Barclays has been appointed as a new market maker for Kommuninvest's Swedish Benchmark Programme, effective from 1 January 2019. The market maker group now consists of six banks: Barclays, Danske Bank, Nordea, SEB, Svenska Handelsbanken and Swedbank.
The expansion of the group is motivated by Kommuninvest's long-term strategy to establish municipal bonds as a liquid part of the Swedish bond market, and also by increased interest from foreign buyers for Kommuninvest's Swedish krona bonds. The Swedish issuer has experienced an increased interest from international banks to become a market maker for its Swedish benchmark bonds.
Comment by Tomas Werngren, President and CEO of Kommuninvest:
– With Barclays as a new market maker, we expect to further promote trading and demand for our Swedish bonds. The fact that Barclays, an international major bank with global coverage, wants to strengthen its presence in the Swedish krona market is positive for the programme and should be of benefit to investors.
Comment by Lee Cumbes, Managing Director, Head of Public Sector Origination, Barclays:
– Barclays is honoured to join as a dealer on Kommuninvest’s Swedish Benchmark Bond programme and employ our highly international platform to offer a further, high quality SEK denominated asset to our investor clients. Kommuninvest’s characteristics as a triple-A credit, backed by the Swedish local government sector, matches Barclays’ strengths well as a leader in the European rates arena.
Kommuninvest continuously works to increase the attractiveness and diversification of its funding programmes. During the year, Kommuninvest's bonds have been approved for inclusion in Nasdaq bond indices and have also been deemed eligible as collateral with LCH Ltd, the clearings services operator.
Municipal bonds have gradually become an established part of the Swedish bond market. Almost 10 percent of the outstanding volume of benchmark bonds in Swedish krona consists of Kommuninvest's Swedish Benchmark Programme, when outstanding Swedish government bonds have been adjusted for the Riksbank's holdings.
The Swedish Benchmark Programme is Kommuninvest's main funding source. As of 31 October, SEK 183.4 billion was outstanding in nine bonds with maturities from 2019 to 2025, making the programme the sixth largest in Swedish krona.
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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 exceeding SEK 400 billion (USD ~45 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.