Kommuninvest i Sverige AB interim report 2018: High municipal investment pace drive credit demand

Press Releases   •   Aug 30, 2018 06:01 UTC

The Swedish local government debt office, Kommuninvest i Sverige AB, increased its lending volumes by 7 (7) percent during the first six months, according to its interim report. Operating profit was SEK 391.3 (523.7) million and the leverage ratio was 1.70 (1.78) percent. 

1 January – 30 June 2018 in review

The Swedish local government sector’s investment and borrowing needs continue to increase, due to strong population growth, urbanisation and demographic change. Kommuninvest expects sector borrowing to have increased to SEK 618 (600) billion during the period, corresponding to 12.9 (13.0) percent of GDP.

Kommuninvest’s lending increased to SEK 331,404.9 (310,147.3) million. Kommuninvest strengthened its position as the largest lender to Swedish municipalities and county councils/regions, with an estimated market share of 53 (51) percent of the local government sector’s total borrowing. The volume of committed Green Loans grew to SEK 31,352.3 (26,933.7) million, with reference to 179 (149) investment projects and 86 (81) municipalities and county councils/regions.

During the period, equity increased by SEK 298.1 million to SEK 7,908.9 million (7,610.8).

Operating profit amounted to SEK 391.3 million (523.7), with the variance mainly due to changes in unrealized market value changes. Excluding market value changes, operating profit amounted to SEK 305.0 (293.6) million.

The balance sheet total was SEK 430,756.9 (356,942.6) million, mainly due to a larger liquidity reserve and increased lending. Net interest income amounted to SEK 453,7 million (424,4).

Kommuninvest meets all requirements regarding risk-weighted capital. The capital base consists exclusively of core Tier 1 capital, with the effect that both the core Tier 1 capital ratio, the Tier 1 capital ratio and the total capital ratio amounted to 161.3 (212.4) percent.

The leverage ratio, calculated according to the EU Capital Requirement Regulation CRR, was 1.70 (1.78) percent. Kommuninvest believes it will comfortably comply with the leverage ratio requirement to be introduced, for further information see section "Future regulatory requirements - leverage ratio" in the interim report. Following the conversion of subordinated debt to share capital, the alternative key ratio Leverage ratio including debenture loan has been eliminated.

Kommuninvest Cooperative Society had a total of 288 (288) members at the end of the year, of which 277 (277) municipalities and 11 (11) county councils/regions. There were no new members during the period.

Comments by Tomas Werngren, President and CEO

- The continuously increasing investment volumes highlights the significance for municipal borrowers to safeguard a sustainable financial position. However, we estimate that municipal debt will continue to be manageable and limited in relation to GDP. More than 50% of the sector's borrowing is via Kommuninvest and the share is increasing. This is gratifying, given that customer and member benefit is our top priority.

The complete interim report is available for download here

This release contains such information that Kommuninvest is required to disclose pursuant to the Swedish Securities Markets Ac and/or the Swedish Financial Instruments Trading Act. The information was submitted for disclosure on 29 August 2018 at 08:00 a.m.

Comparative earnings figures relate to the same twelve-month period previous year (1 January–30 June 2017). Comparative balance sheet figures relate to 31 December 2017.

Contact persons for enquiries

President & CEO Tomas Werngren, tel. +46 70 645 06 69

CFO Patrick Nimander, tel +46 72 254 94 60

Head of Media Relations Björn Bergstrand, tel. +46 70 886 94 76 or bjorn.bergstrand@kommuninvest.se

Kommuninvest is a municipal cooperation for efficient and sustainable financing of housing, infrastructure, schools, hospitals etc. Together, we get better loan terms than each one individually. Since its inception in 1986, the Kommuninvest collaboration has helped lower the local government sector’s borrowing costs by many billion kronor. Currently, 288 municipalities and county councils/regions are members of this voluntary cooperation, out of a total of 310 Swedish local governments. With total assets of around SEK 400 billion (USD ~44 billion), Kommuninvest is the largest lender to the local government sector and the sixth largest credit institution in Sweden. The head office is located in Örebro.

The Swedish local government debt office, Kommuninvest i Sverige AB, increased its lending volumes by 7 (7) percent during the first six months, according to its interim report. Operating profit was SEK 391.3 (523.7) million and the leverage ratio was 1.70 (1.78) percent.

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Kommuninvest publishes 2018 assurance report on its green bonds framework

News   •   Jul 09, 2018 22:00 UTC

Kommuninvest updates 2018 funding forecast

Press Releases   •   Jul 02, 2018 19:30 UTC

Kommuninvest, the Swedish local government funding agency, has updated its funding forecast for 2018 to SEK 110-125 billion. Previous forecast was SEK 85-100 billion (USD 10-11 billion). The forecast is based on the expected new lending, renewal of maturing loans and renewals of maturing outstanding borrowings, as well as on an assessment of the size of the liquidity reserve at the end of 2018.

S&P affirms Kommuninvest’s AAA credit rating, with a stable outlook

Press Releases   •   Jul 02, 2018 15:17 UTC

S&P Global Ratings (S&P) has affirmed its AAA long-term credit rating of Kommuninvest, with a stable outlook. The short-term credit rating is A-1+.

Kommuninvest launches K2505, a new bond in its Swedish Benchmark Programme

News   •   Jun 19, 2018 09:50 UTC

​Kommuninvest will shortly, and market conditions permitting, issue a new bond under its Swedish Benchmark Programme. The bond, labelled K2505, will mature on 12 May 2025. Kommuninvest targets benchmark status for K2505, equivalent to SEK 3 billion outstanding on the first day of trading. Final terms are to be established shortly.

Kommuninvest issues its largest USD benchmark to date

Press Releases   •   Jun 13, 2018 08:42 UTC

​Kommuninvest , the Swedish local government debt office, has printed its largest USD benchmark transaction to date. On Tuesday, Kommuninvest issued a long 2-year USD 2.5 billion benchmark transaction. The issue was motivated by stronger than expected growth in Kommuninvest’s lending portfolio.

Patrick Nimander appointed new CFO at Kommuninvest

Press Releases   •   Jun 11, 2018 07:08 UTC

​Patrick Nimander, 47, has been appointed new CFO for Kommuninvest in Sweden AB. Patrick joins from EKN (Swedish Export Credits Guarantee Board), where he has been the CFO since 2010. Patrick succeeds Johanna Larsson, who has been appointed Finance Director at Örebro Municipality.

S&P publishes new rating methodology for non-U.S. public sector funding agencies: Kommuninvest’s rating under criteria observation

News   •   May 25, 2018 07:27 UTC

​S&P Global Ratings (S&P) has, on 22 May 2018, announced a new methodology for rating non-U.S. public-sector funding agencies. As a result of the new methodology, S&P has placed ratings of ten public-sector funding agencies, including Kommuninvest i Sverige AB, under criteria observation ("UCO"). S&P expects to review the ratings identified as UCO within six months.

Investors welcome Kommuninvest’s second USD benchmark for the year

Press Releases   •   May 18, 2018 14:22 UTC

Kommuninvest i Sverige AB, rated AAA/Aaa, issued its second USD benchmark transaction for the year on Wednesday. The Swedish local government debt office printed USD 1 billion in 3-year Reg-S/144a notes. The notes, which mature on 1 March 2021, pays a semi-annual coupon of 2.875% and was issued at a spread of plus 20.7bps versus 3-year US Treasuries, equivalent to mid-swaps + 6bps.

Books were closed within 1.5 hours of opening, with final orders in excess of USD 2 billion and participation from more than 50 accounts, primarily central banks & official institutions as well as bank treasuries.

Tobias Landström, Deputy Head of Debt Management at Kommuninvest, commented:

- We are very pleased with the outcome of this transaction, and particularly with the final order book exceeding 50 accounts including a large number of central banks and bank treasuries. We appreciate the strong support for Kommuninvest bonds from core SSA buyers from across the globe

Kommuninvest continues to grow as a result of a larger market share and the increased welfare investments by Swedish municipalities and county councils. Of the SEK 600 bn in municipal sector external loan debt, half is today financed via Kommuninvest. Kommuninvest forecasts a total of SEK 85-100 billion in long-term funding in 2018, up from SEK 76 billion in 2017.

For further information, see separate Press Points.

Kommuninvest is a municipal cooperation for efficient and sustainable financing of housing, infrastructure, schools, hospitals etc. Together, we get better loan terms than each one individually. Since its inception in 1986, the Kommuninvest collaboration has helped lower the local government sector’s borrowing costs by many billion kronor. Currently, 288 municipalities and county councils/regions are members of this voluntary cooperation, out of a total of 310 Swedish local governments. With total assets of around SEK 360 billion (USD ~41 billion), Kommuninvest is the largest lender to the local government sector and the sixth largest credit institution in Sweden. The head office is located in Örebro.

​Kommuninvest i Sverige AB, rated AAA/Aaa, issued its second USD benchmark transaction for the year on Wednesday. The Swedish local government debt office printed USD 1 billion in 3-year Reg-S/144a notes. The notes, which mature on 1 March 2021, pays a semi-annual coupon of 2.875% and was issued at a spread of plus 20.7bps versus 3-year US Treasuries, equivalent to mid-swaps + 6bps.

Read more »

Kommuninvest achieves lower funding cost with green bond

Press Releases   •   Apr 24, 2018 13:30 UTC

Kommuninvest has issued its fourth green bond, and its second in Swedish krona. On Monday, the Swedish local government debt office issued a 3.6 year SEK 3 billion green bond in an oversubscribed transaction that enabled the issuer to price it at 3 b.p. inside its regular Swedish krona benchmark curve. The transaction was the second largest green bond in Swedish krona this year.

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About Kommuninvest

We finance welfare

Kommuninvest is a municipal cooperation for efficient and sustainable financing of housing, infrastructure, schools, hospitals etc. Together, we get better loan terms than each one individually. Since its inception in 1986, the Kommuninvest collaboration has helped lower the local government sector’s borrowing costs by many billion kronor. Currently, 288 municipalities and county councils/regions are members of this voluntary cooperation, out of a total of 310 Swedish local governments. With total assets of around SEK 360 billion (USD ~41 billion), Kommuninvest is the largest lender to the local government sector and the sixth largest credit institution in Sweden. The head office is located in Örebro.

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  • Kommuninvest
  • Drottninggatan 2
  • 70142 Örebro
  • Sverige

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