Only two weeks after MuniFin’s highly successful opening transaction of the year, MuniFin priced a new USD 1.5 billion benchmark on 24 January. Investor demand was phenomenal from the beginning and resulted in an all-time record orderbook of USD 4.4 billion. The bond is also the largest USD issuance since 2021.
The record-breaking bond carries a coupon of 4.250%, and was priced at SOFR mid-swaps+47bps, equivalent to a spread of +22.6bps over the UST 3.75% due 31 December 2028. From the initial price thoughts of +50bps, MuniFin was able to tighten the final pricing by 3bps due to the outstanding demand from high-quality investors.
The final orderbook was of very high-quality and geographically diverse with 83 investors participating. In terms of investor type, the majority of allocations went to banks (49.1%), followed by central banks and other official Institutions (39.5%) and Fund Managers (11.4%).
Considering the busy primary market, the result was quite impressive and received praising comments from the joint lead managers on the transaction.
“Congratulations to the MuniFin team on their first USD benchmark outing of 2024. The new USD 1.5 billion, 5-year benchmark garnered a high-quality orderbook amidst a busy primary market for SSA issuers. MuniFin’s agility in adapting to market windows once again enabled them to achieve attractive cost of funding for their activities which support the mission of building a better and more sustainable future for its clients. Deutsche Bank is proud to have been involved in this transaction”, said Katrin Wehle, Managing Director and Head of SSA CDM Origination at Deutche Bank.
MuniFin’s funding programme is progressing at a very good pace, as after this transaction, the company has printed nearly 25% of its EUR 9–10 billion programme for 2024.
“It has been a busy start for us at MuniFin, as we decided to kick off our funding year with two benchmarks and printed already a quarter of our funding programme within less than one month. We are extremely excited to break a new record with an overwhelming demand of USD 4.4 billion for this USD benchmark. We are humble for the exceptional reception and want to extend our thanks to all our investors and joint lead managers who participated in making this happen”, says Senior Manager Karoliina Kajova from MuniFin’s funding and sustainability team.
Transaction details
| Issuer | Municipality Finance Plc (“MuniFin”) |
| Issue Amount | USD 1.5 billion |
| Issuer Rating | Aa1 /AA+ (Moody’s / S&P) (all stable) |
| Pricing Date | 24 January 2024 |
| Settlement Date | 31 January 2024 (T+5) |
| Maturity Date | 31 January 2029 |
| Re-offer Price /Yield | 99.942% / 4.263% |
| Annual Coupon | 4.250% |
| Re-offer Spread | Mid-swaps +47bps |
| Spread vs Benchmark | UST 3.750% due 31st December 2028 +22.6bps |
| Listing | Helsinki Stock Exchange (Regulated market) |
| Documentation | Issuer’s Debt Issuance Programme dated 7 September 2023 |
| ISIN | XS2757519280 / US62630CEK36 |
| Joint Lead Managers | Barclays, BMO, Citigroup, Deutsche Bank |
Comments from joint lead managers
“Congratulations to the MuniFin team for another fantastic outing in the USD benchmark space. We are delighted to see the team achieve a record orderbook well in excess of USD 4bn and with granular interest from over 80 investors. The USD 1.5bn 5Y deal priced with minimal concession to the secondary curve, testament to the strong name recognition that MuniFin enjoys with investors around the world.“
Massimo Antonelli, Managing Director BMO Capital Markets
“Congratulations to the MuniFin team for a phenomenally successful USD outing, with this latest benchmark extending the issuer’s USD curve. The largest ever USD orderbook for MuniFin at USD 4.4 billion, as well as its joint-largest USD print over the past decade at USD 1.5 billion, is a testament to the firm standing of MuniFin amongst the global investor community. Moreover, size did not come at the expense of price, with the trade seeing a 3bps move tighter in spread during execution and crucially with no attrition in the size of demand. Barclays is honoured to have supported this transaction.”
Francesco Polon, Director, SSA Debt Capital Markets, Barclays
“An resounding return to the US dollar market for MuniFin. With a constructive and supportive primary market and stable macro backdrop, MuniFin priced their largest transaction in dollars since 2021 and achieved its largest ever orderbook with the transaction 2.9x oversubscribed. Citi is delighted to have been involved in this record-breaking trade. Congratulations!”
Ebba Wexler, Managing Director, Head of SSA DCM, Citi
Further information
Joakim Holmström, Executive Vice President, Capital Markets and Sustainability
Tel. +358 50 4443 638
Antti Kontio, Head of Funding and Sustainability
Tel. +358 50 3700 285
Karoliina Kajova, Senior Manager, Funding
Tel. +358 50 5767 707
Lari Toppinen, Senior Analyst, Funding
Tel. +358 50 4079 300
Aaro Koski, Analyst, Funding
Tel. +358 45 138 7465
Read more
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