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​Kommuninvest announces decision on strategic funding markets

Press release   •   Oct 10, 2019 07:30 UTC

Kommuninvest has recently decided that the EUR, SEK and USD benchmark bond markets constitute strategic funding markets, both for traditional funding activities and so-called sustainable funding, for example Green Bonds. The decision means that EUR is added as a strategic funding currency. A strategic funding market is defined as one where Kommuninvest intends to be a frequent issuer and have a long-term presence.

Funding in so-called Uridashi format in the Japanese market continues to be prioritized due to its favorable conditions.

Kommuninvest does not provide a forecast regarding expected funding frequency and volume in strategic funding markets; this will be dependent on market conditions. The reference is Kommuninvest's base currency SEK, with a priority for markets considered to provide the best conditions for long-term favourable loan terms for Kommuninvest's members. The assessment incorporates the functioning of individual markets, including prevailing price dynamics and the supply/demand situation, where Kommuninvest strives for flexibility.

- Given our expectations of Kommuninvest's continued growth and the need for flexibility, we want to establish another strategic funding market well in advance. The size and liquidity of the EUR market make it a natural choice. In combination with the USD, it gives Kommuninvest access to the world's two largest and most liquid bond markets, says Christian Ragnartz, Head of Debt Management at Kommuninvest.

Kommuninvest, which is the largest lender to Swedish municipalities and regions, has grown rapidly in recent years, due to a stronger market position, additional members and increased municipal investment needs. The latest interim report showed that Kommuninvest's lending during the first six months of the year grew by 9 percent to SEK 384.6 billion. This was an increase of SEK 115.7 billion compared to three years earlier.

Kommuninvest forecast for long-term borrowing in 2019, ie. borrowing with a maturity of more than one year, is SEK 120-140 billion.

For further information

Christian Ragnartz, Head of Debt Management, tel: +46 706 073 834, e-mail: christian.ragnartz@kommuninvest.se

Tobias Landström, Deputy Head of Debt Management, tel: +46 70 586 78 51, e-mail: tobias.landstrom@kommuninvest.se

Björn Bergstrand, Head of Media Relations, +46 708 869 476, e-mail: 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, 289 municipalities and counties/regions are members of this voluntary cooperation. With total assets exceeding SEK 450 billion (USD ~47 billion), Kommuninvest is the largest lender to the local government sector and one of the ten largest credit institutions in Sweden. The head office is located in Örebro.

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