The quarterly report ”Local Government Debt Management” offers a picture of the structure and conditions of the total debt of the municipal sector in Sweden. This report has now been updated with new data for the fourth quarter 2022.
The report is based on Kommuninvest’s lending and transactions registered by municipalities and regions, as well as their companies, in the debt management tool KI Finans. For the fourth quarter, the data set consists of 8 287 loans, certificates and bonds with a total value of SEK 611 billion as well as 1 589 derivatives linked to underlying loans totaling SEK 193 billion.
New transactions in the fourth quarter 2022
The average interest rate for new transactions, including derivatives, increased from 2.09 percent in the third quarter 2022 to 2.66 percent in the fourth quarter.
The average maturity of new transactions was extended from 2.19 years for the third quarter to 2.44 years for the fourth quarter. The average period of fixed interest, including derivatives, also increased: from 2.32 years to 2.73 years.
Total debt
The average interest rate for the total debt, including derivatives, increased from 1.28 percent in the third quarter 2022 to 1.58 percent in the fourth quarter. The average interest rate excluding derivatives increased from 1.35 percent to 1.88 percent.
The average maturity was shortened from 2.64 years for the third quarter 2022 to 2.54 years for the fourth quarter. The average period of fixed interest, including derivatives, was also shortened: from 2.71 years to 2.65 years. By using derivatives, the period of fixed interest was extended from 1.50 years to 2.65 years.
– From Q4 2021 to Q4 2022, the average interest rate, including derivatives, for new transactions increased from 0.36 to 2.66 percent. That is a major change. The rising market interest rates are having an ever greater impact on the municipal economy. Higher interest costs are becoming an increasingly important factor to deal with in a challenging economic situation, says Erik Törnblom, acting Head of Research at Kommuninvest.
Local Government Debt Management Q4 2022
For further information
Erik Törnblom
Acting Head of Research
Tel: +46 10 470 87 41
E-mail: erik.tornblom@kommuninvest.se
David Ljung
Head of Communications
Tel: +46 73 068 45 45
E-mail: david.ljung@kommuninvest.se
