On 16 March, Kommuninvest introduced a new way of issuing bonds in the Swedish market. The aim is competitive pricing through increased transparency. Issuing is now done through an auction. The new methodology has been modified and improved since inception.
From now on, the following will apply:
- Kommuninvest’s weekly funding in the Swedish benchmark programme will only be processed through Bloomberg’s auction platform (AUPD).
- The day before an auction, Kommuninvest will publish the volumes offered for each bond. Depending on the company’s borrowing needs in each maturity, the volumes will vary and can sometimes be zero.
- Wednesday’s auction will start at 09.00 CET. Bids are to be placed as spread vs matched maturity swap expressed in basis points (BP). Bids are to be placed through market makers in the benchmark programme.
- The auction closes at 10.00 CET. The results are normally announced within 15 minutes of the closure. Market makers will be able find the summary of the auction in Bloomberg.
- Kommuninvest reserves the right to reject bids that are deemed to be unnecessarily expensive. There are no absolute rules for rejection. In a volatile and uncertain market, greater deviations from indicative market prices may be accepted.
The following issue calendar, including issue dates and potential bonds, will be applicable for the upcoming weeks:
2020-04-29: K2109, K2302, K2410, K2602
2020-05-06: K2206, K2311, K2505, K2611
2020-05-13: K2109, K2302, K2410, K2602
2020-05-19: K2206, K2311, K2505, K2611
2020-05-27: K2109, K2302, K2410, K2602
2020-06-03: K2206, K2311, K2505, K2611
2020-06-10: K2109, K2302, K2410, K2602
2020-06-17: K2206, K2311, K2505, K2611
2020-06-24: K2109, K2302, K2410, K2602
– Our new funding strategy was introduced in March. Markets have since then normalized somewhat and we now choose to further improve the strategy through an auction rather than tap issuing. We evaluate these changes in close dialogue with market participants, says Christian Ragnartz, Head of Debt Management at Kommuninvest.
For further 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
David Ljung
Head of Communications
tel: +46 73 068 45 45
e-mail: david.ljung@kommuninvest.se
