Funding strategy focusing on benchmark borrowing
150 – 160
An outcome in the higher part of the interval is expected.
Forecast dated 23 june 2020.
Funding as of 2020-06-30
(Compared to the forecast for 2020, SEK 160 billion)
Currency SEK Billion SEK, 72,2% of issued volume 55,9 USD, 27,8% of issued volume 21,5 Övrigt*, 0% of issued volume 0 Remaining funding need, 82,6 mdkr 82,6
* Potentially callable
Kommuninvest’s overarching objective is to sustainably minimise long-term funding costs for Swedish municipalities and county regions. To be able to offer our customers attractive financing terms, stringent requirements are imposed on how we conduct our funding activities.
To summarize, our ALM strategy means:
- Clear funding strategy with a focus on benchmark borrowing.
- Conservative liquidity reserve consisting of high-quality liquid assets.
- Good match between assets and liabilities.
A new ALM strategy was implemented during 2017 and in brief this means:
- Reduced liquidity reserve, albeit one that is significantly more liquid.
- Increased flexibility in matching between borrowing and lending.
- Continued work in increasing the investor base.
- Clear ambition to increase communication with the market through transparency and predictability in our funding.
In our long-term funding we have a focus on benchmark funding in SEK and USD, including green funding. In 2019, we decided that EUR was to be included as a strategic market. We also borrow Uridashi funding in the Japanese market.
It is a priority to minimise the refinancing risk and this means that we have an ongoing interest in buying back bonds with shorter maturities, especially our Swedish benchmark bonds.
The activity of our short funding programmes is primarily governed by short-term lending, financing of the liquidity reserve, funding maturity and buybacks of bonds.
Factors that govern our funding activities:
- Demand from our members.
- Funding maturity.
- Funding prices in our strategic markets.