Kommuninvest i Sverige AB 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 31.7 bps 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.
Kommuninvest continues to grow as a result of a larger market share and increased welfare investments by Swedish municipalities and county councils. Lending growth, which was 12 percent in 2017 and 9 percent in 2016, is expected to remain strong for the foreseeable future.
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.
Christian Ragnartz, Head of Debt Management
Tel: +46 706 07 38 34, e-mail: firstname.lastname@example.org
Tobias Landström, Deputy Head of Debt Management
Tel: +46 705 86 78 51, e-mail: email@example.com
Marcus Waineby, Senior Portfolio Manager, Debt Management
Tel: +46 70 696 77 69, e-mail: firstname.lastname@example.org
Björn Bergstrand, Head of Media Relations
Tel: +46 708 86 94 76, e-mail: email@example.com