We finance welfare
Swedish municipalities and regions in cooperation for beneficial financing
Leading lender – focusing on welfare investments
Our mission is divided into three parts: to finance development in the local government sector, to offer a secure alternative for investors and to function as a knowledge hub within local government financial management and long-term sustainability.
We have an important role in Sweden’s development
Sweden’s municipalities and regions need secure access to capital to be able to make investments for the future. These may involve new housing, schools, homes for the elderly or hospitals. In many cases, the financing of these investments – which are necessary to ensure a well-functioning society – comes from Kommuninvest.
A lot of money to be saved
Being a voluntary membership organisation, owned by a large number of municipalities and regions, we together generate better loan terms than each one of us could secure on an individual basis. We are the largest lender to the local government sector in Sweden. Since the outset in 1986, members have together lowered their borrowing costs to the tune of billions of SEK. The money that has thereby been saved has been used in delivering local and regional welfare.
Large investment and borrowing needs
The local government sector’s investment and borrowing needs have increased in recent years and will probably remain at high levels in the future. Kommuninvest plays an important role by ensuring stable and cost-efficient financing. Kommuninvest raises money in the capital markets. This money is then lent – as cheaply as possible – to municipalities and regions that are members of Kommuninvest.
No vested interest in generating profit
By turning to Kommuninvest, our members obtain secure and inexpensive loans as well as efficient tools for debt management. Kommuninvest has no vested interest in generating profit. Instead, we seek to offer members the best long-term conditions possible. This benefits society as a whole.
We offer a secure alternative for investors
Investing in bonds or other securities issued by Kommuninvest is an attractive option for Swedish and international investors seeking investments that generate a highly secure return.
A number of factors contribute in making Swedish municipalities and regions, through Kommuninvest, a highly reliable and credible player in the financial market:
- Highest possible credit rating (Aaa/AAA). Few credit institutions in the world offer as highly rated securities as Kommuninvest.
- Joint and several guarantee. When a municipality or region becomes a member of Kommuninvest, it undertakes at the same time to be jointly and severally liable for Kommuninvest’s payment obligations in the event that Kommuninvest should ever fail to fulfil these.
- Owners that can never be declared bankrupt or cease to exist. By law, Swedish municipalities and regions can never cease to exist other than by merging.
- Owners entitled to levy taxes. Municipalities and regions in Sweden have a constitutional right to charge taxes to finance their operations. The tax system, combined with stringent demands on a balanced economy, provides the local government sector with good income opportunities and secure finances.
- Lowest possible risk-weighting. From the perspective of risk, securities issued by Kommuninvest are treated as equivalent to securities issued by the Swedish state.
- Established and recognised credit institution. Kommuninvest is monitored continuously by Finansinspektionen (the Swedish Financial Supervisory Authority) and is also an approved monetary counterparty to the Riksbank and a member of its RIX payment system.
We function as a knowledge hub in the local government sector
As the only Swedish credit institution with only municipalities and regions, and their companies, as our customers, we have accumulated unique experience in the financing of the local government sector. We are actively engaged in advice, education, research and collaboration on debt management issues.
Over the years, Kommuninvest has evolved into something that is much more than a credit institution. Today, being a knowledge hub in the local government sector, we serve an important interface between the state, municipalities, regions, academia and the financial sector. This manifests itself in Kommuninvest:
- Representing municipalities and regions as the organisation to which they refer on issues of financing and debt management
- Funding and coordinating research on local government sector finance
- Providing advice to members on issues of financing
- Organising courses and webinars/seminars on financial matters for officials and politicians
- Promoting collaboration within the local government sector