Press release -
Kommuninvest issues its largest USD benchmark to date
Kommuninvest i Sverige AB, the Swedish local government debt office, printed its largest USD benchmark transaction to date, when it issued a long 2-year USD 2.5 billion benchmark transaction in Reg-S/144a format on Tuesday. The notes, maturing 22 October 2020, pays a semi-annual coupon of 2.75% and were issued at a spread of plus 31.7bps versus UST 2.500 % due 31 May 2020, equivalent to mid-swaps + 2bps.
The issue was motivated by stronger than expected growth in Kommuninvest’s lending portfolio, which has grown as a result of a recently introduced, more competitive pricing model and continued strong growth in local government investments. The issue has also increased the size and duration of Kommuninvest’s liquidity reserve.
Christian Ragnartz, Head of Debt Management at Kommuninvest, commented:
- We are very pleased with the transaction, and with the strong support for Kommuninvest bonds from a diverse investor base across the globe. Going into the summer months, and in a positive market environment following recent turmoil, we wanted to secure a substantial part of this year’s funding need and also boost our liquidity reserve.
Of the SEK 600 billion in municipal sector debt, half is today financed via Kommuninvest. Kommuninvest’s current long-term funding forecast for 2018 is SEK 85-100 billion. An updated forecast will be published in the near future.
For further information, see separate Press Points.
Contact information
Christian Ragnartz, Head of Debt Management, tel: +46 706 07 38 34, e-mail: christian.ragnartz@kommuninvest.se
Tobias Landström, Deputy Head of Debt Management, tel: +46 705 86 78 51, e-mail: tobias.landstrom@kommuninvest.se
Marcus Waineby, Senior Portfolio Manager, Debt Management, tel: +46 70 696 77 69, e-mail: marcus.waineby@kommuninvest.se
Björn Bergstrand, Head of Media Relations, +46 708 86 94 76, e-mail: bjorn.bergstrand@kommuninvest.se
Topics
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.
