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MuniFin’s Social bond tap oversubscribed by ESG investors

A nurse holding a baby in a hospital

The mandate for the EUR 500 million Social bond tap was announced 12:00 CET on Monday 4 October 2021 and the books opened the following morning with a spread guidance of mid-swaps +1 area. Exceptionally strong investor demand allowed MuniFin to tighten the spread guidance quickly to MS-1 bps area. Despite the tightening of 2 bps the orderbook grew to EUR 1.8 billion. The final spead was set to MS-2. The original bond offers a 0,050% coupon. The transaction was jointly led by DZ BANK, NatWest Markets N.V., SEB and Société Générale.

The bonds were distributed to a high degree of quality investors across Europe, with 75% placed with dedicated ESG accounts. A total of 43 investors, all European, finally participated in the transaction. Asset managers took the bulk with 43% allocation, followed by a 31% allocation to central banks and 24% to bank treasuries.

The record-high demand among ESG investors fortifies MuniFin’s excellent reputation as a sustainable bond issuer.

“We are extremely pleased with the outcome. The exceptionally high interest among ESG investors and a meaningful greenium, or should we say socium, of around 2 basis points shows that sustainability really pays off”, says Antti Kontio, Head of Funding and Sustainability at MuniFin.

MuniFin’s social finance promotes investments that produce widespread social benefits and serve the needs of their users in an exemplary way. MuniFin’s social finance projects promote equality, communality, safety, welfare, or regional vitality.

A cover picture for social bonds with the text " Investments that make a difference".

Learn more about our social finance >

IssuerMunicipality Finance Plc (“MuniFin”)
RatingAa1 / AA+ (Moody’s/S&P – both stable)
Issue SizeEUR 500mn (no-grow)
New Outstanding AmountEUR 1.1bn
Payment Date12 October 2021
Maturity Date10 September 2035
Re-offer Price96.119%
Re-offer Yield0.336%
Re-offer vs Mid-Swaps-2 bps
Re-offer vs BenchmarkDBR 05/2035 +35.9 bps
Lead ManagersDZ BANK, NatWest Markets N.V., SEB, Société Générale

Comments from the bookrunners

“DZ BANK as an institution that firmly roots in the cooperative and sustainable financial sector is proud to have been chosen to support MuniFin in this highly successful bond issue as a bookrunner.

While we expected strong participation from Germany already ahead of the transaction, it is even greater so see how well known MuniFin is by the German investor base and how much it likes the MuniFin credit. MuniFin also met the sweet spot of demand with their 15 year tenor.

The social format of the bond and Munifin´s social commitment in the eligible categories social housing, welfare and education was another driver for the strong outcome and tight pricing of the transaction.”

Kai Poerschke, Head of SSA Origination at DZ BANK

“A great outcome for the Munifin team who remain at the forefront of ESG in the primary markets. By offering investors an opportunity to be involved in a more liquid issuance they have once again been rewarded with strong demand from a loyal investor base. Books over 3 times subscribed with a sizeable ‘greenium’ clearly show this. 75% take up from ESG accounts is another impressive statistic and represents the largest ESG allocation MuniFin have seen.”

Kerr Finlayson, Head of FBG Syndicate at NatWest Markets

“We congratulate MuniFin on the fantastic outcome of their second venture into the Social market. The transaction was met with the solid investor support that the MuniFin name always delivers, with a multiple times oversubscribed book, and pricing 1 bp inside fair value. The successful outcome today highlights investors’ commitment to MuniFin and the important work they do to improve social well-being in Finland.”

Rebekah Logan Bray, Senior Originator, SSA Origination at SEB

“MuniFin’s best in class social bond framework and investor reporting have once again been endorsed with this remarkable success. By adding liquidity to its 2035 issue, MuniFin has achieved a pricing through secondary with a transaction over 3 times oversubscribed.”

Olivier Vion, Head of SSA Primary Markets at Société Générale

Further information

Antti Kontio, Head of Funding and Sustainability, MuniFin
Tel. +358 500 3700285

Joakim Holmström, Executive Vice President, Capital Markets and Sustainability, MuniFin
Tel. +358 50 4443 638