”Local Government Debt Management”, the quarterly report on the structure and conditions of the total debt of the municipal sector, has now been updated with new data.
The report is built 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 first quarter 2023, the data set consists of 8 463 loans, certificates and bonds with a total value of SEK 610 billion as well as 1 582 derivatives linked to underlying loans totaling SEK 192 billion.
New transactions in the first quarter 2023
The average interest rate for new transactions, including derivatives, increased from 2.66 percent in the fourth quarter 2022 to 3.28 percent in the first quarter 2023.
The average maturity of new transactions was extended from 2.44 years for the fourth quarter 2022 to 2.97 years for the first quarter 2023. At the same time, the average period of fixed interest, including derivatives, was shortened from 2.73 years to 2.63 years.
Total debt
The average interest rate for the total debt, including derivatives, increased from 1.58 percent in the fourth quarter 2022 to 1.89 percent in the first quarter 2023. The average interest rate excluding derivatives increased from 1.88 percent to 2.37 percent.
The average maturity increased from 2.54 years for the fourth quarter 2022 to 2.59 years for the fourth quarter 2023. The average period of fixed interest, including derivatives, also increased: from 2.65 years to 2.71 years. By using derivatives, the period of fixed interest was extended from 1.54 years to 2.71 years.
– The rapid rise in interest rates continues for the municipal sector. This is now becoming an increasingly heavy cost to manage. From Q4 2021 to Q1 2023, the average interest rate, including derivatives, for new transactions increased from 0.36 to 3.28 percent. That is a major change which has a clear impact on the municipal economy, says Erik Törnblom, acting Head of Research at Kommuninvest.
Local Government Debt Management Q1 2023
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
