.858%
Re-offer Vs Benchmark:  T 2.625% 06/15/21+25.8bps
Re-offer Vs Mid-swaps:  +3bps
Lead Managers:   BofA Merrill Lynch, BNP Paribas, RBC Capital Markets, TD Securities


More information:

Joakim Holmström, Head of Capital Markets, +358 9 6803 5674
Antti Kontio, Head of Funding and Corporate Responsibility, +358 9 6803 5634

Finland has the potential to become a forerunner in sustainable financing

– Sustainable financing and sustainable investing are global trends that grow strong in a fast pace. They can have significant effect in steering new investments environmentally sustainable. The multiplicative effects of finance decisions can be enormous, says MuniFin’s President and CEO Esa Kallio, who rang the bell at the new market segment launch at Nasdaq Helsinki.

MuniFin has been the first Finnish green bond issuer. There still are only two green bond issuers in Finland but the launch of the new marketplace is an indication that the situation is going to change.

– It is crucial for us that Finland will become a hotbed of sustainable financing. First of all, that would encourage different actors to make innovative environmental investments and make it possible to reach the Finnish climate goals. On the other hand it would also strengthen Finland’s brand as a leader in sustainable investments, Kallio says.

MuniFin aims to further improve the portfolio of sustainable products. In addition to green bonds, the company also investigates the different options for issuing social impact bonds.

Green finance has proved to be a success

MuniFin’s publicly issued green bonds have had extremely strong investor demand and they have been quickly oversubscribed – the EUR 500 million bond issued in the autumn of 2017 has been the most sought-after bond in the history of MuniFin. It was therefore very tightly priced, and has also performed well in the secondary market.

MuniFin has offered green lending for its customers’ environmental projects since 2016 and the customer demand has been excellent: so far the combined value of the green portfolio is more than EUR 1.0 billion.

The municipality sector plays a key role in the fight against climate change: its projects are often large-scale and have a wide social impact. MuniFin offers municipalities incentives towards sustainable choices by offering green finance at a lower cost than other financing instruments. Green finance can be either loan or leasing finance. 

MuniFin’s framework for green finance 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 nature conservation.

Present at the launch of of the Sustainable Bonds Market were MuniFin green finance customers representing the West Metro, the Tampere tramway, a social housing company Lahden Asunnot and the cities of Hämeenlinna and Mikkeli.

Further information:

Esa Kallio, President and CEO, tel. +358 50 337 7953
Antti Kontio, Head of Funding and CSR, tel. +358 50 3700 285
Soili Helminen, Communications Manager, tel. +358 400 204 853

Esa Kallio, the new President and CEO of Municipality Finance, swears by collaboration

Esa Kallio has an impressive track record in finance. He has worked for MuniFin since 2005, most recently heading the company’s funding and treasury functions. Since August 2017, he has also acted as an interim President and CEO.

– I am really looking forward to closer cooperation that will enable us to further improve our dialogue with customers. According to MuniFin’s revised vision, our aim is to be the preferred partner of our customers throughout the financing life cycle. We want to be a visionary sparring partner that welcomes challenges and is also able to challenge its customers. Our personnel has in-depth expertise in our customer sectors and this is something I want our customers to take full benefit of, Esa Kallio says.

– Reforms unequalled in scope are currently taking place in our customers’ operating environment. We will assist them in evaluating the practical effects of the future changes and identifying new solutions. At present, we are focusing on customer-oriented development and the digitalisation of our services. This requires close partnerships with our customers, Kallio says.

Changes in MuniFin’s Executive Management Team

Following Esa Kallio’s appointment as the President and CEO of MuniFin, Mari Tyster has been appointed as the deputy to the CEO. Tyster is the company’s Executive Vice President, Legal and Governance and member of the Executive Management Team. Simultaneously, Joakim Holmström and Rainer Holm have been appointed as new members to the Executive Management Team. Furthermore, Holmström, who has headed MuniFin’s funding operations, will assume the responsibility of leading the company’s capital markets operations.

Toni Heikkilä, Jukka Helminen and Marjo Tomminen will continue as members of the Executive Management Team.

MuniFin’s new Responsibility Policy has been published

The Responsibility Policy is a part of MuniFin’s long-term strategy in responsibility. Skillful and responsible personnel that profoundly understand the impacts of MuniFin’s operations and are committed to promoting long-term goals are at the core of the new policy. The policy also serves as a key external policy for stakeholders such as owners, customers, investors, authorities, the media and other stakeholders.

– We are committed to understanding, monitoring and managing the social and environmental impacts of our own operations and the products and services that we offer in order to contribute to the wider goals for sustainable development in the Finnish society. This engagement is integrated in our strategy and values, says Esa Kallio, CEO (interim) at MuniFin.

The Responsibility Policy can be found here >.

More information

Esa Kallio, CEO (interim)
tel. +358 50 337 7953

MuniFin helps Finnish municipalities in digitalisation

Municipality Finance Plc, or MuniFin, provides municipalities in Finland with digital services that can speed up and automate the processes of public financing. Now, the financing management tool provided by MuniFin will be extended to support investment activities.

Municipal assets are seldom limited to listed securities, but often include physical assets such as land and real estate. With the expansion of the platform, municipalities can manage a wide range of assets in one system.

– It is important to follow the returns on investments to be able to plan the future investments. Additionally, many municipalities have outsourced their investments to asset managers, whose performance and cost levels may not be comparable, says Hannes Helenius, Chairman of the Board of FA Solutions.

MuniFin develops its services on a customer-oriented basis.

– This is a highly desirable addition to MuniFin’s services. Monitoring and reporting the overall picture of our financial position is easier when the liabilities and assets are manageable in one system. In addition, we can make the city’s financial management more transparent, which is particularly important for a public organisation, adds Kari Pentti, Financial Manager at City of Turku.

The expansion is implemented in cooperation with FA Solutions, a Nordic financial technology firm.

– We want to provide services in an ecosystem with our partners. Operations are efficient when each member of the network focuses on their core competencies, comments Jukka Leppänen, Manager, lending in MuniFin.

In Sweden, Kommuninvest has been providing similar services to Swedish municipalities and provinces since 2016.

Further information:

Jukka Leppänen, Municipality Finance Plc
Manager, lending
jukka.leppanen@munifin.fi
+358 50 5910 934

Hannes Helenius, FA Solutions
Partner, Chairman of the Board
hannes.helenius@fasolutions.com
+358 20 7118 514