MuniFin returned to Green bond market with a record 55% allocation to Green investors
08 October 2020On Tuesday 6 October 2020 MuniFin issued a new 10-year EUR 500 million Green bond. This is the fourth public benchmark Green bond issued by MuniFin bringing the combined amount of Green bond issuance to approximately EUR 2.0 billion. Investor interest was exceptionally strong: the orderbook grew to EUR 3.4 billion, which is the largest Green bond order book to date for MuniFin.
Mandate of the transaction was released on Monday afternoon 5 October and books were opened on Tuesday morning 6 October at 10:00 am Helsinki time. The first update of the transaction was sent at 11:30am, when the orderbook had grown to a record EUR 2.9 billion and at the same time the spread was set at mid-swaps +2 basis points, 3 basis points tighter from starting level. The final orderbook grew to EUR 3.4 billion, which is one of the largest benchmark orderbooks MuniFin has seen and the largest for MuniFin’s Green bonds. Coupon of the new Green bond is 0%, yield -0.197% and joint lead managers were Danske Bank, NatWest Markets, Nomura and Nordea.
104 investors participated in the transaction and the majority was sold to European institutional investors. Germany, Austria and Switzerland was the largest geographical area with 33% of allocations followed by Nordics 21%, Benelux 10%, Southern Europe 10%, France 9%, Americas 8% and other 10%. Central banks and official institutions bought 33% of the transaction, asset managers 30%, bank treasuries 28% and insurance/pension funds 9%.The amount of ESG focused investors grew to 55%, which is the highest allocation to this investor group seen in MuniFin’s Green bonds.
MuniFin’s Green bonds Framework divides Green finance into seven categories, sustainable buildings and public transportation being the most important ones.
“We are extremely pleased with the outcome. Almost 7 times oversubscribed orderbook and a meaningful greenium of around 2 basis points shows that going green really pays off. 2020 has been a very exceptional year – but we are very happy that we’ve been able to continue our presence in the Green bond market together with our inaugural Social bond just a few weeks ago”, says Antti Kontio, Head of Funding at MuniFin.
| Issuer: | Municipality Finance Plc (MuniFin) |
| Rating: | Aa1 / AA+ (Moody’s/S&P – both stable) |
| Issue size: | EUR 500mn (no-grow) |
| Payment date: | 14th October 2020 (T+6) |
| Maturity date: | 14th October 2030 |
| Coupon: | 0.0% |
| Re-offer price: | 101.992% |
| Re-offer yield: | -0.1970% |
| Re-offer vs. mid swaps: | +2bps |
| Re-offer vs. benchmark: | DBR 0% 08/2030 + 30.7bps |
| Lead managers: | Danske Bank, NatWest Markets, Nomura, Nordea |
Antti KontioHead of Funding, MuniFin
Tel. +358 500 3700285